The telco party line as expressed by Mike McCurry is:

McCurry argued that letting regulators “engineer the future of the Internet would “dampen investor interest in building bigger, faster, smarter pipes.” Instead, Congress and the Federal Communications Commission should sit on the sidelines and see what competition could do.

— Study: Net neutrality law would spur infrastructure improvements, By Eric Bangeman, Ars Technica, March 11, 2007 – 05:39PM CT

I’d say we’ve already seen what competition with the few big telcos does: it results in lawsuits and competitors shut down. But what if there were net neutrality?

Researchers at the University of Florida find differently.

Researchers at the school used game theory to come up with an analytical model for a world without net neutrality. The study argued that the killing net neutrality would result in fewer infrastructure investments and service upgrades rather than more. Even worse, ISPs that require content providers to pay for preferential access on their networks run the risk of losing customers whose favorite sites aren’t on the preferred list.

“The whole purpose of charging for preferential treatment to content providers is that one content provider gains some edge over the other,” said researcher Subhajyoti Bandyopadhyay, a professor in the University of Florida’s decision and information sciences department. “But when the capacity is expanded, this advantage becomes negligible.”

Broadband ISPs would be more likely to expand their infrastructure if they didn’t charge popular sites for preferential treatment, according to the researchers. Bandyopadhyay further explained the findings using a highway analogy. “If the road is upgraded from two to four lanes, with one express lane, these drivers might say ‘Three lanes are good enough for me. I don’t want to have to pay a toll any longer,'” he said. “So the desire to pay a toll when the road is expanded gets lesser.”

In other words, net neutrality promotes abundance of bandwidth, and the telcos’ position promotes artificial scarcity so they can charge more.

And the telcos’ position also makes them less competitive vs. telcos in countries that do have net neutrality and local competition, such as Japan and Korea. Plus with net neutrality U.S. telcos would stand to make more money themselves. Maybe eventually they’ll decide to serve their own best interest and ours. But that’s not much to depend on. Enforced net neutrality or more competition or both would be better.

-jsq