"Net neutrality" is stupid

"Net neutrality" is stupid

Summary: Today's net neutrality tempest - Google: are they or aren't they? - is a marketing mistake with grave public policy implications.

TOPICS: Mobility, Networking

Today's net neutrality tempest - Google: are they or aren't they? - is a marketing mistake with grave public policy implications. The mistake was law professor Tim Wu's: creating a new label when a perfectly good one is already there.

"Net neutrality" is another term for "common carrier," first used for US telecommunications over 150 years ago. If advocates would just use "common carrier" instead of "network neutrality" we could quickly put this debate behind us.

Instead, by making "network neutrality" something new, controversy is created in what should be a settled area: common carrier status for communication infrastructure. Common carrier simply means that carriers handle all comers at a set fee, instead of auctioning access to their network.

Update: Professor Wu kindly sent me a brief note which said, in part: ". . . when I started using the term, CC was a non-starter in the policy world."

I responded "Your comment makes me very curious about why CC was a non-starter in the policy world. Federalist Society weirdness? Allergic Bushies? Dereg mania? Or something substantive?" If and when I get a response from Professor Wu, I'll pass it on. End update.

The auction model If network access is sold through an auction, the wealthy get good service and the rest of us get the leftovers. Carriers put their time and energy into maximizing revenue instead of minimizing costs.

If network access is available to all comers for a fee, then we all have equal opportunity to use the Internet for work or play. Providers can offer different service levels at different prices.

Look at FedEx: overnight costs more than 3-day delivery. But the important thing is that overnight costs everyone the same. Imagine going to a FedEx office with a time-critical legal document and instead of a flat fee they said "we have 1 overnight slot available - you'll bid against these other people." Very profitable for FedEx - not so good for you - or the country.

The sad thing Tim Wu, the law professor who originated the term "network neutrality" in the paper Network Neutrality, Broadband Discrimination (long, boring PDF) admitted as much:

Over the history of communications regulation, the Government has employed both common carriage requirements (similar to the neutrality regime discussed here) and limits on vertical integration as means of preventing unwanted discrimination. The goal of this section is to further explain how a common carriage or anti-discrimination model might be better developed to address the current Internet environment.

[emphasis added] Professor Wu is a very bright guy with a technology background who clerked for conservative superstar Richard Posner. Like many techies though, he has no marketing chops whatever.

The Storage Bits take The carriers, be they telco or cable, would love to be able extort high fees from users, and politicians love getting big campaign contributions for defending the "free market." BTW, the US Congress is an auction-based service provider - how do you feel about them?

But it is in the national economic interest that we have a high-speed Internet infrastructure that is available to all without discrimination. You know, a national freeway for data.

As I noted in an earlier post (see P4P: faster, smarter P2P) about Comcast, the telecoms want to make their network management problem your problem.

Rather than saying they can’t compete with DSL or fixing the problem through protocol or equipment upgrades, they’ve been fighting the common-carrier law.

That’s just wrong. Common carrier status for telecom is over 160 years old. It has stood the test of time for very good reasons. Comcast needs to get with the program: either get competitive . . . or get out.

It isn't too late to frame the debate in a term that the public better understands and supports. Google can start by banishing the term "net neutrality" from their vocabulary. Hey, Google! Just do a "search" and replace. Think you can manage that?

Comments welcome, of course. Disclosure: I work on the Internet and live in the boonies. Non-discriminatory Internet access is of intense personal and business interest to me.

Topics: Mobility, Networking

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  • The problem, mixing social with business.

    The problem here is Robin is trying to treat a massive business investment (billions in captial investment) as if its a socialized publicly owned utility which it is not.

    Other countries subsidise connectivity/ISPs because they believe having broadband everywhere is critical to their future. The US has decided to let the market place make that provision which means it will ALWAYS be subject to behaving as a FOR PROFIT operation.

    Sorry but the truth is, you can't force socialized behavior on a for profit company and expect it to survive much less actualy get ahead and pay a return to the investors.
    • Look no further than your elecric company.

      They are forced to sell electricity at specified rates to all customers. Yes, some types of customers (residential vs. business) pay more than others, but all customers of a given type pay at the same rate.

      They are not allowed to charge you a higher rate than your neighbor even if you have 3 times the income and 6 times the electricity usage.

      Now, my local electric company is owned and operated by the local government, so technically it is a socialized publicly owned utility. The town across the river is served by a for-profit electrical company that manages to churn out profits despite being forced to do certain things by government regulations.
      • Sort of true, but not really.

        With the electric company we are talking about a regulated monopoly with no competition. In most cases that is not true with the internet. (I can have cable, DSL, Fiber, Wireless, Satelitte, etc.) Nor is there a "speed" comparrison, electricity is what it is.
        The other HUGE difference is that if I string a wire to your home, it will last for decades, not true of the hardware for an internet connection. The backbone, the last mile, and even the modem in your home are constantly being upgraded.

        What many seem to want is for the ISPs to provide the billions needed for capital improvements to add more speed, but they don't want to pay for it, or find they can't do as much as the neighbor that is paying for it.
        • Speed is not the issue.

          Adding more speed is a bit of a red herring.

          That's really not what the whole "Net neutrality" thing is about. The problem is that some ISPs, Comcast and Telco's in particular, want to charge more for some bits than for other bits. If you want the "good Internet," you and your neighbor must bid against each other until a winner is chosen. Never mind that both of you are using identical cable modems on the same network loop, only one of you gets to "win."

          They want Google and Yahoo to bid against each other for the "best" ability to deliver bits to you. That is a direct contradiction of what a common carrier is supposed to be and do.

          If an ISP wants to go that route, I'm all for letting them. But only if they are willing to give up the protections that they gain from being a common carrier. You know, little ones like not being responsible for the data traversing their network.

          None of that involves actually adding more bandwidth to the networks. But if Comcast wanted to, they could have spent some of last year's $2.5B in profit on new capacity. But like I said, that's a bit of a red herring. What ISPs like Comcast want to do is charge you more for what they provide without actually doing anything to merit the money.
          • Now thats COMCASTIC! [NT]

          • Sorry but it IS ALL about speed.

            Provider A can get their bits to you fastr than provider B.

            But like you, I am all for saying no more monopoly, no more reguglation, let the market do it.
          • The Feds tried the market

            Remember forcing the telcos to carry the competition on their lines at someone's calculation of cost?

            The elephants threw their mahouts at first opportunity, and thye Feds have surrendered.

            I suggest acknowledging the duopoly and preventing its excesses and encouraging beneficial actions as much as possible.
            Anton Philidor
          • Bad idea from the get, implemented even worse.

            Face it, there are a couple issues that the Feds SHOULD address but aren't, the biggeest being the seperation of Telcos, Cable, Wireless, etc. and treating them differently.

            The fact is, its all bits and doesn't matter how they are delivered along the last mile. Having differnt sets of rules for each mode of delivery is just, well its dumb in the extreme.

            Until that happens, and the playing field is level, there is no way the government can "prevent excess and encourage beneficial actions" effectively. The guy that can get away with something is going to do his best to use it to his advantage, that's pretty much what business is when you think about it.
          • It has nothing to do with speed.

            It has everything to do with maximizing revenue generation while minimizing infrastructure expenditures.

            Comcast wants to claim that they are not a common carrier so that they can make more money without actually having to do anything to earn it. Why invest in fatter pipes when they can take bandwidth from provider B to give it to provider A because provider A will pays them more?

            I am also NOT for no regulations even if the monopoly is removed. There is tremendous competition amongst banks. Are you saying they shouldn't be regulated?

            I say if Comcast does not want to be a common carrier, they should lose the protections afforded to them as a common carrier.
          • It's all about money

            The "Market" as envisioned by the current free marketeers ultimately comes down to a free for all wherein few win. A regulated market is to commerce as criminal laws are to society. You can't justly charge more to blacks than whites, nor can you auction off services that are nessesary to the success of a society be they roads, education or the frequency spectrum without creating the dismal third world conditions the US has been trending towards for years.
        • Example: Cell Phones

          Cell Phones don't fit your model. Infrastructure gets upgraded but I pay the same price per call. They don't charge me more to call the office than they do family.
          • Cell phones are not the best example

            Yes, infrastructure gets upgraded but you pay the same price per call. That is because the calls are not where they make their money. The voice plans are more of a break even or loss-leader at this point of time. They really want you as a subscriber so they can sell you profitable extras such as text messaging, web access, content delivery (such as music, videos), GPS, ring tones, etc.

            The cell phone companies upgrade their infrastructure so it will better support all the extras they want to sell you. I keep hearing about 3G network improvements - it is no longer about voice but about data delivery.
    • We get the worst of both worlds

      The telecommunications infrastructure tries to portray itself as a business, but as soon as any free-market threat looms, they fall back on any anti-competitive tactic they can find, including "socialized" public utility regulations, charter agreements that prohibit competition, and massive bribery of politicians and bureaucrats.

      That doesn't even include all the money that is harvested from consumers in the form of state and federal taxes, or the taxes that funded the development of the underlying technology in the first place.

      I'm sorry, but I have no sympathy at all for Time Warner, AT&T, Verizon, or any of the other companies who portray themselves as free-market businesses while operating internally as monopolies or quasi-government entities. After watching both AT&T and Time Warner deployed in force to quash a municipal WiFi initiative in my community, I am totally convinced they will do whatever they can to rape and pillage consumers who have no other recourse than pay through the nose.
      terry flores
      • One argument but that also has two sides.

        I agree, its a horrible mix between socialism and capitalism, but that is what the US wants. I would be all for tossing away the monopoly granted IF we also toss out regulation.

        You can't have it both ways, well, you can, and you get this mess...
        • You're asking the impossible

          >I would be all for tossing away the monopoly granted
          >IF we also toss out regulation.

          The history of business shows that that simply cannot happen. In the absence of anti-monopoly regulations, monopolies get created.

          I'm all for free markets, but the thing that most so-called "free market" people seem to consistently forget (or ignore) in this sort of debate is that free market economic principles only apply when freedom exists in the market, and a "market" is defined by the [i]buyers,[/i] not the sellers.

          That's the way the term's used in ordinary business conversation. What does the marketing division do? They persuade buyers to buy a product. What do they say if there's a planned product that nobody would want to buy? "There's no market for it."

          But that common-sense definition gets tossed out the window when people start to talk about a "free market." Nobody mentions the market itself; they talk about the freedom of the [i]sellers[/i]. And giving sellers unlimited freedom has always led to consolidation and monopolies, and the removal of competition and freedom of choice from the marketplace.

          Simply put, a free market cannot exist for any significant length of time without regulation.
      • Regulation can help.

        Assuming that the telcos can add capacity and profit, there'll be a duopoly with the cable companies. I suspect that the cable companies have been helping the network neutrality campaign because they have already made the necessary investments.

        Once a few companies have divided up territories like colonial powers, the restraint on prices won't come from those companies slowly increasing the bills in tandem. Instead, it'll have to come from government regulators.

        The battles you're seeing now are only the prelude to future conflicts when the attempt to increase the price of exisiting services is opposed to the need for faster, better services at a reasonable price.

        Bad as government interference may be, there are advantages to the public - us - from having some organization represent the public interest, however badly.
        Anton Philidor
        • I can't agree Anton

          Sorry but I see how badly government "help" has screwed things up and I can't say I favor any more of it.
          • If competitors could enter the market ...

            ... then government regulation would be industrial policy, and that has an honored history of failure.

            But in this situation, the telcos and cable companies are providing what can reasonably be considered an essential utility. Many people would have severe difficulties from losing the service.

            Regulation, however ineffectual, is better than being over a barrel.

            By the way, even Windows shows the value of competition. Microsoft must provide sufficient improvement to induce people to keep purchasing new versions of the same product rather than having them continue with (satisfactory) old versions.

            But when there is no market to which to leave improvement, regulation becomes necessary.
            Anton Philidor
          • Iahve heard that arguemnt and reject it based on...

            You know, I would like to be an auto manufacture. But the reality is, I can't, at least not in any effective manner. That's just the way it is.

            As to it being a "utility", no it is not, even though some may view it as such. If it *IS* to be a true utility, then lets quit messing around and make it a true utility subject to regulation across the board, not one set of rules for this group, another set for the other, a third for the next, etc.
          • Yes, consistent rules should apply.

            I agree with your assertions in this post and the other above.

            My only exception is temporary. The cable companies have made their investments while the telcos are catching up. The faster there's equivalent capacity, the sooner both participants in the duopoly can be governed by consistent rules.

            But right now, with the telcos at a disadvantage, applying equal rules would be discriminatory against the telcos.
            Anton Philidor