Fee-happy broadband cable shows its true "net neutrality" colors

As the U.S. Senate Commerce Committee held hearings about net neutrality yesterday, it's worthy to note that cable broadband service providers have been strangely noncommittal about their feelings on the issue.

Net neutrality is the principle that high-speed Internet service providers should not charge- and not be allowed to charge - fees to high-bandwidth services to be carried on their networks.

Big telecom has been more vocal. Maybe that is because of the personalities involved, including the "let 'er rip" personality of AT&T (formerly SBC) CEO Ed Whitacre. He is on record for using mildly salty language to question the appropriateness of not charging these fees. BellSouth and Verizon representatives have been somewhat more genteel, calling for negotiations on a carriage rights structure that would be fair to all.

Of course, they would like to be the ones to decide what is fair and what is not.

Where is cable in all this? Officially, they will tell you they are watching from the sidelines with more than passing interest, but ask why in the dickens anyone would want a net neutrality law.

Comcast chief executive Brian Roberts told investors during the company's most recent earnings report that "we continue to believe that proponents of the so-called net neutrality are pursuing a solution in search of a problem."

But I don't believe this for a second. Comcast and all the other big cable broadband service provders have never met a fee they didn't like. If you don't believe me, look at your cable bill.

So I am betting they will see if a Congress sympathetic to big telecom refuses to codify net neutrality as law, and either with the FCC's help or without it, gives a green light to the practice.

And it is not just my suspicions that is fueling this belief. During the Commerce Committee net neutrality hearings, broadband cable's own trade association President sounded very much like the head of an industry who would love to jump on the carriage fees bandwagon.

I am talking about Kyle McSlarrow, CEO of the National Cable and Telecommunications Association. He cautioned that enacting net neutrality as law could sound "warm and fuzzy" but could slow down development of advanced networks.

If you still believe that cable is not as opposed to net neutrality as their telecom competitors are, I bring you this extract from Kyle McSlarrow's Senate testimony yesterday. McSlarrow said in part:

Companies like Google have come out of nowhere to build a global empire with a market cap of over $100 billion, and if you consider other companies which push net neutrality like Yahoo and Amazon.com, you are talking about some of the most successful companies in the world. It is obvious that
they were wrong four years ago . . . all of them have flourished. The irony is that they flourished in large part because cable companies, telephone companies, and wireless providers have invested billions in building a broadband infrastructure that supports their business model.

Right now, innovation is exploding down the broadband highway, and perhaps unwittingly, proponents of net neutrality have chosen the right phrase . . . they would risk throwing all of that into “neutral” . . . and freezing innovation and investment. One has to ask, why?
While these companies will tell you that they are just looking out for the next generation of entrepreneurs, that claim is, in my opinion, disingenuous. To the contrary, now that these companies have achieved a leadership position in the marketplace, they want to foreclose any new business model that would enable new entrants to challenge them.
The large Internet companies have succeeded with the current network architecture and have made a great contribution to our nation; but who is to say what the next network architecture might look like? With net neutrality, and little or no incentive to invest in capital intensive networks, we will likely never find out. As some have noted, by not allowing experimentation, you force all networks to compete only on size and price, which benefits only larger players, limiting the many types of competition and innovations that are emerging today.
Just as Google and Yahoo! have an incentive to invest in new broadband platforms like broadband over power lines (BPL) and WiFi, broadband providers may have incentives to invest in entrepreneurs who have a new application which might compete successfully with today’s Internet market leaders, in order to bring more customers to the network.
What is really going on here is that companies that started as entrepreneurs and innovators are now so invested in the status quo that they fear – not cable or telephone broadband providers—but that next idea, the next search engine that takes off. What they are asking you to do is to freeze the Internet in place, with their position in the marketplace locked in.
There are many possible outcomes of doing so, but the one thing I am confident of, is that it would not be the consumer who benefits. 

Maybe what he is really saying is that broadband cable is watching these net neutrality proceedings real carefully, and will join in with the telcos in opposing net neutrality if it looks like the principle may become law.