Political Gain and Net Neutrality

Last week, the Federal Communications Commission (FCC) came under fire for making a ruling that many consider outside its authority. Without levying a fine, it charged that Comcast (Nasdaq: CMCSK) violated federal policy when it interfered with a file-sharing application used by consumers. This new plot twist in the Net neutrality story should remind everyone that when it comes to new technologies, government failure is a bigger menace than market failure.

Some commentators hailed the FCC’s ruling as a sign that new laws are not needed to govern disputes arising from network operators’ management practices. Scott Cleland, a vocal opponent of Net neutrality legislation, said that the FCC’s ruling “showed that there is an oversight process in place and readily available to address anyone’s concerns about maintaining consumers’ right to access the lawful Internet content of their choice.” Yet, such a view glosses over the details, including the fact that consumers don’t need a government body to come to the rescue.

It’s true that Comcast appeared to engage in sneaky behavior such as “blocking customers who used a disfavored application,” and then denying it. However, after Comcast’s actions were clearly exposed, the company came to an agreement with BitTorrent to move to a “protocol agnostic” capacity management technique by the end of this year. Watchdog groups, as well as application providers, will be monitoring Comcast carefully to ensure it abides by its promise — but even if the company were to go back on its word, consumers could punish such behavior by voting with their wallets.

Don’t Like It? Buy Elsewhere
If they dislike Comcast’s network management techniques, consumers can easily move to a different network provider such as Verizon or AT&T (NYSE: T) . That is a better way to protect access to content than the FCC’s pronouncements, which threaten to box networks into a one-size-fits-all world.

Of course, one might argue that if Comcast can get away with blocking consumer use of Internet applications, then all networks might follow suit and subject their customers to abuse. While that is one of many possibilities, companies don’t tend to make money by abusing their customers, a good reason why such a scenario has not unfolded. Therefore, government should refrain from telling networks how to manage their traffic.

“Whether specific management techniques are appropriate should be decided by technical experts and marketplace interactions, not political appointees responding to interest group pressure,” argued Barbara Esbin, of The Progress & Freedom Foundation.

Esbin brings up an important point, and that is the significant danger of government failure. Internet management by government bureaucrats is a bigger threat than market failure, at this point — yet the interest groups who purport to speak for consumers don’t seem to notice.

Making Rules for the Sake of Making Rules
The FCC is a nonprofit entity, and, therefore, criteria such as power and politics — not money — shape its motives. In a world in which telecommunications has morphed into a simple Internet application, the FCC becomes irrelevant if it doesn’t govern the Net. This gives bureaucrats from both parties incentives to make new rules in order to stay in the game, as they did with their Net neutrality “principles” in 2005.

However, incentives to stay in power are not necessarily aligned with incentives to do what’s right for consumers. That should give everyone reason to consider carefully what is likely to happen if FCC Chairman Kevin Martin is successful in intervening to control the Internet’s future.

That would be a future in which lobbyists, interest groups, and power-hungry politicians controlled what consumers could access on the Net. It would be a future that looked a lot like the regulation-heavy telecommunications past. Despite assurances from Net neutrality activists that such a future wouldn’t include price controls or infrastructure-sharing, it would only be a matter of time before such arrangements emerged. Repeating those mistakes from the dark days of telecommunications history would be both careless and downright stupid.

Serious technologists on both sides of the debate agree that engineers, not politicians, should figure out the best practices. In a world where technology is continually changing, methods of management need to keep up. That won’t be possible if government rules freeze networks in time.

Sonia Arrison, a TechNewsWorld columnist, is senior fellow in technology studies at the California-based Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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