The Net Neutrality Debate, or Is It a Net Neutrality Debacle?

I wrote about the FCC’s Net Neutrality proposal a few months ago and the debate is heating up again.

Perhaps comedian John Oliver explained it best back in June: At issue is the creation of a two-tier system, or rather an HOV lane for those services that can pay more — players like Netflix, who recently signed service agreements with the largest cable provider Comcast.

Some time back, the FCC asked the public to comment on Net Neutrality and now those comments are being published. A report summarizes more than a million of the comments received, the gist of the feedback indicating that less than one percent of those commenting oppose Net Neutrality.

Is this surprising? No—of course the average person favors Net Neutrality because it means equality, paying less and getting better service. The bottom line, though, is that we are still in a messy situation and, sadly, I can only anticipate that further lobbying will win the day for the big players. The term Net Neutrality can be confusing, even though there is nothing unclear or neutral about implementing a fast lane.

I agree that broadband providers building out multi-billion-dollar networks only to see large customers like Netflix or Google or Facebook reap the rewards at no cost is a problem. Just as big of an issue, though, would be those same providers—ATT, Verizon, Comcast and the other big cable companies who connect most US homes to the Internet—selling their own content to consumers in competition with smaller services that have to use their networks to reach our homes.

Treating Broadband as a Utility … Read On!

It is my opinion that broadband should be viewed as a utility and delivered as a utility. Consumers should be able to select and pay for the level of broadband they want, choosing the content and add-on services they want too, even if that content is provided by a smaller competitor of, say, Netflix that can’t afford the fast-lane rate. Content from a smaller provider should be available to consumers at the same speed as Netflix content, and not at a higher price either.

Furthermore, broadband providers should not have the ability to slow the delivery of another service, be it movie streaming or telephony, just because it competes with their own service. In our case, Phone.com may use broadband to deliver phone service, and having Comcast or AT&T block or slow our delivery because they too offer phone service should not be allowed.

Keeping It Commercial!

Google is trying to roll out its own broadband network so that it won’t need to rely on Verizon or AT&T. The Internet giant has started offering broadband in Austin, Texas, for example. Perhaps Microsoft has the power to do this too, but no one else comes close. Even Apple relies on either residential broadband or 3G/4G networks to support their devices.

Small service providers have no choice but to rely on large broadband providers, which is why I believe broadband should be delivered as a commercial utility, as opposed to a public one. I live in New Jersey, and after Hurricane Sandy I can tell you that no one here needs a reminder of the quality of public utilities. The Internet must evolve to meet the challenges of scale technology and scale that lie before us, so we need whoever provides broadband to be continually upgrading their networks.

To be fair, if a particular service (and again, Netflix is often the example given) appropriates much of the bandwidth and slows the delivery speed of other services on the network, is that a desired result of Net Neutrality? Is it fair to Verizon? Verizon’s Fiber Optic Service (FiOS) customers will complain that service is slow and Verizon’s billions will be going to benefit Netflix while others (including Verizon) will suffer.

Bringing It All Together

If providers were to offer broadband as a commercial utility in a just and equitable way, they would charge consumers the appropriate price for the level of broadband service they choose. They could also put measures in place to regulate general Internet traffic speed, based on need, without allowing larger players to sideline competitors. As regulated commercial broadband utility suppliers, they would also not favor their own content in the market at the expense of other content and service providers.

I don’t see Verizon (and AT&T and Comcast) offering services like phone service, TV and their own Internet services, while at the same time controlling the broadband that other competitive content providers need in order to reach the consumer. That for me is the Bell System breakup of the 21st Century. Before the Bell breakup, we had one big AT&T controlling all phone services nationwide and also, through Bell Labs and its product arm, controlling all the switches and other phone network infrastructure that was needed to provide service. This monopoly broke up in several phases over 20 years and it began when competitive phone companies started popping up.

So to summarize, the US needs a different kind of broadband-provider model—one that offers multiple, competing sources (fiber optic, coax and wireless broadband, for example), provided by companies prepared to focus on developing infrastructure NOT on providing content over those networks. And the markets are sure to figure out the right pricing model that, with the help of positive regulation, will prevent incumbents’ advantage and foster innovation.