After reading Andy Kessler's take on net neutrality in the fresh Weekly Standard, it is painfully clear that the American people are getting the shaft, from both sides.
Hate to break the news, but your "fast" DSL Internet access is no longer considered high speed. In parts of the world, cell phones are faster. Have you wondered why Internet video doesn't fill your computer monitor and look like a DVD, but instead is pixelated dreck in a tiny one or two inch square? Well, Comcast is dragging its heels, too. With better video over the Internet, who would want E!, let alone the Style Network? Because of this Fred and Wilma thinking, the United States is 16th in the world in broadband use (behind Liechtenstein!) with East Timor catching up fast. The French may burn Citroëns, but they get 10 megabits for 10 euros--50 times your "fast" Internet access for half the price. That's just not right.
Betcha didn't know that. But Kessler doesn't think the net neutrality act is the answer. That would be like taking the slow boat to China (no pun intended.)
We'll never get 10 megabits to our homes, let alone the multiples of that speed that are possible and affordable today if these telco Goliaths keep covering up their crown jewels. As Dean Wormer might put it: Fat, drunk (on profits), and stupid is no way to go through life, son. But the answer is not regulations imposing net neutrality. You can already smell the mandates and the loopholes once Congress gets involved.
Here's an idea: Start screaming like a madman and using four letter words--like K-E-L-O. And fancier words like "eminent domain." I know, I know. This sounds wrong. These are privately owned wires hanging on poles. But so what? The government-mandated owners have been neglecting them for years--we are left with slums in need of redevelopment. Horse-drawn trolleys ruled cities, too, but had to be destroyed to make way for progress. How do we rip the telco's trolley tracks out and enable something modern and real competition?
Forget the argument that telcos need to be guaranteed a return on investment or they won't upgrade our bandwidth. No one guarantees Intel a return before they spend billions in R&D on their next Pentium chip to beat their competitors at AMD. No one guarantees Cisco a return on their investment before they deploy their next router to beat Juniper. In real, competitive markets, the market provides access to capital.
Without even being paid by the hour, I read through the Supreme Court's Kelo v. City of New London eminent domain rulings. Surely there exists some clever Silicon Valley counsel to twist the wording of the precedent. The telcos may want to treat the Internet like a shopping mall that they own, but the premises are looking awfully sketchy. So start with this line: "Economic underdevelopment and stagnation are also threats to the public sufficient to make their removal cognizable as a public purpose."
Sure, property rights are important, but that doesn't mean we can't shake a cattle prod at our stagnant monopolists and say "update or get out of the way." The mantra should be "megabits to phones and gigabits to homes." We'll only get there via competition. Regulations--even regulations that look friendly to the Googles and Yahoos and hostile to the telcos--will just freeze us where we are today.
IN THE LONG RUN, technology doesn't sleep. You can't keep competitive King Kong in chains. But why wait a decade while lobbyists run interference? If Congress does nothing, we will probably end up paying more for a fast network optimized for Internet phone calls and video and shopping. But this may not be the only possible outcome. Maybe the incumbent network providers--the Verizons, Comcasts, AT&Ts--can be made to compete; threatening to seize their stagnating networks via eminent domain is just one creative idea to get them to do this. A truly competitive, non-neutral network could work, but only if we know its real economic value. If telcos or cable charge too much, someone should be in a position to steal the customer. Maybe then we'd see useful services and a better Internet. Sounds like capitalism.
What new things? It's not just more bandwidth and better Internet video--how about no more phone numbers, just a name and the service finds you? How about subscribing to a channel and being able to watch it when and where you want, on your TV, iPod, or laptop? How about a baby monitor you can view through your cell phone? Something worth paying for. And that's just the easy stuff.
We don't even know what new things are possible. Bandwidth is like putty in the hands of entrepreneurs--new regulations are cement. We don't want a town square or a dilapidated mall--we want a vibrant metropolis. Net neutrality is already the boring old status quo. But don't give in to the cable/telco status quo either. Far better to have competition, as long as it's real, than let Congress shape the coming communications chaos and creativity.
Read it all. There's much we don't know.
UPDATE: from David Holcberg from the Ayn rand Institute;
"Net Neutrality" is an idea that has no place in a free market.
Cable and phone companies have no obligation to treat all Internet traffic equally. If these companies judge it to be in their self-interest to sell speedier delivery to certain content providers, they should be free to do so.
Just as FedEx and UPS are free to charge their customers for faster delivery, so should cable and phone companies.
The idea that cable and phone companies cannot offer superior services to some of their customers is an attack on their freedom. As owners of their networks, they have the right to run their businesses as they see fit.
