Net Neutrality Continued

The Wall Street Journal (sub. req'd) ran a piece yesterday on how the issue of "net neutrality" is bogging down the Senate in its attempt to pass new telecommunications legislation, basically being driven by telcos who want the ability to sell TV services:

The Senate Commerce Committee already has postponed a vote on the bill twice this month and has yet to sort out how to tackle the issue of banning phone and cable companies from charging fees for content delivery, a policy known as "network neutrality." The policy is so controversial that Senate Commerce Committee Chairman Ted Stevens (R., Alaska) omitted any mention of it in his latest version of the telecommunications bill released over the past week.

Internet companies (eBay, Google, Yahoo!, Amazon) want to include regulations that will prevent what might be called "content favoritism." But here's the Telco/Cable incumbent ISP position:

"We need the ability to continue to invest," David Cohen, a Comcast executive vice president, told the Senate Judiciary Committee. He also said that companies such as Google were "demanding regulation based on hypothetical problems."

The phrase "ability to continue to invest" is a euphemism for "we're afraid we're going to get our proverbial asses kicked if we don't legislate an advantage."

The Internet players are probably overreacting to some degree, but the incumbent ISPs are misguided and trying to compensate for market weakness, in failing to be able to compete, through government regulation. If their strategy succeeds legislatively it will ultimately fail commercially. Consumers will get to the content and services they want.

It would be better to spend the money and time delivering services and content that consumers want rather than trying to limit what they can obtain or becoming toll roads to that content.


One Response to “Net Neutrality Continued”

  1. Chris Parente Says:

    “Consumers will get to the content and services they want.”

    Greg — I’m not as sanguine as you are. How exactly do they get to anything is the telco/cable ISPs control the on ramps?

    Not that I see this as black and white — companies have the right to recoup their infrastructure investments — but if the providers feel they are undervalued then raise their connectivity prices!

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