More waving of the net neutrality stick

24 Feb 2014

As featured on TM Forum's The Insider

Reutersreports that US Federal regulators will once again try to introduce ‘net neutrality’ legislation that would set rules to make sure broadband providers do not block or slow access to content on the internet, or charge content providers like Netflix or Amazon for faster web service.

Despite the US appeals court ruling that the Federal Communications Commission (FCC) lacked the authority to impose the rule requiring high-speed internet firms to treat all web traffic equally, it left the door open for further action.

The court did affirm that the FCC had the authority to regulate broadband as it oversees its expansion and competitiveness of services, giving the agency new legal opportunity to bring back non-discrimination and no-blocking regulations for internet service providers.

Yet concerns continue to grow, despite any indication to the contrary, that network operators will suddenly become greedy monsters and start limiting access to the internet or charging digital service providers, as well as customers, for the privilege of using it.

The Insider has always taken the stance that any communications service provider (CSP) or Internet service provider (ISP) that starts this ball rolling will probably discover, to its detriment, that market forces will kick in and customers will flock to their competitors.

Should there be any evidence of collusion or so-called ‘back door deals’ between network operators they would certainly feel the full brunt of anti-competition laws coming down on them. Yet the FCC, supported heavily by the Obama administration and consumer advocates, continues to make claims that the open internet is at risk. And all this in one of the most regulated industries existing – telecommunications.

Could there be an ulterior motive in governments wanting to strip any form of control that operators may have over their networks? Surely, in the wake of the Snowden revelations, it would seem they already have full access to all the data flowing over the internet themselves.

Verizon Communications, which challenged the FCC in court, argued the rules violated the company’s right to free speech and stripped control of what its networks transmitted. Extrapolating this further, operators could have lost the ability and right to manage their networks effectively if all controls were barred. The result could well have been a loss in network performance, just what the FCC was arguing against.

The one area that both the FCC and consumer groups will raise in their further attempts at introducing ‘net neutrality’ rules will be the continuous consolidation of the telecoms market, such as the proposed merger between the two biggest US cable and broadband providers, Comcast Corp and Time Warner Cable Inc.

Even these market changers can be stalled or stopped after review by the FCC if they are deemed reduce competition markedly or give too great a market share to any one player.

In Europe, Neelie Kroes (Vice-President of the European Commission responsible for the Digital Agenda) continues to taunt network operators with the ‘net neutrality’ stick in one hand, but with the other waves a magic wand that she hopes will encourage them to invest in new infrastructure to bring Europe out of the internet dark ages.

Good luck. If European governments cannot agree on standard internet policy, and are unwilling to invest in a pan-European objective, then it will be up to network operators or new players to build out the services. With paybacks of over 30 years to encourage investors, and the continuous threat of revenue restrictive ‘net neutrality’ rules, who would bother to invest?

What is actually wrong with the internet now? Why do we need governments or regulators to change anything under the guise of greater freedom and access for consumers when that seems to be in place right now, and at prices that are continuously dropping?

Maybe it’s time for the FCC and others to look for something more challenging to hang their hats on, like who will foot the bill for their utopian view. If internet access is so critical then why differentiate it from other ‘utilities’ like electricity, water and gas. They are all essential services supplied by providers that compete on price and service. Oh, and if you don’t pay your bill you can still be cut off.

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