Net Neutrality: Internet Retrogression

In a column in CNET published on June 1 entitled, "Watch Out We Don't Neuter The Net," I stated: "Strict Net neutrality mandates also mean ordinary Internet users must pay equally for the increased investment required to support some very resource-intensive activities, such as downloading movies or gaming. In effect, this is akin to imposing a retrogressive tax on those less resource-intensive consumers to subsidize sites, such as Google and Yahoo, which are responsible for generating the increased investment necessary to support high-traffic, high-capacity applications."

It was gratifying to see yestersday's Washington Post editorial, "The Internet's Future," make many of the same points that I made in my CNET commentary, especially the point that what the Googles, Yahoos, and Microsofts seem to be looking for are subsidies from lower-volume, less bandwidth-hungry Internet users. Thus, the Post concludes:

"Allowing builders of Internet infrastructure to recoup their investment by charging the Googles and Amazons for use of their network would balance the incentives for innovation more closely. Ironically, a non-neutral net would accelerate the spread of zippy broadband that can deliver movies, allowing hobbyists with camcorders to take on Hollywood studios. The neutrality advocates who criticize corporatized cable TV should welcome that. The weakest aspect of the neutrality case is that the dangers it alleges are speculative. It seems unlikely that broadband providers will degrade Web services that people want and far more likely that they will use non-neutrality to charge for upgrading services that depend on fast and reliable delivery, such as streaming high-definition video or relaying data from heart monitors."

Exactly right. The broadband marketplace is not perfectly competitive in all locales, but it is workably competitive in almost all. In this environment, unless and until there is some (unlikely) demonstrable market failure, far better to let the marketplace sort out the business arrangements which best enhance the welfare of all Internet consumers.