January 13, 2006 ·
The Washington Internet Daily (which apparently is not on the Internet) has a story predicting the Telecom Bill will pass the House this year. The only sticking point seems to be the “controversial” “net neutrality” proposal. Says Howard Waltzman, the committee’s majority chief telecom counsel, and “net neutrality” opponent: “We’re going to rely on the market to regulate these services and not have a heavy hand in government regulation.” Waltzman thinks net neutrality regulation would turn “broadband pipes into railroads and regulating them under common carriage.” As he explains:
“The reason the Internet has thrived is because it’s existed in an unregulated environment. Regulating… under common carriage would be a complete step backward for the Internet.”
So half right, but wholly wrong. For of course, when the Internet first reached beyond research facilities to the masses, it did so on regulated lines — telephone lines. Had the telephone companies been free of the “heavy hand” of government regulation, it’s quite clear what they would have done — they would have killed it, just as they did when Paul Baran first proposed the idea in 1964. It was precisely because they were not free to kill it, because the “heavy hand[ed]” regulation required them to act neutrally, that the Internet was able to happen, and then flourish.
So Waltzman’s wrong about the Internet’s past. But he’s certainly right about what a mandated net neutrality requirement would be. It would certainly be a “complete step backward for the Internet” — back to the time when we were world leaders in Internet penetration, and competition kept prices low and services high. Today, in the world where the duopoly increasingly talks about returning us to the world where innovation is as the network owners says, broadband in the US sucks. We are somewhere between 12th and 19th in the world, depending upon whose scale you use. As the Wall Street Journal reported two months ago, broadband in the US is “slow and expensive.” Verizon’s entry-level broadband is $14.95 for 786 kbs. That about $20 per megabit. In FRANCE, for $36/m, you get 20 megabits/s — or about $1.80 per megabit.
How did France get it so good? By following the rules the US passed in 1996, but that telecoms never really followed (and cable companies didn’t have to follow): “strict unbundling.” That’s the same in Japan — fierce competition induced by “heavy handed” regulation producing a faster, cheaper Internet. Now of course, no one is pushing “open access” anymore. Net neutrality is a thin and light substitute for the strategy that has worked in France and Japan. But it is regulation, no doubt.
So while it is true that we have had both:
(a) common carrier like regulation applied to the Internet, and
(b) basically no effective regulation applied to the Internet
and it is true that we have had both:
(c) fast, fierce competition to provide Internet service and
(d) just about the worst broadband service of the developed world
it is not true that we had (c) when we had (b).
We had (c) when we had (a), and we have (d) now that we have (b).
But in the world where the President has the inherent authority to wiretap telephones, who would be surprised if facts didn’t matter much.
Broadband is infrastructure — like highways, if not railroads. If you rely upon “markets” alone to provide infrastructure, you’ll get less of it, and at a higher price. (See, e.g., the United States, today.)