Net Neutrality's Threat to the Future of Media

Congress has been criticized frequently this year for writing legislation that is so huge--climate change legislation topped 1,000 pages, healthcare will be even bigger--that no one has the time to read it. But even when Congress writes short, easily digestible bills, it's no guarantee of improved quality. Bad things can come in small packages. The latest exhibit is a recently proposed regulation of the Internet.

At a relatively modest thirteen pages, The Internet Freedom Preservation Act of 2009, co-authored by Reps. Ed Markey (D-Mass.) and Anna Eshoo (D-Calif.) would place burdensome new regulations on a still-evolving medium. The so-called "net neutrality bill" will slow innovation and lock a media and communications status quo in place.

What harm is the bill trying to address? It isn't. Instead, it is a pre-emptive effort to forestall what the bill's supporters see as a potential threat. "The national economy would be severely harmed," the bill says, "if the ability of Internet content, service, and application providers to reach consumers was frustrated by interference from broadband telecommunications network operators."

The so-called "net neutrality bill" will slow innovation and lock a media and communications status quo in place.

To understand what is happening, it's important to realize that the activists and Congressmen on Capitol Hill pushing this bill feel about large Internet Service Providers, such as cable and telecom firms, the way Greenpeace feels about oil companies. So they are pushing legislation that will politicize and micromanage how these firms handle the Internet traffic that moves over their lines.

This management from Washington is allegedly needed because, according to the bill, "Internet access service providers have an economic interest to discriminate in favor of their own services, content, and applications and against other providers." The net neutrality bill will mandate that all bits travelling over the Internet's pipes be treated equally as the name implies, and the "net" must be "neutral" with respect to the varieties of data flowing through its pipes.

There are myriad problems with pre-emptively regulating the Internet in this way. Mark Cuban, the founder of Broadcast.com and current owner of the Dallas Mavericks points out that "in a net neutrality environment no bits get priority over any other bits. All bits are equal. In such an environment, all bits contend with each other to ride the net. When that happens, bits collide. When bits collide they slow down. Sometimes they don't reach their destination and need to be retransmitted. Often they don't make it at all."

The reason this is a problem for Cuban is that he believes "there will be applications that require lots of bandwidth, that will change our lives. If the applications that could change our lives have to compete with your Facebook page loads and Twitter feeds among the zillions of other data elements carried across the net . . . that's a bad thing."Cuban is not a disinterested party here. He is an entrepreneur making a big bet on high-definition television content and applications piped over the Internet. He thinks "over-the-top" video applications will transform how we consume media. For someone with Cuban's entrepreneurial vision of media's future, excessive regulation of this kind may strangle it in the crib.

There is an irony here that the bill's architects don't seem to realize. The bill claims "to foster an evolving level of capacity available throughout communications networks to support competition and innovation for lawful Internet content, applications, and services, including applications and services that require substantial downstream and upstream bandwidth" [emphasis added].

But as Cuban points out, "When video bits don't arrive to their destination in a timely manner, Internet video consumers get an experience that is worse than traditional TV distribution options. That is good for traditional TV." So the bill actually helps incumbent media providers at the expense of entrepreneurs and media consumers.

Indeed, the regulation threatens to lock in place today's media and communications universe. If you are happy with it, you'll love these regulations. "If you run a TV network, broadcast or cable, you should be spending a lot of money to support Net Neutrality," Cuban says.

The Internet has been able to grow so successfully in part because it hasn't been politicized--yet. The engineers and scientists who volunteer to develop the evolving set of protocols that govern the Internet collaborate to ensure that Internet capacity continues to grow and adapt to new needs and challenges. This process works remarkably well and shows no signs of falling apart. The only thing that can harm it is foolhardy regulation. Politicizing this intricate process of cooperation and trial and error--particularly when no harm has been demonstrated--is both dangerous and unnecessary.

Nick Schulz is the DeWitt Wallace Fellow at AEI and the editor-in-chief of American.com.

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About the Author

 

Nick
Schulz

  • Nick Schulz was the DeWitt Wallace Fellow at AEI and editor-in-chief of American.com, AEI's online magazine focusing on business, economics, and public affairs. He writes the “Economics 2.0” column for Forbes.com where he analyzes technology, innovation, entrepreneurship, and economic growth. He is the co-author with Arnold Kling of From Poverty to Prosperity: Intangible Assets, Hidden Liabilities, and the Lasting Triumph Over Scarcity. He has been published widely in newspapers and magazines around the country, including The Washington Post, The Wall Street Journal, the Los Angeles Times, USA Today, and Slate.


  • Phone: 202-862-5911
    Email: nick.schulz@aei.org

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