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December 15, 2008

Net Neutrality and the Obama Stimulus Package

As long as US telecom is duopoly dominated, a neutral Internet is endangered if not impossible; regulation of this kind of concentrated power is necessary but is unlikely to be sufficient. The solution, IMHO, is to dilute the power of the duopoly so that consumers can buy whatever kind of Internet access they want. Countries like the UK with a competitive ISP market do not seem to have net neutrality problems nor require net neutrality regulation and have better Internet access than we do at lower prices.

Whatever portion of the Obama stimulus package is devoted to telecommunication should be directed away from the incumbent telcos and cablecos  – whose lobbyists are indubitably doing their job and already lining up for the lion's share of federal funds – and used to create infrastructure on which competition can flourish (ideas to follow). It will be a huge squandered opportunity and a misuse of public funds if the telecom infrastructure project ends up reinforcing the telco-cableco duopoly which now controls most of our Internet access

A Wall Street Journal article on Google's hopes to locate servers within carrier networks alleges that this plan is evidence that Google has abandoned its fervent support for net neutrality. Such a change of heart is denied by Google's Rick Witt, who points out, correctly, that what Google seeks to do for its own content is no different than what Akamai and other commercial caching providers already do for content providers. The story aroused extra passion because it also says that advisors close to President-elect Obama are "softening" their positions on net neutrality. At least one such advisor, Larry Lessig, who is justly famed for inventing creative commons licensing, denies on his blog that he has changed his mind, although he does say "Some friends in the network neutrality movement as well as some scholars believe it [his own long-held position on net neutrality] is wrong -- that it doesn't go far enough."

Larry's last sentence points out part of the problem with net neutrality regulation; it's almost impossible to write workable definitions. Fervent supporters of the concept of net neutrality disagree on what is or isn't a violation of such neutrality. There is a huge danger that any regulation would result in further advantage to the incumbents who are accustomed to using regulation to their advantage. Would you want to wait for the FCC to certify your new service neutral before you could introduce it?

On the other hand, it's easy to recognize the virtues of a neutral Internet. With a few exceptions, we've had that so far. The backbone itself delivers packets to anywhere from anywhere without trying to figure out who sent them or what they might contain.  It is wide open to innovation. It allows innovative business models whether they're disruptive or not – and whether they will ultimately succeed or not. Friend Om Malik warns "Many startups might skip over this issue, which I constantly bring up, but they need to wake up and realize that in the end they are all going to be impacted if network neutrality is backstabbed to death." He's right.

If we are stuck with the current duopoly, we will need regulation– and face the very real prospect that regulation may be ineffectual or even counterproductive. On the other hand, if we build a national telecom infrastructure upon which competition can flourish – as it does on the highways, for example – we won't need FCC regulation against discrimination any more than we need the ICC (Interstate Commerce Commission – founded to regulate Railroad transportation monopolies in 1887, RIP 1995) to regulate trucking.

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