Should the Government Regulate Net Neutrality?

Should the Government Regulate Net Neutrality?

Net neutrality is the principle that says all information flowing across the Internet should be treated equally. But with more people streaming data-rich video and playing online games, the Internet faces congestion concerns. Should carriers be able to sell multi-tiered access to heavy users? Should sites that generate massive traffic -- like Google and Yahoo! -- pay extra fees? The U.S. Government is examining Net Neutrality and its financial, legal and social implications. Do we need federal intervention to ensure fairness, or is this an issue for the market to work out?

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What Precipice?

The CATO Institute

What's striking about the arguments of all three pro-regulation contributors is that while they adopt the rhetoric of urgency, none of them has offered a specific explanation of what will happen if Congress does not enact new regulations. It may very well be true that the major incumbents would like to transform the Internet into a proprietary network, but thus far, there are precious few examples of them actually attempting to do so. Indeed, the only example of any significance that they've been able to cite is Comcast's interference with BitTorrent. And that example certainly doesn't support their argument.

Comcast interfered in a relatively minor way with one of the dozens of applications on the Internet. For its trouble, the company got a bunch of negative publicity, a customer backlash, and (thanks to header encryption technology) no real control over the use of BitTorrent on its network. By March, Comcast was in full-scale retreat, signing an agreement with BitTorrent, Inc, and pledging to stop blocking BitTorrent traffic by the end of the year.

By the time the FCC ruled on the issue in July, its involvement had been rendered completely superfluous by the progress of events.
 
Comcast wasn't posing a looming threat to network neutrality that the FCC had beaten back. Comcast had already surrendered months ago, and the FCC showed up long after the battle was over to claim credit for the victory.

The other examples network neutrality activists like to cite are even weaker. For example, Verizon briefly refused to give an SMS short code to a pro-choice group. Not only did this incident have nothing to do with the Internet, but Verizon voluntarily reversed itself just a few days later. Once again, any regulatory response would have been far too late to make a difference.

In short, there's no "precipice" here. Network owners don't have a magic wand that will transform the Internet into a proprietary network. The filtering and blocking tools network providers do have are clumsy and easily circumvented. There are plenty of people monitoring broadband providers' behavior, and they will ensure that any network neutrality violations get widely publicized. Network owners saw what happened to Comcast, and they learned that interfering with network neutrality is a bad business strategy: it's more likely to produce angry customers than larger profits.

The advocates of new regulation have been predicting the imminent death of network neutrality for three years now. Yet network neutrality is no more endangered today than it was at the height of the Congressional debate over network neutrality in 2006. If we do start to see real evidence that technological and market forces are inadequate to protect the neutral Internet, there will be plenty of time to debate and pass appropriate regulations at that point. But it would be a mistake to pass new regulations now based on purely speculative concerns.

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    The Cato Institute was founded in 1977 by Edward H. Crane. It is a non-profit public policy research foundation headquartered in Washington, D.C. The Institute... More

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