Washington, DC has been rife with politics and scandal, so perhaps it should not come as a surprise that needed reform (deregulation) of telecommunications has been derailed by so-called “net neutrality” legislation--a great example of scandalous politics.
In sum, “net neutrality” is an effort to eliminate, or at least radically restrict, freedom of contract between Internet service providers and content creators, and to inject a large dose of government control into what is now a free marketplace.
Supporters of this idea, such as Google and Yahoo!, want to require companies that provide Internet access into homes and businesses--usually cable TV and telephone companies--to treat all of the data flowing through those connections (known as “content”) the same, regardless of its importance.
So, your emergency phone call might get dropped because your neighbor is downloading the Victoria’s Secret show, or the emergency storm notice on television may go black because your kids are overloading the search engine looking for games. In other words, every single item gets the same service regardless of importance, relevance, size or financial clout.
The “outrage” began when a few Internet giants feared they may have to negotiate and then enter into contracts with companies who would be willing to provide them better service for delivery of their product. They have expressly scoffed at the notion of having to spend time entering into service contracts with Internet providers, decrying that such efforts distract from their purpose and somehow harm the “open nature” of the Internet and information. Imagine if the federal government required FedEx or UPS to operate the same way--to accept all packages and deliver them without being able to charge for the service.
And it is true some network operators that provide Internet access have considered charging willing content providers higher fees for improved services, such as faster service, more reliable service, making their content preferred content, and high-definition streaming video of their content.
Under a net neutrality law, they couldn’t do that. And yet, perhaps surprisingly given their arguments, Google and Yahoo! do exactly the same thing already.
For years Yahoo! was the preferred page when a person purchased SBC (now AT&T) DSL service. So preferred in fact, that all of the automatically loaded icons loaded onto the computer featured a specialized logo for SBC-Yahoo! In addition, this year Yahoo! partnered with Cingular, Nokia and AT&T to create a product to tie Yahoo! right to the mobile handsets, and mobile service provided by the other companies.
Google also announced several initiatives this year, including agreements with Motorola and Ericsson which will give preferential treatment to Google. Company spokespeople were joyous.
“Yahoo! Go Mobile is a revolutionary step toward connecting Internet users to their favorite web [sic] services… Yahoo! has created a truly unique opportunity to launch a new service that is unmatched in the market. We have listened to consumers…”
“Many of our customers have been asking for mobile devices integrated with their consumers’ favorite online search services.”
“With immediate access to Google, millions of Motorola users worldwide will be able to quickly and easily find information that’s important to them.”
“By providing people with direct access to features like mobile search and blogging, we’re able to create a more personalized, user-friendly experience…Commencing today Google will become the standard search engine for all new Sony Ericsson Internet capable phones. It has been tightly integrated…”
In the end, this debate is really about large entrenched players trying to use the indelicate cudgel of government regulation to freeze their suppliers, gain unrealistic predictability, and widen their margins without being concerned with the operations or costs of others. Of course all of this could be accomplished with negotiations and private contracts instead of further regulating private industry.
But their own spokespeople have argued for the free market better than we could have. I will Google “success,” “competition,” and “innovation” -- you Google “hypocritical.”