Monday, August 09, 2010

Can Someone Explain Why Net Neutrality Makes Sense?

Google and Verizon have made a proposal to deal with access over the internet.
The proposal says Internet providers should treat all providers of Internet content the same, and should not be able to block them or offer them a paid “fast lane.” It says the Federal Communications Commission should have the authority to stop or fine those who break the rules.
Eric Schmidt, head of Google, justifies their position with this:
Freedom from such discrimination is crucial for consumers and for fostering innovation among Internet entrepreneurs, said Eric E. Schmidt, Google’s chief executive, in a conference call with reporters. “The next two people in a garage really do need an open Internet,” he said.
Yes, and the next two guys in a garage also need free access to a supercomputer, lots of talented college graduates, and venture capital funding at TBill rates.

I suspect strongly that some consumers and some providers of content value the speed of access more highly than others. Economic efficiency calls for them to get that, so long as they pay the cost. Perhaps CEO Schmidt and others assume that their proposal will somehow result in everyone getting the technologically fastest access possible, regardless of cost? More likely, we will all get a mediocre level of service.

The US Postal Service has always given equal service at the same rates for urban and rural customers, even though the costs obviously differ. And Ma Bell (AT&T for youngsters) gave basic access to the phone system at the same prices.

I note that Ma Bell no longer exists in its same form, and the US Postal Service is about to die (only a slight exaggeration).

So I remain unconvinced. If I want to go faster than someone else, or let my customers go faster, why can't I buy a Corvette?

1 comment:

John Hicks said...

Yes, you should be able to buy a Corvette (or buy special treatment on the Internet), but at a published price that is available to everyone.

Allowing private deals for special treatment will result in an Internet that resembles cable TV. It will be dominated by a handful of content providers colluding with a handful of carriers, a cabal which will have the capital and legal clout to exclude anyone who doesn't meet with their approval.