What net neutrality means and why it\’s a good thing

This week, John C. Dvorak makes a good argument in favor of net neutrality.

I’m going to take it from a different angle. I am a conservative. While I rarely vote a straight Republican ticket, I am registered as a Republican. Republicans generally are against net neutrality.

They are wrong. I will assume it’s from a lack of understanding rather than bad intentions, but in this case, wrong is wrong. I’ll explain why. AT&T argues that it should be able to determine how companies on the Internet can use its network. Translation? If AT&T is running short on money this year, it ought to be able to turn down the throttle on Google or Yahoo or General Motors, and then if the company pays up, AT&T can turn the throttle back up. This is good for AT&T and its shareholders, but it isn’t good for anyone else.

Although they want you to believe otherwise, the likes of AT&T, Charter Communications, Comcast, and other Internet providers do not own the Internet. If you look at the history of telecommunications, the Internet is actually a very sweet deal for these companies.

Some 20 years ago, “going online” generally meant using a modem to dial into a pay service. My first online experience was with a service called Quantum Link (or Q-Link), which eventually became AOL. From Q-Link, I moved on to GEnie, a service run by General Electric, and finally to Compuserve, which for many years was the largest and most expensive service, run by H&R Block. Generally these services charged anywhere from $9.95 to $39.95 per month for membership. Usually an hour of use was included in the fee, then you paid an hourly rate beyond that. For your money, you got e-mail, message boards, downloads, games, and other services–not terribly unlike the present-day Internet, except it was all self-contained.

When the Internet started becoming widespread in the early 1990s, it meant the end of these services. Some of them moved their business to the Internet, finding other revenue streams. Others just faded away. The Internet is so much larger. Today, I can do everything on the Internet that I could do on Compuserve, but more so. I can contact people or companies without them having to sign a contract with Compuserve. Progress! Innovation! Fantastic!

It’s a sweet deal for the Internet providers too. One of the reasons Compuserve and the like charged so much was because they had to build all of it. They had to build and moderate the forums, they had to provide the disk space for the downloads, and all the other infrastructure. When you read the news, it was because Compuserve was either paying newswriters or paying the Associated Press for content. When you read the encyclopedia, it was because they had an agreement with Grollier’s.

AT&T and the like don’t have to do any of that. Build a pipe connecting me to the Internet, and someone else provides the content. AT&T doesn’t have to pay the Associated Press or Grollier’s when I access their content. It’s a sweet deal for me because I can go to Yahoo to read message boards and send e-mail and do everything I could do on Compuserve and more right there–let alone what I can do on Amazon, eBay, and other high-traffic sites.

If Yahoo, eBay and Google were to disappear tomorrow, I wouldn’t have much reason for Internet access. I’m certainly not interested in anything AT&T is providing on its own, because it’s all worthless, aside from giving me the ability to pay my bill online. Well la-de-freaking-da! That saves them time and money too.

Net neutrality is also pro-competition. Would it be right for General Motors to go to AT&T and pay them money to make sure nobody uses AT&T’s network to get to Ford or Toyota? Of course not. Yet if the anti-neutrality folks get their way, this is precisely what could happen. Further, AT&T could prevent me from accessing Charter Communications’ sites, either by blocking it entirely, or just making it painfully slow. How exactly is blocking me from competitors good for competition?

I also don’t buy the argument that net neutrality will discourage companies from offering more bandwidth. They’re already offering piddly rates as it is. I live less than five miles from the City of St. Louis. There’s a huge shopping mall about 2.5 miles from me. My suburb had a population of about 28,000 in the 2000 census. I’m not exactly in the boonies. What’s the fastest rate AT&T offers in my part of the sticks?

256K down and 128K up, that’s what. The very lowest-tier rate, no faster than its predecessor company was offering eight years ago when they started offering it in my area. I don’t know what’s worse, that their offering in my large and surprisingly affluent area hasn’t changed in eight years, or that it took until 2000 for them to even offer DSL in this area.

But for comparison’s sake, back in 1992 when there was still vibrant competition, 14.4K was state of the art. Over the next six years or so, that speed doubled to 28.8K, and nearly doubled again to 53K (an artificially imposed limit by the FCC).

Charter Communications offers up to 10 megabit speeds in my area. Why isn’t AT&T feeling compelled to offer something more competitive? I don’t know. But for whatever reason, competition isn’t working. Perhaps two competitors isn’t enough competition, and merely having a duopoly isn’t good for consumers.

While there’s been lots of new and exciting and wonderful content created since 2000, there hasn’t been much advancement in how quickly we can get that content. There are lots of things that we technically could do that would be exciting, but since speeds are stuck at 2000 levels, nobody would want it.

The doomsday scenario that the anti-neutrality people are predicting is already here, at least in my neighborhood.

AT&T is making so much money that they’re prowling around looking for companies to buy. Charter Communications is struggling, but that’s because it made a series of bad acquisitions starting in the late 1990s and took on too much debt. In either case, it’s not up to the government to give these companies a big handout at the expense of the companies that are actually providing the content that AT&T and Charter’s customers are paying to see.

I’m not exactly a big fan of government regulation. Essentially, I believe government’s job is to protect its citizens from thugs. But it’s pretty clear to me that AT&T is being a thug.

So that’s why a conservative like me is in favor of net neutrality. I have yet to see anyone demonstrate any tangible benefit to taking neutrality away, but the downsides are clear for anybody with any sense of history to see.

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