The Troubling Thing About Net Neutrality

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While the concept that everyone should have access to the same amount of bandwidth on the Internet represents an attractive utopian ideal, there is a huge gap between what sounds good in theory and what's good for us in actual practice.

The concept of Net Neutrality being advanced by the Federal Communications Commission (FCC) is anchored on the premise that tax dollars paid for the creation of the Internet. That's true, but U.S. taxpayers don't pay for the equipment to access the Internet. That little cable modem in your home and the routers and switches it is connected to are all owned by your Internet service provider. You pay a monthly fee for the right to access these devices in much the same way you pay a fee to license software, but don't actually own it.

So what's troubling about Net Neutrality, and probably is unconstitutional despite overly broad interpretations of the Interstate Commerce Act, is that we're telling private entities what they can and can't do with their technology investments. And more importantly, we're telling these companies that they can't set up preferred sets of prioritized services. If that's permissible, then in theory airlines should not be allowed to charge for first class space because the plane travels through U.S. air space. Under the same theory, private companies that operate toll roads that connect the U.S, interstate highway system should not be allowed to ban trucks.

One of the cornerstones of capitalism is that if people are willing to pay more for additional services, they can get it. That in turn provides the financial incentive needed for companies to invest in the technologies that advance the performance of the Internet. If there is no financial incentive to provide differentiated sets of services, innovations from those investments will be profoundly slowed.

At the same time, if somebody is abusing a network by sending huge volumes of content that hogs bandwidth at the expense of other uses, a service provider should be obligated to take steps to prevent that. At the same time, if it's determined that a user is sending out content infected with malware, the service provider should be obligated to take steps to prevent that as well. Both cases mean that the service provider has to in effect provide differentiated sets of services.

As the debate over Net Neutrality increases, it might be a good time to think about what we are trying to achieve. It may be desirable to say that an individual has a right to some minimum level of service. It may also be desirable to make that a service provider does not use its network to compete unfairly in the delivery of applications.


At the same time, the Internet is now a global system, so there is some question as to whether the U.S. government should be imposing its mandate in a way that could have implications outside our borders.


Overly broad legislation and regulations tend to have a very real chilling effect on innovation. And that is almost always a bad idea.