Four Points of View on Net Neutrality

I’ve been trying to think of some reasoning and analogies for different points of view regarding net neutrality.

The easiest is the consumer’s POV: I as the consumer pay the ISP for internet access and pay content providers for content access, and ISP’s shouldn’t care how much data I use or when I use it. Net neutrality then seems like simply enforcing the agreement my ISP agreed to. There is a valid point to this, in that ISP’s do imply in their sales pitches that their services are unlimited. I have a feeling that this selling approach will begin to change if bandwidth demand stays ahead of network capacity at peak times for the foreseeable future. And why shouldn’t it? If ISP’s upgrade to handle HD video, streaming sites will start offering 4K/Ultra-HD, or 3D, or as-yet-unknown immersive technologies. Peak pricing will start to look attractive to ISP’s, but I’ll come to them in more detail later.

The next easiest is the content providers’ POV: like consumers, content providers are already paying hefty bills for their connections to wholesale providers like Level 3. I imagine that their contracts are more nuanced than a consumer agreement, but the Netflixes and Youtubes of the world obviously want to minimize their costs and keep their prices low. They don’t just compete with each other, but with DVD kiosks, sharing, ripping, torrenting, and cable and satellite providers. Maybe they’re not cynical about it, but popular sentiment about net neutrality is certainly beneficial to their prospects for staying in business.

The ISP view is harder, but knowing something about the technology, I do have (some) sympathy for them: Their position is like an owner of an all-you-can-eat Chinese buffet. They did pretty well until people started coming in and filling their plates with only the most expensive dishes during the dinner rush. They couldn’t raise their prices or skimp out on food too much or the regular, profitable customers would start to go elsewhere. But when they asked the expensive-dish-gorgers to cut back or leave, the gorgers threatened to sue them for false advertising. Like the restaurant owners, ISP’s are facing an unsustainable business model. They see net neutrality as a barrier to more creative business models in favor of the popular status quo. I’m not saying ISP’s are the victims; they clearly have money and influence (such as getting states to block municipalities from competing with them directly), but locking them into an unsustainable status quo doesn’t incentivize them to improve.

I’m not sure I can fully anticipate the regulators’ point of view: The FCC is the main player, and that agency may be feeling its age as it becomes increasingly irrelevant to the digital age. Increased regulation of ISP’s would give it a nice, long lease on life. There are also political points to score, and savvy politicians can play all sides. I would expect any net neutrality regulation that passes will nominally restrict ISP’s and establish some sort of anti-trust whereby they aren’t allowed to offer streaming services, but will also entrench their monopoly position as a sort of subsidy to keep them from going broke. That would mean no more Google Fiber or municipal networks, and likely even slower, grudging bandwidth expansion in most areas.

In my opinion, if the Feds want to promote better Internet access, they need to open up some of the prime wireless spectrum that’s reserved for non-existent TV and radio stations to use by long-range “last mile” wireless Internet providers. Municipal networks are not ideal, and they face their own perverse incentives (like the municipality controlling rights of way for would-be competitors), but they could play a role.

A massive amount of bandwidth is used up broadcasting the dozens or hundreds of HD cable channels. It’s important to allow competition to major studios’ content that will change consumer demand and push the hybrid ISP/cable providers to be ISP’s only. Trimming back on copyright terms and powers would, I think, help toward that end.

Of course, I doubt that politicians and regulators have anywhere near the incentive to do something like my preferred policies, so it’s pretty safe to expect a “net neutrality” ruling that is as beneficial to ISP’s as it is to major studios and broadcasters.