Hard truths about “net neutrality”

This is a follow up to my case about “net neutrality.” 

There is a reason the net neutrality debate is has dragged on for many years. In reality, “neutrality” is not a coherent concept that applies to the Internet. There is no objective definition of what “neutrality” means or how it may be implemented.

The real Internet is not the simple political model of backbone providers, ISPs and consumers, but a complex balance of peering arguments, CDN’s, and “short-cut” interconnects. Non-neutrality is already an essential part of the modern Internet.

What the net neutrality lobby really wants is a competitive market. But there is no simple regulatory regime that can be applied to create a competitive market. Historically, political attempts at creating competition (antitrust and “public utility” regulations) have had the opposite effect – they are quickly captured by industry and used to create barriers to entry.

In order to make progress on this issue, we must admit a few things:

  • The current status of a few monopoly providers is indeed broken
  • Abuses of power by ISP’s are a legitimate problem
  • Much of the responsibility for this issue lies with local governments that created legal monopolies and exclusive contracts which created the current situation
  • The only legitimate solution will come from politically painful changes that will create a competitive market for Internet service

Consider that Internet technology has evolved very rapidly – Facebook and Google are only possible because of rapid and ongoing American ingenuity needed to manage the massive data flows our status posts and selfies create. The unregulated market for Internet technology stands in the stark contrast to the market for Internet service.

In my opinion, the ultimate blame for the “last mile” problem lies with city governments which are politically unable to provide a competitive framework for Internet service. Corporations like Comcast and Time Warner are the only entities that can thrive in this environment.

What is needed is a grassroots effort to force cities to open up their infrastructure – for example, by allowing businesses to build connectivity using existing public utility services and to establish a competitive market for wireless spectrum. Because this is a threat to both the current providers and the FCC, this is unlikely to happen. It is much easier for pressure groups and politicians to blame corporations and federal agencies than to take responsibility for their own city governments.

The idea of a “natural monopoly” for Internet service is a myth. There is nothing inevitably monopolistic about it that American entrepreneurial ingenuity cannot solve. For example, hundreds of ISPs could operate over our wireless spectrum given modern frequency hopping and software defined radio technology and a competitive spectrum market. And a single fiber optic line can be used by many providers if a suitable financial arrangement can be found. The problems we face are political, not technical.