The Virtuous CIO  


September 26, 2010 — Net Neutrality

One of the debates raging across the landscape today in the tech industry has to do with user rights on the Internet. Most of the issues surfaced when Internet service providers began metering user access based upon the type of content being delivered. The argument advanced was that the actions of a few dogs needed to be limited so that everyone could have equal access to the net.

As is usual in this sphere, what was once a relatively simple argument became startlingly complex. The Internet service providers were accused of using traffic management policies to throttle competitors. The providers defended themselves by saying they were doing no such thing. Yet we have abundant evidence that providers have been throttling peer-to-peer connections and in some cases streaming services.

Further complicating the issue, we have the FCC working diligently to develop a legal pretext for entering the debate. Historically, the FCC has been limited to regulating the broadcast technologies. They are attempting to redefine their mission in such a way so that they have a legal cover for regulating the Internet.

Google and others have also entered the debate with proposals which clearly preserve their business models, while also delivering their content to the consumer. So now we have, at least, a three cornered debate with the proponents of each position making very good arguments and the opponents making equally good arguments against the other positions. It is tempting to say a pox on all your houses!

So what does the technology professional do in this situation? First of all, can your voice even be heard? Let's take a look at some of the issues.

First of all, the current system of controlling the Internet has worked pretty well over the past 15 years. Arguably it is not a system, but rather a free-for-all consisting of businesses, consumers, infrastructure providers, etc. Nobody would accuse the current system of being totally fair, and the unwary consumer can easily get run over by vendors exercising unbridled capitalism. We have the government, if we might be permitted to generalize, which also for the past fifteen years has sought to inject itself into the Internet for taxation and regulatory purposes. During the current economic crisis, governmental groups are becoming frantic to find new sources of revenue, and they look on the Internet, which is essentially untaxed, as a beacon star to financial solvency. Then we have the consumer. Most consumers assume they have unquestioned rights to Internet access, broadband performance, and whatever they want to do. And they will not hesitate to rail against any organization, be it business, government, or other, which gets in the way of their access.

Most proponents of regulation state confidently that the Internet has matured, and therefore requires regulation. This will have two consequences, one positive and one negative. The regulation will indeed protect consumers, and keep the worst abuses in check. On the other hand most of the dramatic innovation will probably cease. Inventors and venture capitalists have no desire to risk their money without the possibility of a huge payoff, and regulation tends to reduce those profits (which the do-gooders view as obscene).

What we tend to forget is how dramatically civilization has changed since the rise of the Internet. Knowledge and news know no boundaries. Perhaps the best restraint on poor behavior by businesses and Internet providers is the Internet itself. When somebody has a poor experience with a product they can't wait to blog about it, place notes in customer feedback websites, or spout off in special interest forums. This shines a light of publicity on a given business in a negative sense, and this is something they most definitely do not want. Many companies are happy to pay fines to regulatory organizations, and treat them as the cost of doing business. But dramatic negative publicity has a negative impact on sales far in excess of any putative fines.

True, the consumer will not always get everything he wants. But, sales impact is perhaps the best regulator of industry anyone can think of. It usually prompts an immediate reaction from the company in question, it prompts thousands of other consumers across the Internet to keep a closer eye on this company, and it has done so without the heavy hand of regulation, and the tax burden of supporting a regulatory agency.

It will be argued that this method will allow many companies to get away with "improper behavior." And the regulators do not? As an example we can look at the recent panic about salmonella infected eggs. The regulatory agencies had fined this company again and again, apparently without much success. The sudden spotlight of publicity had a very direct impact, though. There is no way to know how many grocery chains and wholesalers immediately shifted to a competitor's product, but it had to be significant. That business got very good at ignoring the government, and they apparently got away with it. I guarantee you that the current sales climate has their undivided attention.

So, therefore, I say we tell the FCC to butt out. Let's tell Google and the other major companies to leave things alone. We don't have the best in pricing and services with our Internet providers right now, but I'm confident it is probably better than the alternative.