Gatekeeper, Meet The Keymaster

I talked about the FCC's pending net neutrality rules yesterday and noted how a prime example of a corporate conflict of interest created by these rules was Comcast charging internet backbone providers for streaming video through Netflix while Comcast is slated to complete its merger with NBC/Universal and gain its own streaming video service in Hulu.

Apparently the FCC more or less completely folding on net neutrality is not enough for the Washington Times, proclaiming in an unsigned editorial the end of the internet unless the FCC is completely removed from the oversight process.

It's not clear why the FCC thinks it needs to intervene in a situation with obvious market solutions. Companies that impose draconian tolls or block services will lose customers. Existing laws already offer a number of protections against anti-competitive behavior, but it's not clear under what law Mr. Genachowski thinks he can stick his nose into the businesses that comprise the Internet. The FCC regulates broadcast television and radio because the government granted each station exclusive access to a slice of the airwaves. Likewise when Ma Bell accepted a monopoly deal from Uncle Sam, it came with regulatory strings attached.

No such rationale applies online, especially because bipartisan majorities in Congress have insisted on maintaining a hands-off policy. A federal appeals court confirmed this in April by striking down the FCC's last attempt in this arena. "That was sort of like the quarterback being sacked for a 20-yard loss," FCC Commissioner Robert M. McDowell told The Washington Times. "And now the team is about to run the exact same play. ... In order for the FCC to do this, it needs for Congress to give it explicit statutory authority to do so."

Freedom and openness should continue to be the governing principles of the Internet. That's why Mr. Genachowski's proposal should be rejected and Congress should make it even more clear that the FCC should stop trying to expand its regulatory empire.

So Comcast will lose customers and they will go to another broadband provider if that happens, is the argument.  The problem with that is for millions of Americans there's no competition to go to, especially for businesses who are increasingly turning to telecommuting and teleconferencing to save money.

Small businesses want choice and competition in the broadband service market, according to a new government report, but unfortunately they aren’t getting either.


A report from the Small Business Administration’s Office of Advocacy also found that there are statistically significant differences between metro and rural areas in terms of broadband speed, availability and price.

About one-third of small businesses surveyed for the report indicated a need for broadband service requiring greater capacity networks than currently exist.

So the question then becomes "who pays for the needed infrastructure to increase availability, competition, and lower prices?"  Remember, the "free market solution" says that anyone who charges fees to cover the cost of infrastructure will lose customers.  Remember also that the government's not allowed to do it either because it's a "technological boondoggle for taxpayers" because after all government infrastructure is evil.

The result is exactly what we have now:  a system where nobody will pay for the infrastructure and as a result broadband remains unavailable to millions, and millions more are locked into a monopolistic situation where there is only one provider of broadband that serves the area.

Never mind that broadband providers already get subsidies from the government.  The solution really is obvious:  a system where the government provides the infrastructure and the broadband companies then maintain it and provide service at a fair price, the way water and power utilities work today.  It would create jobs for the construction of the network, and keep creating jobs as the barriers to providing broadband service and entering the market as a provider fell...creating competition, benefiting the end consumer with lower prices, not to mention the country would have broadband access.  Seems like a solid investment in our technology base to me.

But no, the only acceptable path is to rid ourselves of the FCC and hope the billion-dollar corporations "work something out" magically.  The rationale to protect the consumer?  Who cares about that in 2010?