Proponents of regulating the Internet under a network neutrality regime descended on the Maryland Capitol recently, trying to take advantage of an overwhelming Democratic advantage to try to set an example for the rest of the nation. Fortunately for Marylanders and all Americans, they were routed. As it became apparent that his network neutrality bill would suffer decisive defeat in a body where Democrats hold a 108 to 33 advantage, Del. Herman Taylor Jr., D-14, withdrew his bill. The lesson here is that Google and MoveOn.org can appeal to Democrats thematically on this issue, but sensible legislators abandon them when they learn the facts.
Network neutrality proponents do have an apparently appealing message?they want to save the Internet. But just beneath the slogan is an aggressively pro-regulatory agenda that could deter needed infrastructure investment and ultimately end in government management and ownership of the Internet. And whether government control is national (the folks that bring us the IRS) or state (the folks that bring us the DMV), it?s bad news for Internet users.
On Nov. 19, 2002, a number of Internet content companies wrote a letter to the Federal Communication Commission warning that telephone and cable companies would block users from accessing their sites, destroying the Internet, without a regime of mandated network neutrality, meaning that all the data passing through a company?s network has to be treated the same way. In the nearly five years since there have been no noteworthy instances of such blocking, but the heated rhetoric about the end of the Internet intensified.
Ironically, the calls for government regulation to save the Internet may actually be deterring infrastructure investments the Internet needs to continue functioning well. That?s because network neutrality requirements, depending on how strictly the concept is implemented, could prevent infrastructure companies from having any control over the data traveling across their networks. That means allowing teenagers using massive amounts of peer-to-peer bandwidth for trading stolen video games to crowding out customers who need high-quality bandwidth for video conferencing, telemedicine or other next-generation services.
Some infrastructure companies would like to offer premium tiers with quality of service guarantees on their networks, so they can have multiple revenue sources to justify their infrastructure investments. The possibility of strict network neutrality requirements makes some of those investments, sorely needed as Internet traffic continues to skyrocket, less viable.
Supporters of network neutrality legislation are more focused on competition at the content and application layers, which is an important consideration. But given the lack of any actual incidents of anti-competitive behavior at those layers, we should not lose sight of the importance of protecting and encouraging investment in the physical layer, the actual billion dollar networks that must continue to be built and upgraded. Some network neutrality proponents openly admit the rules would lead to underinvesting in infrastructure, and call for government subsidization or outright ownership. If the mandates are onerous enough, that would be their inevitable implication.
Even proponents of federal network neutrality requirements shouldsee the fundamental flaw in the proposal for action on the state level, such as the recently withdrawn Maryland legislation. Internet transport is clearly under federal jurisdiction, both because it is an information service and because it is interstate. Any attempt to regulate at the state level would, while ultimately destined to be struck down in court, create a regulatory regime in just one state that is inhospitable to infrastructure investments, meaning that the best and newest network technologies will be deployed elsewhere.
Maryland legislators got beyond the sloganeering and weighed the real arguments, which is why they decisively rejected network neutrality legislation, serving as a valuable example for other states that may be considering similar bills. Network neutrality mandates would be a mistake on any level of government. But at the state level they are simply indefensible.
Phil Kerpen is policy director for Americans for Prosperity.
