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Environment, Science and Technology
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Posted May 6, 2008
ISP Regulation

Statement of Cord Blomquist by Technology Policy Analyst, Competitive Enterprise Institute

Washington, D.C. —Today the House Subcommittee on Telecommunications and Internet will hold a hearing on the Internet Freedom Preservation Act of 2008 (H.R. 5353), introduced by Rep. Ed Markey (D-MA). This legislation would impose network neutrality regulation on all Internet Service Providers (ISPs). Proponents of the legislation believe that neutrality regulation is necessary in order to prevent ISPs from blocking websites and other Internet-based services—becoming de facto censorship boards for new media. However, in attempting to prevent this unlikely nightmare scenario, advocates of this regulation risk denying ISPs the tools needed to manage the traffic of tomorrow’s Internet.

Supporters of neutrality regulation (like Ben Scott of the Washington-based advocacy group Free Press) claim that without new laws, Internet providers will act as “gatekeepers ,” dictating what content consumers may access. Yet these claims make little sense when we consider how little leverage ISPs really have in today’s competitive landscape.

New, broadband-grade wireless offerings like Sprint’s Xohm Wi-Max service and multiple LTE-based networks are bringing new choices to nationwide markets. Franchise reform efforts in several states have allowed more wired connections to reach consumers as well. With more ISP choices than ever before, and numerous bold projects on the horizon, whatever leverage incumbents have now is quickly dwindling.

Neutrality regulation’s supporters underestimate how well the American public understands Internet technology and values the freedom to view what they want online. Bloggers —the citizen journalists of cyberspace—are poised to react to any discriminatory behavior from ISPs. Content portals like YouTube and iTunes also have an overwhelming incentive to reject threats from ISPs to pay-up or suffer degraded service quality.

The increased amount of competition in broadband has shifted power toward content providers and consumers—and ISPs are keenly aware of this. It would be economic suicide for any ISP to engage in tactics of extortion that neutrality-regulation advocates fear. Any such action would incite media uproar and customers would flee in droves to the expanding field of competing broadband options. To say that content discrimination is inevitable, or even likely, betrays how out of touch the pro-regulation side of this debate is with the reality of today’s Internet economy.

But this bill does more than prohibit bad actions that will never happen. It also prevents ISPs from employing sensible network management that is vital for addressing the growing demands of Internet users.

Some ISPs have identified the benefits of curbing bandwidth-intensive applications such as peer-to-peer (P2P) file sharing programs like BitTorrent. In comments filed last month, Bell Canada argued that such curbing is in subscribers’ interests, explaining that 95% of their customers suffer on account of the file sharing of the other 5% of users.

Recent reports lend further credence to claims that P2P traffic is a major culprit behind network congestion. According to AT&T, in three years time, 20 typical households will consume as much bandwidth as the entire Internet does today. Between price increases, bandwidth caps, and protocol discrimination, it is far from clear which course of action to deal with this flood of information will be best for average users. But by abolishing network management techniques that target specific applications, ISPs will have fewer options to deal with overloads.

Freedom to innovate and explore new solutions has been crucial to the Internet’s success—handing over control of private networks to government threatens this freedom. Nearly every regulatory regime suffers from “mission creep,” the tendency of politicians to impose ever-greater restraints and regulations. Deterring unlikely, hypothetical discrimination is hardly a justification for turning over a crucial vehicle of free expression to political control.

CEI is a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government.

© Copyright 2008/Exchange Morning Post/Exchange Business Communications Inc.
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