Here’s an article about a report that purports to provide economic analysis of economic benefits if net neutrality is not enforced in the United States:

The debate over the long-term effects of eliminating net neutrality is distinctly emotional. On the one hand, supporters of net neutrality argue that abandoning neutrality would mean the end of the free Internet society. They argue that large broadband access providers in conjunction with a few powerful content providers could use commercial and technological power to dictate the portfolio of content that end users – including consumers and businesses – could access on the Internet, how suppliers could do business over the Internet, and how much they pay for access.

On the other hand, those opposed to making net neutrality part of telecom law counter that the levels of investment required to deploy infrastructure that can cope with bandwidth-hungry applications can be supported only if operators are able to charge for delivery of those services. They also contend that any law enshrining net neutrality would be inappropriate, as government cannot predict how the economy might evolve, and that any restrictive law could have unintended consequences (as in stifling broadband development of broadband applications).

Net Neutrality Dollars and Sense Simon Sherrington | Analyst, Light Reading, 1 May 2006

OK, I’m always suspicious of any “analysis” that tars one side as being “emotional” while characterizing the other side as rationally “figuring”.

The article about the report (which was produced by a paid research service of the organization publishing the article), says ending net neutrality would provide modest gains in income to telecom operators, but those gains would be hard to collect. Or at least that’s what I read the article as saying the report says.

I have not bought the report, for several reasons:

1. While the article says it discusses Canada and Europe, it says nothing about Japan or Korea, which have somehow managed to deploy 100Mbps broadband everywhere at affordable prices, while simultaneously deploying a plethora of new applications to use those speeds. Why can Japan and Korea do it and the U.S. can’t?
2. I see nothing about the period starting in 1994, when the World Wide Web suddenly appeared out of nowhere and many Internet providers complained bitterly that it was a bandwidth hog that didn’t even use the Internet protocols correctly (because Mosaic, the most popular early web browser, opened four TCP connections at the same time and sucked up as much bandwidth as it could get). Yet the web drew in huge numbers of new users and fueled massive expansion of the Internet. Now may be different, but if so such a report needs to say how.
3. The article talks about charging for preferential delivery of content, but it doesn’t say anything about charging for different classes of service regardless of content.
4. If ending net neutrality would produce revenue gains for telcos, how would that balance against lost revenue for application services, and against societal losses of the open communications the Internet provides? Almost all other media in the U.S. are owned by a tiny number of companies; letting the Internet go the same way does not look like a win for freedom of speech or open government. Maybe the report provides such analysis, but if so I can’t tell it from the article.

I do share one of the article’s concerns, however:

government cannot predict how the economy might evolve, and that any restrictive law could have unintended consequences (as in stifling broadband development of broadband applications).

Whenever governments try to legislate technology, they almost always get it wrong. However, it seems to me that the current legal regime in the U.S. is unduly favoring the telcos, who are pressuring government and public to be favored even more. It would be excellent if Congress could come up with a scheme of enforcing net neutrality that does not favor a specific technology, that does require open competition, and that lets the telcos pay for classes of services without picking and choosing specific applications or application providers that they will permit. It’s a tall order, but it’s what I think we need.

I think that because I think ending net neutrality would actually lose more revenue upside for the telcos, lose even more revenue for current and future application providers, and would adversely affect society in general.

I would like to see a report that actually tries to quantify or at least discuss all these issues, but it would have to be a report that takes into account what Japan and Korea have already done, as well as the other points I noted above.

Otherwise, I will probably continue to see ending net neutrality as another way of saying put the telcos in charge of Internet content, and I see that as a big risk for freedom and for business.

-jsq

PS: Wendy Nather found this one.