A Neutral Panic

Why there's no need for new laws to keep the Internet open


Take heed, unsuspecting Web surfer, for the end times are upon us! Lo, your Internet Service Provider shall open the sixth seal, and the moon shall be as blood; and there shall be voices and thunderings and excessive white noise on your VoIP phone; and Google shall be devoured by locusts—or at least load really, really slowly.

Such, at any rate, is the impression you'd get listening to some of the overheated rhetoric issuing from proponents of network neutrality. Net neutrality, sometimes referred to as the end-to-end principle, is the idea that the Internet is built on "dumb pipes": The intelligence in the network is on the edges—in your personal computer, say—while the network itself acts as a passive, indiscriminate content for whatever information gets sent across it. The Internet, on this model, is Switzerland: It doesn't care—or, indeed, pay much attention to—whether you're sending voice traffic, streaming movies, or just sending an e-mail to Aunt Hortense. Your bits don't fly over the wire any faster or slower if you're downloading movies from iTunes than if you're watching the latest episode of Strong Bad Email.

But Internet Service Providers (ISPs) are interested in changing that—either by charging more for certain kinds of traffic, or by getting high-traffic Web sites themselves to pony up for a guarantee of higher-speed connections to readers and consumers—and tech cognoscenti are in an uproar.

"Nothing less than the future of the Internet is at stake," Internet pioneer Vint Cerf, co-author of the TCP/IP protocol on which the Net runs, told Congress earlier this year, calling for legislation to require ISPs to judge datastreams by the quantity of their bits rather than the content of their characters. Rep Ed Markey (D-Mass), who proposed an unsuccessful telecom amendment last week to do just that, issued an impassioned and alliterative warning that provision in the telecom bill that would guarantee ISPs more latitude "imperils the future of electronic commerce and innovation to the 'world wide whims' of broadband barons." In a recent New Yorker column championing a neutrality bill proposed by Sen. Ron Wyden (D-Ore.), James Surowiecki lamented that "Decisions that once were made collectively by hundreds of millions of Internet users would now be shaped in large part by a handful of telecom executives….With the end of network neutrality, the middlemen are striking back." A relatively sedate and professorial Lawrence Lessig cautioned Congress that abandoning Net neutrality would "inevitably weaken application competition on the Internet, and that in turn will weaken Internet growth," while a recent headline on the popular lefty blog MyDD screamed "The Right-wing Seeks to Take Your Internet."

Let's take a nice deep breath, shall we? The best argument for mandating network neutrality is that almost nobody wants to go back to the Bad Old Media Days where high communications costs raise high barriers to innovation and a few media conglomerates monopolize our passive eyeballs. The best argument against mandating network neutrality is that almost nobody wants to go back to the Bad Old Media Days where high communications costs raise high barriers to innovation and a few media conglomerates monopolize our passive eyeballs. Even in areas currently served by a DSL/cable broadband duopoly, consumers accustomed to a smorgasbord of online options will check to some extent the ability of ISPs to restrict user access to innovative content and applications.

If that duopoly were a given, though—a permanent fact about how we connect to the Internet—the case for mandating net neutrality would be much stronger. But while some academics believe that even in a competitive market, ISPs would have ample incentive to attempt to extract rents through net discrimination, most net neutrality proponents stress the relatively captive markets local cable and DSL providers enjoy. Yet there are a wide range of looming alternatives to the Big Two (or, more accurately, many local moderately-sized twos): free space optics cellular broadband, broadband over power lines, WiMAX, and satellite broadband, to name a few. And ironically, encouraging the emergence of those alternative broadband venues may depend on not mandating net neutrality.

In most other media markets, we find a mix of funding sources for content. You may subscribe to a basic cable package where most of the channels are primarily advertising-supported, whereas other content is paid for by religious groups or nonprofits eager to get their message out, and still other channels (say, HBO) provide commercial-free programming at a premium price. The effect of mandating net neutrality is, in essence, to fix the proportion of the price of the pipes that's borne by consumers. As professor Lawrence Lessig observes in his Congressional testimony, nobody objects to "consumer tiering," wherein someone who only needs to send a few e-mails and occasionally read Reason Online buys a cheap dialup package, while those who want their Net full of bells and whistles spring for high-speed cable. And, for that matter, nobody seems to see a problem with an equally common kind of content tiering, where the consumer pays one price for Internet access, and another for high-quality video programming, perhaps even coming in over the same pipes. Mandatory net-neutrality removes from the basket of options another way of mixing funding, where the user pays for most of his Internet access at one speed, but content providers subsidize a faster pipe for their own bandwidth-intensive content. That kind of funding mix could help make existing broadband cheaper for those who remain on the wrong side of the "digital divide," or it could help make the business models of alternative wireless providers viable faster. But we won't know if we forbid experimentation now.

Vanderbilt law professor Christopher Yoo has also argued that network "discrimination" could help manage traffic on both existing and future networks, and that "contrary to the suggestions of network neutrality proponents, allowing some restrictions on end users' ability to access content, run applications, and attach devices may in fact be welfare enhancing." On current wired broadband networks, under the common system of flat rate pricing, we've discovered that the demand for bandwith will expand to fill the available pipes—a problem, since heavy use by a few slows down the network for others in the neighborhood. At present, low-traffic users frequently subsidize compulsive downloaders. Some ISPs have responded by implementing bandwidth caps or experimenting with metered, pay-by-the-bit broadband. But where metering is impractical or expensive, Yoo suggests, a handy proxy might be to allow ISPs to charge an additional fee for users who want to connect certain devices to their modems, such as a WiFi routers, which allow many users to make use of a single connection—and more of the locally available bandwidth.

In his call for net-neutral legislation, The New Yorker's Surowiecki recognizes that in some cases, "discrimination" may allow ISPs to add faster lanes than they currently offer, at least for content companies willing to subsidize them. "But if some companies are getting better service," Surowiecki complains, "then all the others are getting worse service." That's a Harrison Bergeron conception of neutrality, in which far from calling for equality as a promoter of innovation, innovation is sacrificed to equality.

It's true, of course, that ISPs could misuse their control of the onramps to the Internet in a shortsighted attempt to extract monopoly rents, rather than benefit consumers. But that's not a reason for preemptive regulation; it's a reason to see what happens. "In my view," said then–Federal Communications Commission Chair Michael Powell after blocking one local telephone/broadband provider's attempt to cut users off from Internet telephone services, "the surest way to preserve 'Net Freedom' is to handle these issues in an enforcement context where hypothetical worriers give way to concrete facts and, as we have shown today, real solutions." That's sound advice: Hasty regulation that responds to hypothetical abuses may also prevent us from discovering benefits we haven't yet hypothesized.