Last week, the Federal Communications Commission voted along party lines to regulate the Internet as a public utility, upholding the principle of "Net Neutrality” and thereby ensuring that the internet won’t become a sleek autobahn for well-heeled content providers and a goat path for everyone else. How you feel about this ruling falls generally along three possible responses.
The optimist’s view: The FCC’s ruling represents a victory for grassroots activists who demanded free and unfettered access to the internet. It was a rare, welcome victory for the “little guy” over broadband providers such as AT&T, Comcast, and Verizon, who wanted to turn the internet into a pay-for-play cash machine. This quote from Even Greer, campaign director for the activist group Fight the Future, in a recent New York Times article sums up the optimist's view:
“This [ruling] shows that the Internet has changed the rules of what can be accomplished in Washington.”
The pessimists view: The FCC’s ruling was the result of corporate pressure applied by such behemoths as Amazon, Facebook, Google, and Microsoft, the interests of which just happened to align with those of the little guys. If Net Neutrality didn’t stand to directly impact the bottom lines of these large corporations, they wouldn’t have thrown their lobbying muscle behind it, and the principle might have been as dead as fried chicken. This view is perhaps best summed up by Gawker’s Alex Pareene:
“We have net neutrality for the same reason that copyright terms will be extended indefinitely forever and the Defense Department will keep being forced to buy incredibly expensive planes that don't actually work: Because a large industry had a strong opinion on the subject.”
The libertarian view: The internet isn't broken, and the FCC’s ruling represents unconscionable government meddling in free enterprise that will stifle innovation and harm consumers. This statement from Jim Cicconi, AT&T’s Senior Executive Vice President-External and Legislative Affairs, sums up the libertarian view:
“We will hope that other voices of reason will emerge, voices who recognize that animosity, exaggeration, demonization and fear-mongering are not a basis on which to make wise national policies.”
Rule of thumb: Whenever one side of a debate accuses the other side of “demonization and fear-mongering,” you may rest assured that the accusers are fully aware that their position is untenable. That the libertarian view is suspect should be obvious. Given that the vast majority of American consumers have only a single choice of broadband providers, and that the United States has fallen behind other developed countries in both broadband speed and affordability, lack of regulation has demonstrably not resulted in more innovation and choice for consumers. If anything, the ruling will force broadband providers to actually compete for consumers on features and price, rather than extort content providers for access to the fast lane.
But whither the broadband companies? Will Title II enforcement, a rule that was designed to regulate Ma Bell back in horse-and-buggy times, really stifle innovation and turn the internet into the connected equivalent of an IRS audit? Typical of the naysayers is this May 2014 piece by Anna-Maria Kovacs, which argues that, because the smart phone killed home phone service, which is regulated, so too will regulation kill the internet. Money quote:
“Consumers are fleeing [home phone service] in droves. In 1996, when they had no other choice, 94 percent of American households relied on [the home phone] as their sole means of telecommunications. Today, fewer than 5 percent do so. That is not surprising. There are things regulators do well, but innovation is not one of them…regulations that were designed for a rotary phone connected to a 64 kilobit switched-access line would be disastrous.”
But no one is expecting the FCC to enforce Title II down the line—FCC chairman Tom Wheeler is already on record as stating that the commission won’t regulate prices, for example. Kovacs argues that deregulation has spurred broadband investment, and that US consumers thus enjoy superior connectivity to, say, those unrepentant socialists in Europe. It may be true that the US has invested more heavily in broadband, but that investment hasn’t resulted in lower prices or faster speeds for consumers; quite the opposite. As this New York Times piece points out:
“Downloading a high-definition movie takes about seven seconds in Seoul, Hong Kong, Tokyo, Zurich, Bucharest and Paris, and people pay as little as $30 a month for that connection. In Los Angeles, New York and Washington, downloading the same movie takes 1.4 minutes for people with the fastest Internet available, and they pay $300 a month for the privilege...”
What deregulation has spurred is high prices, lack of choice, and rampant consolidation. Does Kovacs or any other broadband apologist really believe that the proposed merger between Comcast and Time Warner, for example, will result in anything other than higher prices and poorer service? Absent regulation, Comcast is already arguably the most hated corporation in the country. Will overturning the FCC’s ruling suddenly turn them into Apple?
So am I an optimist on net neutrality, or a pessimist? The truth certainly lies in the middle. No one believes that, in supporting the FCC's ruling, Amazon, Facebook, and Google have anything but their own selfish interests in mind. Did the lobbying efforts of these giant corporations turn the tide for Net Neutrality? Of course. In other news, the sun rose today. But we can’t simply dismiss the impact of those four million people who petitioned the FCC in favor of neutrality. President Obama heard them, at least, which is why he voiced support for the principle prior to the vote.
No one will ever accuse Amazon, Google, and Facebook of altruism. It’s helpful to remember, however, that even these gargantuan corporations were once themselves scrappy upstarts that prospered precisely because they enjoyed unfettered access to the interwebs. By enshrining Net Neutrality as the law of the land, the FCC is ensuring that the next Google enjoys the same advantages as the current one.
Still, Net Neutrality advocates can hardly rest on their laurels. The FCC has yet to propose remedies for the broadband industry; toothless enforcement is still possible. Republican legislators are already crafting legislation designed to block the ruling. And the issue will soon fall to the courts, as broadband providers sue the government to prevent enforcement of the ruling. It therefore remains vitally important that those millions of voices continue to be heard on this issue. The internet is a public trust, as crucial to commerce in this century as the interstate highway system was to commerce in the last one. In this instance, I’ll stand with the optimists.
Rick Ferguson is the author of The Chronicles of Elberon fantasy trilogy. Rick is also a globally recognized marketing expert with appearances in the New York Times, Wall Street Journal, Advertising Age, Fast Company, the Globe & Mail Canada, the Guardian UK, the Financial Times India, MSNBC, and the Fox Business Channel. He has delivered keynote speeches on marketing principles and best practices on six continents. He is also master of time, space, and dimension.