Just in case you missed some of my Facebook postings on this and topics like it, I thought that I should share with you some further thoughts on a topic that admittedly on its face sounds too abstract and unimportant it us. It is on the Open Internet movement and its importance to all of us.

You probably haven’t paid much attention to it, but maybe you should. It is in the front line of the “future of our choices”. While I am generally a free enterprise guy the fact is that we need standards, rules, and policies of behavior — and an Open and Neutral Internet.

Why is this one of my hot buttons? Net Neutrality is the reason the Internet has driven economic innovation. It protects our right to use any equipment, content, application or service without interference from the network provider. With Net Neutrality, the network’s only job is to move data — not to choose which data to privilege with higher quality service. (The provider of the pipe and not what goes into the pipe — although you can’t blame them for wanting it all.)

The Background

Two of the main arguments against net neutrality regulation are that 1) Internet Service Providers (ISPs) need to manage their networks to optimize performance, and 2) ISPs need to monetize their networks in every way possible so they can get enough revenue to upgrade the last mile connections.

The first argument just doesn’t matter much if the last mile (your connection to the Internet) is the real bottleneck (and it is). No matter which way you look at it, there isn’t much an ISP can do to optimize performance with this bottleneck, so we should be skeptical of ISPs’ claims that their network management will make a big difference for users.

The second argument is that ISPs need to be able to charge everybody fees for everything, so there is maximum incentive for ISPs to build their next-generation networks. If the last mile is the bottleneck, then building new last-mile infrastructure is one of the most important steps that can be taken to improve the Internet and therefore paying off the ISPs to build that infrastructure might seem like a good policy — if you think monopolies work on our behalf. If the market is not going to be competitive, then our policy discussion will have to go beyond the simple “let the market decide” arguments that we hear as well.

The Federal Communications Commission Rules

Enter the Federal Communications Commission (FCC) with its rules to give the commission the authority to step into disputes about how ISPs are managing their networks and to initiate their own investigations if they think ISPs are violating its rules. (Until these rules they had little to no jurisdiction over the Internet). The rules provide for: 1) transparency on their activities (network management practices), policies and pricing. 2) not allow “blocking” of lawful application or services (such as Voice over IP, streaming services, etc.) and 3) no unreasonable discrimination against different types of traffic.

Unfortunately, it seems that the Republican Party has a bone to pick with the FCC and their polices on this. Their logic? “The FCC shouldn’t be enacting any regulation without any market-based analysis to justify it.” Maybe it was just too politically convenient (and motivated) to come out against the admittedly already watered down FCC policy on a neutral Internet under a Democratic Administration.

You might be surprised that it was our own U.S. Rep. Fred Upton, (R-Mich) who lead the charge in the House subcommittee hearing against Network Neutrality earlier this month. They characterized the proposed regulations as a “takeover” of the Internet, urging colleagues to “keep the Internet open and free.” Great spin and sound bite, that in my opinion does just the opposite (for more see these Net Neutrality postings on TechCrunch).

What Net Neutrality does do is keep ISPs from charging extra for content they like or slowing down stuff they don’t (called “no blocking rules”; evidently nobody on the subcommittee heard about Comcast threatening to block Netflix streaming just a couple of months ago or when they decided to throttle its users’ traffic without informing them). The FCC’s new regulations would also require ISPs to spell out the hows and whys of traffic shaping. That alone is a win for consumers. The scare tactics used by those who are (for whatever reason) against Net Neutrality don’t really do their cause any favors.

Now having said that, I don’t have a problem if an ISP wants to charge more for more bandwidth. Why you should pay the same $35 per month when you’re streaming video data when your neighbor only uses his $35 connection to shop online or post funny photos to his Facebook? But I also recognize that same bandwidth isn’t water, and there’s no reason why it should be treated as a scarce resource.

Predictably, the vote ended along party lines; approving a resolution that would block the FCC from adopting its new rules on Net neutrality and protecting us from their predatory practices.

The Bottom Line

The incumbent Internet Service Providers (ISP’s) that the Subcommittee supported are the very groups that just so happen to want anything but a neutral Internet. They want to be able to determine what and how the content and applications that you get and use will be obtained. Can you spell “gate-keeper”?

But should this be a surprise? No, in a free market, companies generally work as hard as they can to make that market not free. Self-interested companies will almost always work to differentiate themselves, to make the playing field unlevel, to create loopholes an barriers that keep the market un-free. It’s what they profit from.

Technological change, enforced transparency and regulation act in favor of consumer protection and against monopolies. There’s no question that an unfettered authoritarian corporate regime is more efficient and effective — in the short run. In the long run, though, the free market triumphs, as long as it isn’t destroyed by those that get to play first. Be careful when the market incumbents lobby to “protect us”.

The fact is that you already pay for that service thru your Internet service bill (to Charter, Comcast, AT&T, Verizon or whomever) and that the content and service providers likewise do as well. We each pay for our own piece. Don’t you want the right to decide between content, applications and services available anywhere, no matter who “owns” the network? Do we really want the “last mile” Internet providers to choose for us — and what do you think that will cost in money, access and innovation?

As an entrepreneur and the founder of more than one Internet-based service company, I can tell you I certainly do not. Even the inventor of the World Wide Web himself (no, it’s not Al Gore), Sir Tim Berners-Lee has taken a stand for that neutrality. We need to as well — and will regret it if we do not. We can not put up any more impediments to innovation than what we already have.