Do We Want a Neutral Net?

On April 6, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the Federal Communications Commission lacked the authority to regulate cable giant Comcast’s internet service. The verdict was the fallout from a long series of FCC rulings regarding Comcast’s policies towards customers it considers “excessive” users of broadband internet. The court’s decision is widely interpreted as deep-sixing the FCC’s recent drive towards requiring net neutrality and other new regulations for internet providers.

The ruling has been either cheered or jeered largely along partisan lines; National Review and the Washington Examiner’s redoubtable Michael Barone both supported the court, citing industry concerns of overregulation as stifling innovation and leading to bandwidth congestion. On the other side, Salon’s Jenn Kepka called for congressional action to overturn the ruling, fearing the potential of ISPs blocking political or commercial sites they disagree with.

While I suspect Kepka’s particular concern is overblown — the surest way for a company to find itself under an immense wave of public and governmental pressure would be to act as a speech censor — other left-of-center commenters like Mother Jones’ Kevin Drum have a legitimate point when noting that “open internet has worked pretty well” to date. The ISPs want to charge "heavy user fees" to big services like Google and Hulu (and presumably even small video providers like, say, PJTV), and one suspects such charges would result in fewer innovative new companies being formed in the future. And none of the above even touches on the lack of serious pricing competition in the American broadband market.

The problem here is, just about everybody has a good point or two, but neither the law nor the market has a seamless answer to: “What’s the best way to do this?”

To borrow a now hoary metaphor from Ted Stephens, broadband service requires large tubes, at least relative to the days of slow dial-up service. Most of those tubes are owned by large corporations — cable TV and phone companies. The fortunate side of that equation is that even before the internet era dawned in the mid-90’s, almost every home in the country was wired for phone service, and most of them were wired for cable. While it wasn’t as easy (or cheap) as simply plugging in a modem, getting from the black rotary phone or analog cable TV to high-speed internet did not require entirely new technologies and infrastructure to be built out, and fast access spread like wildfire to most of the country.

The downside was, well, that infrastructure belonged to cable and phone companies, both of which had spent decades as monopoly operators thanks to exclusive agreements with the feds, the states, and municipalities. This status did not exactly breed a bias towards customer service or competitive pricing. As a Wired profile of Comcast, the nation’s largest cable company, put it:

[T]here's something about the business that makes executives a little blasè about consumer complaints. They've been lambasted for so long, they just don't hear it anymore. Brian's father, perpetually bow-tied 88-year-old Ralph, started Comcast in the early 1960s. Programming cost nothing — he simply took broadcast signals and piped them to homes. Government regulation (unlike for broadcast television) was nonexistent. And expansion was just a matter of finding more towns to wire. Customers complained about price and service — but they never cut the cord. "It's the greatest thing since stealing," one of Ralph's first employees told his friends.

That’s not too different from the attitudes of the old Ma Bell or her post-1982 offspring (as Lily Tomlin put it, “We’re the Phone Company. We don’t care. We don’t have to”). Now that they are ISPs in addition to TV or telephone providers, the cablers and telcos still act like monopoly incumbents, charging more and more every year with only minimal improvements in quality. Customer service horror stories are rampant; nobody looks forward to calling either side of their local broadband duopoly when they have a problem.