Choking off innovation

Net neutrality. You've heard the term, but what exactly does it mean to broadcasters? The debate is focused on whether laws and regulation should dictate if data networks remain open to innovation or if they should be relegated to being just dumb broadband pipes.

As the Internet explodes with new demand for video, HD, games and other content, broadcasters are starting to find themselves as eagerly sought providers for much of that content. Weather, traffic, news, local happenings — all video content TV stations generate every day is increasingly desired by viewers from their desktops, laptops and mobile devices.

However, under the banner of net neutrality, the broadband service providers delivering that content are being targeted with additional government regulation. Given the government's record for screwing things up, let's consider what might happen to the Internet's QoS if Congress or federal regulators become involved.

The Internet is composed of three layers: content, applications and service. Broadcasters are involved in each of these three layers. Currently there is competition in each of the layers. Net neutrality would reduce, or possibly even prevent, competition in the service layer.

Net neutrality can loosely be considered as access rights to the Internet, or simply broadband connectivity. Neutrality proponents consider access to the Internet as almost a constitutional guarantee, rather than simply a purchased service. Users could agree that, historically, the Internet's openness has been good for its development. However, today's question is whether regulated broadband — which is what net neutrality really is — will help or hinder the development of a more featured and higher speed connectivity to support new broadcast services.

A basic claim of neutrality proponents is that there are insufficient last-mile providers, and without government intervention, those providers could choke off access to the other two layers of the Internet (i.e. content and applications). The service providers, not surprisingly, see things differently. They perceive harmful effects from new regulations. For them, the challenge is how to finance the development of new services and delivery systems while being prohibited from building vertical monopolies within the Internet's application and content layers. Service providers believe that it's not unreasonable to charge for what's consumed. Their philosophy: If you use more, you should pay more.

From here, it seems the greatest risk from implementing net neutrality is the forced commoditization of our broadband infrastructure. Such regulation will bring connectivity down to the lowest common denominator. Without the ability to experiment with new and different types of services, broadband vendors have no incentive to improve their networks. If regulations require that every pipe carry 10Mb/s and cost $15 a month, no vendor has the financial incentive to develop a 100Mb/s pipe complete with a walled garden of features, videos and information.

Another regulatory issue should be considered. Don't for a minute think that if Congress gets involved, it would stop with just regulating connectivity issues (e.g. the size of pipes). Price and guaranteed access could be next. Supply and demand issues, such as Internet access, cannot be solved with government regulations. Anyone remember the old AT&T? For 20 years, you could have any color phone you wanted as long as it was black. AT&T was heavily regulated.

Net neutrality is not the panacea proponents claim. Rather, it's a roadblock to the development of new services and features. Let broadband suppliers innovate and develop new services. The marketplace — not the government — should decide which of these offerings will survive.

Broadcasters need low-cost, high-speed connectivity into viewers' homes. Unfortunately, net neutrality will choke off the innovation needed to make that happen.

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