Everyone pays for demands of the few
If it’s fair that consumers who use more broadband pay more, then it also seems fair that Internet content providers that use more bandwidth should shoulder a bigger share of the costs of the Internet. “What’s been suggested in the business models is that the very large, high bandwidth customers—the Amazons, the
e-Bays, the Googles—would pay a premium price for guaranteed quality of service. That would be reflected in their pricing models for what they charge their customers,” Mayo says.
But such distinctions would not be permitted under the proposed Internet regulation laws. “The notion of net neutrality would really mandate that the consumers—the end users— would end up being responsible for the entire cost of their Internet connection,” says Altschul. “But there is another model, 800 telephone service, where the business enterprise is so interested in getting consumers to come to them that they pay for the service. I guess that’s a form of discrimination against those companies that don’t have an 800 number, but nobody objects to that.
“Internet regulation would eliminate that kind of two-sided market for Internet access where companies like Google—through the money they collect from advertisers—could absorb end users’ costs in reaching them,” Altschul continues. This is the model that newspaper companies use, where end users pay
a small fee and the rest of the expense is borne by advertisers who pay a fee to reach them.
“Were they to be enacted, these so-called net neutrality laws would forever foreclose the opportunity for consumers to have some or all of the costs of their Internet access paid by others,” Altschul says.
Emotional response could lead to unintended consequences
Opponents of Internet regulation acknowledge that the concept of net neutrality has a visceral appeal. “To be non-neutral means to be biased, and people don’t like the concept of being biased. But you have to be cautious in moving from this rhetorically appealing term to what is actually being debated,” says Mayo.
While some Internet regulation advocates argue about free speech issues—even though they admit that there has been no real example of censorship—they ignore the negative economic consequences that net neutrality would have on innovation in the wireless and wireline industries.
“My dismay over net neutrality is that it has become so political and so emotional that people aren’t doing their homework,” comments Spiwak. “They are checking their intelligence at the door. They are not thinking about this in a cohesive way. They talk about net neutrality as a political and free speech issue. Those are nice platitudes, but let’s think about this a little harder. “I view the telecom market as almost fragile,” he continues. “Firms don’t have to be in this business. They can merge or decide to spin off assets to get out. They don’t have to put investments into the market. Firms will only do something if they think they will make money. These are things that people aren’t thinking about.”
The Myth of Net Neutrality
At constantly falling prices, wireless consumers enjoy better products and services everyday. So-called "net neutrality" legislation would stifle the innovation and competition that has made it all possible. Two experts uncover the truth behind the misleading term "net neutrality" and describe how it would harm the wireless consumer.
