In an attempt to illuminate potential deficiencies of net neutrality legislation, US Representative Charles Gonzalez (D-TX) has proposed a telecommunications bill amendment that would extend the concept of net neutrality to search engines and commercial web sites like Google and eBay, forbidding them from engaging in discriminatory practices. A critic of net neutrality legislation, Gonzales argues that net neutrality would lead to "massive federal regulation by mandating conditions on how the Internet will evolve."
Under the terms of the proposed amendment, content providers would not be permitted to deny services to users engaged in lawful activity, form exclusive deals with other companies, or offer special services for users that are willing to pay more money. Many business practices widely used by content providers and commercial web sites constitute a violation of the Gonzales amendment. For example, if the Gonzales amendment were to become the basis for future FCC regulatory standards, Ars would no longer be permitted to provide additional services for subscribers, or ban forum users that misbehave. Authored in a puerile attempt to satirize net neutrality advocacy, the amendment was not intended seriously. Although the amendment illuminates the destructive potential of Internet regulation, the author completely ignores the relevant distinctions that separate content providers from ISPs.
The market for commercial web sites, search engines, and web based content providers is extremely competitive and diverse. By comparison, the broadband market is virtually dominated by one or two major providers in each region, so consumers rarely have the ability to cancel their broadband subscription and switch to a competing ISP if they are dissatisfied with the quality of their service. In a truly competitive broadband market, ISPs would be afraid to cripple connectivity with a tiered model, because their customers would simply move to an ISP that doesn’t engage in discriminatory practices.
It is also important to remember that ISPs benefit from enormous public subsidies that should imply an obligation to perpetuate the neutrality of their services. Despite the fact that the telecommunications companies promised to make 45 mbps fiber-optic connections available to at least 86 million households by 2006 in exchange for approximately US$200 billion in subsidies and financial perks, American broadband services are vastly inferior and significantly more expensive than broadband services in a number of other developed countries. When you consider the obscene amount of taxpayer money that went into AT&T’s infrastructure, it becomes clear that the company’s pipes ought to belong to the American people, not Ed Whitacre.
As a critic of government intervention, I generally dislike attempts to regulate industry. When the government dictates terms to businesses, the consequences are often more detrimental than the risks of allowing companies to operate unimpeded. For that reason, I might be able to sympathize with critics of net neutrality under different circumstances. In this case, however, criticism of government intervention is no longer timely or relevant. Conservative think tanks that oppose net neutrality on the basis of regulatory concerns should have considered the negative implications and spoken up when the government decided to give our money to the telecommunications companies. Now that it has been done, the government needs to follow through and ensure that the pipes that were bought and paid for in part with taxpayer dollars are made available to the public under neutral terms without anti-competitive stipulations.
The Gonzales amendment is disingenuous and counter-productive. It ignores the reality of the broadband monopoly and it disregards the intimate relationship between industry and government that helped establish it.