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Press Release

    Does Net Neutrality Help Consumers?

    06/19/2006

    this oped originally ran in The Washington Examiner.

    Google and other high-tech giants are pressing Congress for greater federal control over the Internet in the name of "net neutrality," a vague concept purportedly required to keep the Internet open for consumers, content and applications.

    Yet looking at what net neutrality means in practice, this renowned leader in innovation is, in essence, calling for a "freeze" in technology. While protecting its own freedom, Google would forbid broadband providers from developing new technologies and services to bring consumers more valued and interesting content.

    Their arguments rely on risible claims that broadband providers are monopolists who will limit access to the Net in pursuit of profits.

    Yet in today's market, the pipes are competitive and can only make money providing consumers what they want: unbridled access to content.

    There is little evidence of broadband providers restricting access to the Internet; should a problem emerge, it could readily be addressed using existing law. Perhaps the most notorious case of blocking has been not by broadband providers, but by Google itself, who voluntarily censored Internet access to enter the lucrative Chinese market.

    Today’s Internet strains to keep up with the massive amounts of data businesses and consumers send through the pipes. The "killer applications" in the wings involve gaming, streaming videos and peer-to-peer activities that need a stable environment and a wide-open highway. Quality-of-service problems may not have been an issue when the Internet was devoted to sending and reassembling the packets of data that comprise e-mail, but today's content and applications put new demands on an old network.

    Although Google has recruited left-leaning consumers groups to add a patina of consumer protection, it must be remembered that Google is a very large business.

    That its interests coincide with those of the consumer is not obvious. Google has no qualms forcing almost all charges on end users, sparing itself and other content and application providers from costs they place on the system.

    Vint Cerf, Google's vice president and Internet evangelist, said as much to Congress: "The broadband carriers are fully compensated by their residential customers for their use of the network. These companies can charge their own customers whatever they want, in order to make back their investments." Does evangelist Cerf expect an "amen" from consumers on this point?

    If competition is a concern, Congress should focus on freeing up the last mile to increase consumer access. Encourage video franchising to provide incentives to upgrade and expand high-speed networks. Re-deploy wasted spectrum that could be used to provide additional avenues to reach consumers.

    By contrast, granting the FCC authority to regulate a nebulous standard of net neutrality does virtually nothing to address last-mile issues that could limit consumer access to the Web.

    Ultimately, there are two ways to allocate resources, either through a central authority or through the dispersed knowledge of all the producers and consumers in the market.

    Net neutrality proponents are turning the Internet over to FCC regulators, opting for central planning -- a model hardly proved effective for allocating resources efficiently.

    The alternative is to rely on the dynamics of the market, which coordinates the activities of individuals throughout the economy, alerting producers to shortages and surpluses while helping consumers express their demand for various goods and services. This coordination occurs spontaneously, without oversight of a central authority, allowing participants to take advantage of local knowledge and adapt to new exigencies while finding new and more efficient ways to do things.

    Net neutrality, shrouded in a populist cry for freedom, is the first step toward greater government control over the Internet that, ironically, may limit consumer access. Regulating the pipes could chase away investors otherwise willing to build the networks of the future.

    Washington should clear the path for innovations and expansions, not shutting off the ability to attract interest in such projects through a new layer of regulation and government oversight.

    Dr. Wayne Brough is the vice president for research at FreedomWorks.com.