Thursday, February 20, 2014

Should Net Neutrality Be Regulated?

The recent acquisition effort for Time Warner Cable by Comcast coupled with the ruling that struck down net neutrality raised the question whether regulation on internet streaming should exist or not.  In one corner are those that argue that all content, regardless of size, should be granted equal speed to bring their content to the home.  Others believe that an open economy means that broadband pipe owners, like Comcast and Verizon, should be able to charge companies for faster streaming.  In such a case, they could force companies like Netflix to pay more to get their heavy data files through the pipe to the home without any slowdown.  The worry is that such an unregulated environment raises costs that ultimately passes through to the consumer and that it creates barriers to entry for newer entrant with heavy data requirements to get in front of the consumer. 

Their is rationale arguments on both sides of net neutrality.  "Broadband players like Verizon and Time Warner Cable have spent billions of dollars upgrading their infrastructure, and they argue that they should manage their networks as they like."  As streaming use grows, the demand on this infrastructure could lead to traffic jams without the added revenue to continue to invest in it.  On the other side, "“Preserving the Internet as an open platform for innovation and expression while providing certainty and predictability in the marketplace is an important responsibility of this agency,” Mr. (Tom) Wheeler (head of the FCC) said in a statement." 

I see a different path.  I am not a fan of net neutrality regulation and believe that Broadband companies should be free to charge for preferential access.  But I also believe that the FCC should do more to encourage other companies to enter into the broadband space to offer more competition to cable and the telcos.  That means opening up new bandwidth and helping companies like a Lightsquared to provide alternative broadband services.  Innovation can arise through competition not net neutrality rules.  And innovation comes when new mousetraps are built that change our traditional ways of doing things.  Faster streams, new means to transmit, new ideas; it is the entrepreneurial efforts of our economy that are the real solution.  

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