Wednesday, August 3, 2005 - The Progress & Freedom Foundation Blog

The Promise and Peril of the FCC's DSL Action

Tomorrow's (now moved to Friday) FCC meeting promises action by the Commission to equalize the regulatory burdens between cable and DSL broadband platforms in the wake of the Brand X case. Right now, cable broadband has a relatively more free and unregulated platform compared to the more heavily regulated DSL platform, with its common carrier regulation legacy.

To his credit, Chairman Martin is moving with dispatch to correct this inequity between cable and DSL, and using the pro-market principle of "deregulate down" instead of "regulate up" to achieve equity. The move, then, is to be applauded for helping keep broadband competition equitable and vibrant.

The peril arises because of the Chairman's lack of a working majority on the Commission. Accomplished rentseekers are again pushing for a net neutrality mandate to accompany any DSL broadband freedom. Such a mandate would be a calamitous step toward more plenary regulation of broadband, and furthermore limit the attractiveness of broadband investment. The rule would commoditize network owners at the expense of content and application owners, which is of course part of the point of net neutrality. It would likewise handicap broadband providers from being able to engage in consumer beneficial price differentiation, which again is the point of such a rule.

My worry is that the third vote for DSL freedom will have to be bought for the high price of a net neutrality requirement (or, something less, a legally ambiguous "guideline"). Unregulated equity, yes; regulated antidiscrimination mandates, no.

posted by Ray Gifford @ 6:12 PM | Broadband