Wednesday, December 21, 2005 - The Progress & Freedom Foundation Blog

This Consumer Chooses Choice

Yesterday afternoon I saw a quote in a news story by a former co-worker I've long known and respected. He made a baffling claim, namely that broadband providers that might look to offer premium tiers of high-speed content to their customers are "fooling around with the basic DNA of the Internet." This individual knows full well that the basic DNA of the Internet is a decentralized combination of interconnected networks all running on the same transfer protocol. No service or special feature offered by a broadband ISP on its particular connection will change that. What could change the basic DNA of the Internet is government regulations, and that is what my former co-worker and others are calling for.

The issue is called "net neutrality," but in this case the neutrality they want is a race to the bottom. There are significant property rights and other issues in this debate, as we've written and discussed here and here and here and here. But I'd add that this seems to be another case where self-appointed consumer groups aren't thinking of how consumers might actually benefit in a marketplace of competing ISPs with differing enhanced services.

Over on the IPCentral blog I often write about the importance of a market of digital content, offered at differing price points with varying rights accompanying that content. I want the market to determine those price points and rights, not the government. I'm kindly asking my friends at these "consumer groups" to allow the same market to develop in broadband.

It is insulting to me as a consumer to hear that I am incapable of choosing a broadband service provider based on differentiated offerings. If one wants to give me faster streams of video content based on licensing agreements it's reached with the content providers, and another wants to aggressively cache certain e-commerce sites I frequent to allow for faster web shopping, that's all good to me. I want to live in that world; I don't want to live in a world where broadband providers are all forced to provide exactly the same service with no differentiation other than speed and price.

Legislating against this market diversity will deter new entrants, whereas a continued absence of government regulation and meddling will open the door for new broadband providers looking to fill a niche they see as unserved. Perhaps it would be as a dumb, neutral pipe at lower cost. That would seem to be a smart business strategy if all of the existing broadband providers are differentiating their service, and presumably charging more for that enhanced service.

We could live in a world where Internet is provided by our local government, and is offered at a fixed fee and speed with no enhancements or special features or content. Or we could live in a world where increasing numbers of broadband providers experiment to find the right combination of price, speed and special features to entice the most customers. In the former world, there's no incentive for network upgrading. In the latter world, positive change comes to the market as often as the latest iPod.

I'd like to live in the latter world, please.

posted by Patrick Ross @ 3:03 PM | Net Neutrality