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Monday, March 13, 2006

"The Eden Illusion"
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The Washington Post is the latest newspaper to editorialize on net neutrality in the context of the AT&T-BellSouth merger, and like the Rocky Mountain News, the paper's editorial writers seem to "get" the issue. First, they recognize that the Ma Bell argument against the merger makes no sense when landline phone service faces such competition. But most of the editorial addresses net neutrality, dismissing net neutrality proponents who pine for a blissful "Eden" of egalitarianism and non-commercialism:

The proponents of net neutrality exaggerate the purity of cyberspace. Big names on the Web already have a huge advantage over no-brand competitors: Surfers go to places that they trust, particularly to make credit-card purchases. Moreover, once you have an advantage on the Web, it becomes self-reinforcing: If your site is popular and many others link to it, search engines such as Google will direct more traffic your way... Meanwhile, big e-tailers have accelerated their service by paying to "cache" their Web pages on computers close to customers. So if cable and phone companies start delivering some Web content at premium speeds, they will be adding to an existing trend, not sullying Eden.

The paper also recognizes the economic issues involved in a network buildout:

The proponents of net neutrality also understate the costs of regulation. If cable and phone companies are not allowed to charge Internet firms for fast delivery, they will be deprived of one source of profits. This will make it harder to raise capital to build the next generation of superfast Internet pipes, capable of delivering high-quality video. Moreover, any definition of net neutrality is likely to be contested in the courts, and legal uncertainty will further deter investment. As a result, net neutrality could end up meaning that all Web services get delivered at a similar but relatively slow rate.

The editorial says Wyden's proposed legislation to impose net neutrality should stay just that, a proposal, and like DACA, recognizes the danger of ex ante regulation:

If the cable and phone companies start blocking out chunks of the Web's content, there will be opportunities for Congress to weigh in. But it's hard to see how these firms can expect to win extra subscribers by doing that.

I suspect some of my colleagues would not usually consider The Washington Post to be a voice of reason, but it was this morning.

posted by Patrick Ross @ 9:42 AM | Broadband , Communications , DACA , E-commerce , Internet , Net Neutrality

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