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Monday, May 22, 2006

Net Neutrality in Lake Wobegon
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Garrison Keiller would say that in Lake Wobegon, "all the women are strong, all the men are good-looking, and all the children are above average." It seems the House Judiciary Committee leadership has the same view of Internet traffic.

The Sensenbrenner net neutrality bill would amend the Clayton Act in some peculiar ways. For example, look at Sec. 28 (b):

If a broadband network provider prioritizes or offers enhanced quality of service to data of a particular type, it must prioritize or offer enhanced quality of service to all data of that type (regardless of the origin or ownership of such data) without imposing a surcharge or other consideration for such prioritization or enhanced quality of service.

My tenth edition of Merriam Webster's Collegiate Dictionary defines "priority" as "the quality or state of being prior" and "superiority in rank, position or privilege" and in particular "one that allocates rights to goods and services usu. in limited supply." Bandwidth is not infinite, as some predicted; any broadband consumer has access only to a finite amount. I can see two scenarios that would benefit an ISP customer with limited bandwidth who wants robust bandwidth-heavy services: (1) a high-bandwidth service (video, for example) pays for priority on an ISP network so the customer gets high-quality, uninterrupted service; or (2) an ISP pays a key content provider (again, let's say video) for priority access to the content to distinguish itself from competing ISPs (as Comcast pays McAfee for security services for its customers, free of charge for those customers, but customers of other ISPs can purchase McAfee software if they like).

The consumer wins in both scenarios with a high-quality bandwidth-heavy service, made possible by prioritization on the ISP's limited network; the only difference is who pays who, and that would shift back and forth based on market demand. Under the Sensenbrenner bill, however, if an ISP "prioritizes or offers enhanced quality of service" for one service, it "must prioritize or offer enhanced quality of service to all" services. But if everyone is treated the same, nothing is prioritized. If everything is the same, no one gets "enhanced" quality; everyone gets the same quality, or in a crowded pipe, the same lack of quality.

As long as there are limits of consequence in the pipe, this kind of regulation only hurts consumers by denying them choices. Once the pipe is fatter, then this policy isn't needed because any service will find the bandwidth it needs to work and no one will have to pay for prioritization. So we have legislation here that either harms consumers or is irrelevant. And why do we have it? Because some people on Capitol Hill believe in a fictional world where everything can be "above average."

posted by Patrick Ross @ 11:45 AM | Antitrust & Competition Policy , Broadband , Capitol Hill , Communications , Net Neutrality

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