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1/15/2014
11:40 AM
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Net Neutrality Court Ruling Won't Ruin The Internet

Competition, not massive regulation, is the best way to make the Internet open.

A federal appeals court earlier this week neutered the FCC's Net neutrality rules, which prevented carriers like Verizon and Comcast from interfering with other carriers' traffic. It's a freak-out moment for many, including the Los Angeles Times, which wrote a headline "Bow to Comcast and Verizon, your overlords." Not quite.

Here's the stated problem: The big carriers (notably Comcast) have already shown that, left to their own devices, they will start picking and choosing which data streams should be fast, slow, or simply blocked. That means that the carrier, not the person who pays the bills, is in charge of what will and won't work from end to end. So, enterprises could be in the position of having selected a VoIP-as-a-service provider, tested the provider, and then having service degrade, not because there is a legitimate engineering issue, but because the carrier has decided to deprioritize (or drop) packets between the provider and the enterprise.

Proponents of Net neutrality say that regulations that force carriers to treat all packets the same is the right way to fix this problem, and that, absent Net neutrality, carriers will discriminate against competitors. It's a compelling argument: Why wouldn't AT&T want to mess with Vonage? Why wouldn't any cable provider want to mess with Netflix or Hulu?

[Learn more about the court ruling. See FCC Net Neutrality Rules Rejected.]

Yet, I fundamentally disagree that Net neutrality is the right thing for the FCC or others to focus on. The right thing to focus on is encouraging a broadband free market. A true free market allows consumers to switch when they're not getting what they paid for. Even in today's market, where there are only two or three choices, if a large company's IP voice traffic starts getting messed with by AT&T, let me assure you that AT&T will be minus one customer.

From the consumer standpoint, let me also assure you that the second that Netflix starts getting messed with by a cable provider, Netflix's software will pop up a message on the consumer's screen that says: "For best service, you may wish to switch to XYZ provider in your area."

The trouble is that historically, broadband is not a truly free market, since, typically, there are only two consumer broadband providers in any given community. Enterprises typically have more than two choices, yet pricing is normally baselined at the consumer level, since consumer service is far more common. I have been witness to a third provider entering my market, followed by drops in price and increases in capacity.

In recent years, the American Recovery and Reinvestment Act's Broadband Technology Opportunity Program (BTOP) provided grants to build out more broadband infrastructure. This helped to make the broadband business far more competitive than it has ever been, since part of the "strings attached" to the grant money was that carriers must allow others open access to the fiber. The private sector has also contributed to competition: Google singlehandedly raised "fiber optic" to public and economic development consciousness. Smaller municipal successes like Gig Tank have also fueled investment interest in middle-mile networks.

Net neutrality isn't a bad thing to focus on, but I worry that too much regulation could really drag down the Internet. You have only to look at the antique and slow-moving common carrier telecom regulation environment to see that this worry is founded in reality.

Why am I worried about burdensome regulation? You see, the FCC originally crafted its Net neutrality rules classifying Internet service as "information services," not a common carrier telecommunications service. Since the court struck down Net neutrality largely based on this classification, it is possible that the FCC may reclassify Internet service as telecom, making it subject to a vast quagmire of obsolete and awful regs.

The larger -- and more productive -- issue for the FCC to focus on would be how to foster more broadband competition. Let me guarantee you that without competition, no amount of regulation will help prevent bad things from happening. Without competition, prices and capacity stay the same.

Bottom line, I don't think that enterprise CIOs have anything to worry about, for now. Carriers would be idiots to start messing with the very customers that keep the best metrics about service delivery: enterprise customers.

And in general, the Internet is not going to melt down because of a lack of Net neutrality. But choice will be seriously affected if growth in competition doesn't continue. And the best way to kill new entrants into the market would be to significantly increase regulatory burden on Internet providers. Whatever the FCC does in response to the ruling, let's hope that it's not that.

Jonathan Feldman writes for InformationWeek on the topics of leadership, innovation, IT people skills, and running large organizations "like a startup." He is CIO for the City of Asheville, N.C., where he encourages innovation through better business technology and process.

Too many companies treat digital and mobile strategies as pet projects. Here are four ideas to shake up your company. Also in the Digital Disruption issue of InformationWeek: Six enduring truths about selecting enterprise software. (Free registration required.)

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BeckyC031
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BeckyC031,
User Rank: Apprentice
1/15/2014 | 12:36:20 PM
Regulatory Capture
What "The Judge" is confused about is that most regulation has been captured by politically well-connected businesses, Regulators are not wise impartial eunchs devoting the totality of their existence to the good of the American public. I am astounded that people can have such faith in the  governemnt's regulation of the Internet when it is the same governemnt which is in the process of destroyijg the Internet with their data strip mining operations.  Please see this article by Electronic Freedom Foundation : The FCC and Regulatory Capture.
anon2054905372
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anon2054905372,
User Rank: Apprentice
1/15/2014 | 12:20:58 PM
Calm Down everyone
  Let me say this about the companies doing this cut down on bandwith. You haven't seen anyone do it yet. When they say this and that to cut it would be a death nail. Think about it with the viral permis we are in. Let it start on Facebook or Google then it is everywhere. They riped me off.People will stay away just because of the words said. That would be a death nail. Let a company be that guy. AT&T would never think of it. 60 percent of the business does this. Let the mobile industry does this well lets go to T-Mobile. They have a cross platform with phone and internet. It would mess with both businesses. They wont do it. Comcast has the AT&T to worry about. They would be the bad guys. It will never happen. I think the writer had it right. 1 customer is 100 or 1000. nothing ever happen in the few.

 

Always follow the money. It is bad bussiness to do this people will find out and the knowledge would be the death nail.

 

Doc
The Judge
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The Judge,
User Rank: Apprentice
1/15/2014 | 12:15:12 PM
Confused author
Mr. Feldman appears to be unaware of one of the primary roles of government, to protect its citizens.  The FCC is a REGULATORY agency; it was not created to foster the economic development of industry, but to regulate the development in a way that protects and benefits the citizenry of this nation.

The idea of regulation of an industry as an evil plot against business permeates our society today, yet it was less than 100 years ago that most people in this country were no better off than the serfs of Russia.  Turn a blind eye to business, and see what happens.  When given the opportunity, they'll sell their souls to the enemy (look at how many circumvented the ban on the sale of steel to Japan in the early-1940's)...
ecory
IW Pick
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ecory,
User Rank: Apprentice
1/15/2014 | 12:13:24 PM
Part of the problem..
A big part of what I have a problem with is that AT&T, Verizon and other broadband providers have used federal dollars to build out "their" fiber infrastructure. The problem is that it really isn't theirs. It's ours, all of ours. Charge me for access to it, and for the support you provide, but don't try and bill the backbone as something owned and financed by big red or big blue. Sure, they did a majority of it, but not all majority is created equal. It's transmission across this publicly funded infrastructure that I have problems being metered / limited.

"And in general, the Internet is not going to melt down because of a lack of Net neutrality. But choice will be seriously affected if growth in competition doesn't continue. And the best way to kill new entrants into the market would be to significantly increase regulatory burden on Internet providers. Whatever the FCC does in response to the ruling, let's hope that it's not that."

I haven't seen any additional competition pop up in my region of the US since U-Verse came in to play 6 years ago. But what do they offer? A maximum of 6mbps when the cable company offers 100mbps; both metered. The only areas where things have really changed that I can see is where Google Fiber has started.
mediajolt
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mediajolt,
User Rank: Apprentice
1/15/2014 | 12:08:04 PM
A naive posting
This article is all about promoting competition to enable better quality service from ISPs. What the writer fails to acknowledge is that in many locations - nay, the majority - there is no real competition. Cable operators have swallowed up local competitors or pushed them out of the market so that there's no real competition in place. Sure, there's the phone company, but unless they update their infrastructure, real speed is still unavailable in most places. And the hope that Google will save us all with fiber is a very long ways off, if even possible at all.

No, these types of non-competitive, monopoly situations are exactly what governmental oversights and regulations are for - because any corporation, if compared to a human being, is a sociopath by behavior, and the government is the doctor prescribing meds and creating boundaries to keep these sociopaths from harming the public at large.

This writer's position is naive and willfully ignorant.
anon3801881579
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anon3801881579,
User Rank: Apprentice
1/15/2014 | 12:00:56 PM
A Nice But Impractical Idea
Ideally, I agree in principle with the author here that a competitive solution to this problem is preferrable. Unfortunately, and I suspect it is true for the vast majority of rural customers, I have but one broadband ISP available to me at my home. Thus, if I have any slow-down or blocking issues with any given provider, I have no recourse other than to give up my internet access. Futher, let's remember companies find other ways to disincentivize moving from provider to provider. For the foreseeable future, I believe Net Neutrality is a practical must.

 
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