Marketplace Scratch Pad

The free and open Internet

Scott Jagow Sep 21, 2009

Today, the FCC chairman said he wants to codify rules that prevent wireless providers from messing with your Internet access. His argument has a freedom of speech ring to it, but this is also about bandwidth hogs.

Read the entire speech from FCC chairman Julius Genachowski. The New York Times sums up the debate here:

Internet service providers, both wired and wireless, are struggling with the question of how to distribute network capacity among their subscribers. Heavy users can easily overwhelm cellular toward and neighborhood cable circuits, slowing traffic for everyone…

At the same time, consumer advocates and Web companies like Google want to safeguard what has been an underlying “Net Neutrality” assumption of the Internet: that all traffic is treated equally by the network. If the carriers can degrade or block traffic, they become the gatekeepers of the Internet, able to shut out innovation, these critics say.

Last year, the FCC fined Comcast for fiddling with file-sharing traffic for its cable-modem subscribers. Comcast sued, saying the government had no business telling it how to run its network. That case is still in court.

It’s an interesting issue. On one hand, it’s awful to think your access could be limited by what the ISP decides. On the other hand, there ought to be some mechanism for keeping the bandwidth hogs from ruining things for everyone else.

TMCNet.com argues that rationing will occur with or without net neutrality rules. If the FCC’s rules are passed, then usage-based Internet pricing is almost a certainty:

If metered billing is not instituted, and if service providers cannot shape traffic at peak hours to preserve network access for all users, then heavy users either have to pay more for their usage patterns, they will have to change their usage patterns, or they might experience some equivalent of “busy hour blocking…”

To the extent that such blocking rules already are impermissible, some other network management techniques must be used. And one way to manage demand is to raise its price, either by increases in flat-rate package prices, by instituting usage-based billing or some other functionally-similar policy.

I’d love to hear your thoughts on this. Should the government pass a no tolerance law for manipulating Internet access? Or should ISP’s have some leeway to keep traffic running smoothly?

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