Posted: August 23, 2010
Net neutrality law? Fuggedaboutit
It could hurt business and the economyMartha Young
Definition of Learn: verb, to acquire knowledge of or skill in by study, instruction, or experience. To have learned is to be able to accurately use a concept in different applications.
The discussion of net neutrality is all over the media. Net neutrality is the idea that all legal Internet content should experience the same level of throughput and speed without rate flow prioritization or interference from the service providers. At first blush, that sounds pretty good, but take a few minutes to consider the implications of what would happen should net neutrality legislation be enacted.
There are four players impacted by any decisions associated with net neutrality: network operators, service providers, content providers and consumers.
• The broadband network operators (ATT, Qwest, Verizon, et al) are those firms responsible for the physical infrastructure.
• The service providers (Amazon, Google, Yahoo, et al) are those firms providing network enabled services but do not build or maintain the physical networks on which the services run.
• The content providers are firms and organizations providing the information users go to the Internet to find. Examples of content providers include universities, social media sites, local and national news services, and millions of other web sites.
• Consumers are the people using their service provider to access the broadband network built by the operators, to obtain content on the Internet.
Should net neutrality become legislated the implications will be vast, extremely negative to businesses, and ripple throughout the economy.
Net neutrality is a disincentive for network operators to continue to build out the physical infrastructure. The infrastructure would have to be overbuilt to allow for the bandwidth overhead needed to support unknown yet-to-be-developed applications and content.
RESULT: The US is already behind its global competitors in terms of broadband access. Net neutrality would only exacerbate an already weakened global competitive position.
Service providers would limit the type of content provided to those applications producing the most revenue. YouTube would definitely not be support. Neither would Skype. Both video and voice are bandwidth intensive applications. RESULT: Net neutrality limits innovation and business opportunities. Any new business opportunities the Internet could enable would be squelched. Forget about any on-line shopping or research of the obscure and esoteric questions you may have.
Content providers would minimize their bandwidth requirements so that the service providers would enable the flow of their information. All video would be disabled. Any graphics intensive materials would be scrutinized and probably removed.
RESULT: Web sites would become paragraphs of information without pictures, sound, or interactive content; and social media and other information sharing sites would disappear.
Consumers would be less inclined to use the Internet for information sharing and gathering. The content would be limited and incomplete thereby making it less reliable.
RESULT: Consumers would cancel broadband service subscriptions, reducing the revenue streams of service providers which would then impact both the content provider community and the network operators.
The altruistic goal of net neutrality is to allow equal access for all content. However, it does not take into account the costs associated with enabling equal access and who will have to bear those costs. It does not consider the overall economic impact, in terms of lost jobs and business opportunities that are enabled by a robust Internet infrastructure.
Finally, net neutrality does not consider the impact on Internet users and the denial of bandwidth intensive services.
We have been down a similar regulatory path with the telephone infrastructure. As a good friend told me, "We are replaying the old common carriage, universal access, carrier of last resort debates except now in the broadband space." Clearly we did not learn the lessons and are rehashing the same old issues.
The definition of insanity: To repeatedly perform an action with the expectation of a different outcome.
Martha Young is principal at NovaAmber, LLC, a business strategy company based in Golden. Young has held positions as industry analyst, director of market research, competitive intelligence analyst, and sales associate. She has written books, articles, and papers regarding the intersection of technology and business for over 15 years. She has co-authored four books on the topics of virtual business processes, virtual business implementations, and project management for IT. Young can be reached at firstname.lastname@example.org or on Twitter @myoung_vbiz