The future of the internet hangs in the balance

The US Congress is currently discussing an issue which sounds rather technical and dull but which could have profound implications for the future of the internet.  If you care about whether the internet remains innovative, vibrant and open you should pay attention to the obscure-sounding question of net neutrality.

The issue is simple: should internet service providers be under an obligation to carry all network traffic without discrimination? Those in favour of net neutrality say that such a requirement is needed to protect the open, innovative nature of the net. Those against net neutrality say that market forces will ensure continued innovation and that legislating this requirement will stifle investment in new broadband services.

This is not about the ability of internet service providers to charge consumers more for faster, high-bandwidth connections; they have always been able to do this.  It is about whether the ISPs can enter into arrangements with particular content providers to give their data preferential treatment as it travels through the net.

The cable and telephone companies want to be able to charge content providers.  Ed Whitacre, CEO of AT&T, said this:

Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes? The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!

Of course, the problem with this argument is that consumers already pay for the cost of those services, in rough proportion to the amount they use them.  What the telephone companies want is something more: they want to be able to share in the value created by content providers.

None of us likes the idea of government regulation of the internet, which has grown and propsered largely on a self-regulating basis.  If the network providers faced significant competition, there would be a strong case for letting the market decide.  But they don't: telephone and cable companies have legally backed monopolies, and without net neutrality they will be able to use their market dominant position to extract a share of rents earned by value-added content providers such as Google and Yahoo.  Cable and telephone companies have a product – the network – which is increasingly a low-value commodity, with surplus capacity, and they are keen to use their market power to grab a share of the value being created upstream.

Tony Wu at Columbia University, described the danger in graphic terms:

it's just too close to the Tony Soprano vision of networking: Use your position to make threats and extract payments. 

In other words, without net neutrality the service providers will in effect be able to extort protection money from every content provider, by threatening to slow or even block the websites and services of their competitors or those who refuse to pay up.

One of the great successes of the internet has been that it is a 'dumb network' – that is, all the 'thinking' is done by machines at either end. The network just carries the data from one place to another, irrespective of what it is.  This property facilitates innovation – Tim Berners Lee, for example, was able to invent the protocol that underlies the web, and Dave Winer could invent RSS feeds which underpin blogging – without needing to persuade anybody who operates the network in between to support their new service.  Without net neutrality, this disappears. The network itself will treat different sorts of data differently, so it will be harder to innovate and add new services that compete with existing products.

If we allow Big Media and Big Entertainment to buy up the internet, we will all lose out.  Bloggers will find their traffic is in the slow lane relative to the news output of the large media corporations.  New internet startups will not be able to compete against incumbents because they won't be able to afford the ticket onto the superhighway.  

But the prospect of larger monopoly rents is a powerful motive. The phone companies are spending tens of millions of dollars lobbying against net neutrality. On the other side is a coalition which is non-partisan and which brings together large companies, NGOs, lobby groups, bloggers and most of the people who care about the future of the internet.  Companies such as Google, Microsoft,  Amazon and EBay (not always natural bed-fellows) have joined together with groups as diverse as MoveOn.org and the Christian Coalition of America to campaign to protect net neutrality. 

The news today is not good:

In a dramatic tie vote Wednesday, a U.S. Senate committee rejected an amendment that would have preserved the status quo of equal pricing for all Internet traffic, an issue known as network neutrality.

But all is not yet lost:

The amendment that failed was part of a larger telecommunications bill that passed the committee and now heads to the full Senate. A similar amendment could be reintroduced into the larger bill before that vote.

in my view this is significant issue. If you like the internet without big business being able to use its financial strength to keep the little guy out, you should care about this.  If you don't act now, please don't complain when the net is taken over by big corporations. 

So what can you do? The Save the Internet Coalition has a handy list of seven things you can do if you want to protect net neutrality. 

Published by Owen Barder

Owen is Senior Fellow and Director for Europe at the Center for Global Development and a Visiting Professor in Practice at the London School of Economics. Owen was a civil servant for a quarter of a century, working in Number 10, the Treasury and the Department for International Development. Owen hosts the Development Drums podcast, and is the author Running for Fitness, the book and website. Owen is on Twitter and

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