Rebuttal to Washington Post Editorial on Net Neutrality

Mark Cooper, Director of Research for the Consumer Federation of America guest-blogs with the following response to the Washington Post's fact-challenged Monday editorial:

In a June 12 editorial titled "The Internet's Future: Congress Should Stay Out of Cyberspace," the Washington Post regurgitated the cable and telephone companies' spin on Network Neutrality, cautioning that Internet freedom supporters want to "burden the Internet with preemptive regulation."

This statement is wrong as historical fact and public policy. Network Neutrality has existed throughout the history of the Internet and created the most dynamic environment for innovation and competition the nation has seen in generations. Good government policy decisions created an open, neutral communications platform over the objections of the telephone companies. It is the opponents of Network Neutrality who would burden the Internet with network discrimination.

The Post brushed aside concerns about network discrimination with statements like "the Internet will always be relatively democratic" and "the extra barriers to entry would probably be small because the pipe owners know that consumers want access to innovators." Network discrimination alters the fundamentally open architecture of the Internet and forces innovators to negotiate with network operators before they can get into business - ending the era of "innovation without permission," as Vint Cerf, one of the fathers of the Internet calls it. The implications of the loss of Network Neutrality deserve more careful consideration than the Post's platitudes and weak assurances.

The Post also repeated telephone and cable company claims that "the weakest aspect of the Network Neutrality case is that the dangers it alleges are speculative." The concerns about discrimination are far from speculative; the Post simply has not or does not care to look at what network operators have been doing and saying they plan to do.

Cable operators, who were excused from Network Neutrality by the Federal Communications Commission, force consumers to pay twice if they want a different Internet service provider than the one they provide. They discriminate against Voice Over Internet Protocol (VOIP) providers in quality of service (Comcast refuses to guarantee the same quality of service to unaffiliated VOIP providers), against content (Time Warner blocked letters to subscribers of its AOL subsidiary with which it disagrees) and against applications (Cox is blocking craigslist while it promotes its own classified advertising Web site).

For years, the FCC let the telephone companies force consumers to pay twice if they wanted VOIP from an unaffiliated provider (i.e. they refused to sell "naked" DSL). Even when the practice was banned as a merger condition, the companies continued to make it difficult for competitors. When the North Carolina ISP Madison River blocked competing services, the FCC made them stop but then repealed its own authority to prevent blocking in the future by reclassifying broadband access as an information service. The telephone companies have been the most aggressive in demanding the right to make exclusive deals. And we cannot overlook the brutal campaign of foreclosure and discrimination they conducted against the Competitive Local Exchange Carriers (CLECs) after the passage of the Telecommunications Act of


Thousands of ISPs, who were strangled by the network operator policy of forcing consumers to pay twice, and hundreds of CLECs who lost tens of billions of dollars without ever gaining access to the telecommunications network are evidence enough that network operators will not hesitate to abuse their market power. This anti-consumer, anti-competitive discrimination took place while its legality was being challenged. If discrimination becomes legal, it is likely to get much worse.

Even more ominous is the fact that consultants funded by the cable and telephone companies have already begun a drumbeat to get rid of the open protocol altogether. This is an attempt to return the nation to the pre-Internet environment of proprietary communications networks that may or may not interoperate at the discretion of the operator, an environment in which network operators have much greater leverage.

The Post editorial tells us not to worry about discrimination because "more than 60 percent of the Zip codes in the United States are served by four or more broadband providers that compete to give consumers what they want." This Zip code data has been criticized extensively by the GAO. A single customer in a Zip code tells us little about the actual nature of competition. And the FCC definition of broadband --

200 kilobits in one direction -- is a ridiculously low speed compared to what high-speed Internet access actually is.

More importantly, in the economic analysis of market structure and industrial organization, markets with the equivalent of fewer than 10 equal-sized firms are considered concentrated by the Department of Justice and the Federal Trade Commission. Markets with fewer than six are considered highly concentrated. Four very unequal-sized competitors do not represent sufficient competition to prevent anti-competitive and anti-consumer abuses.

Yet 98 percent of high speed Internet subscribers use either the telephone network or the cable modem service. Their market share has been rising, not falling, and as broadband becomes even higher speed, the chances that there will be more than two full service broadband platforms decreases. A duopoly is not enough for to ensure vigorous competition. The cozy duopoly will not compete on price and will spend more time protecting franchise services than innovating. This is why U.S. prices are so high and the take rate of high-speed Internet is so low compared to the rest of the world.

The Post editorial laments "the fact that the U.S. broadband infrastructure lags behind that of East Asia and Europe." It advocates network discrimination as the solution, but it fails to note that those nations did not get ahead by allowing network discrimination. On the contrary, the nations who have surpassed us have done so because they adopted national policies to promote broadband deployment and forced the network operators to run neutral networks, relying on competition for services, unimpeded by network gatekeepers and toll collectors, to drive adoption.

The magnificent success of Network Neutrality in providing innovative, competitive environments in other nations, the track record of past abuses of market power by U.S. network operators in the U.S., and the loud declarations of intent to discriminate in the future make it clear that the advocates of network discrimination have it backwards. Network Neutrality is a proven, successful reality; network discrimination is a hypothesis, a theory in search of support that does not exist, which will impose a severe burden on the Internet. If Congress does not step in to restore Network Neutrality, tollbooths will raise consumer costs and gatekeepers will slow innovation, destroying the fundamental character and architecture of the Internet.


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