Industry Nonsense on Net Neutrality

The industry frenzy has begun. Big phone and cable companies are frantically grasping at anything they can lob against Net Neutrality since the FCC’s announcement Monday that it would expand rules to protect the principle.

Here are some of the most prominent talking points rising to the top of the BS pile:

Unintended consequences and self-regulation

Industry has taken to saying that any rule or law on Net Neutrality will have “unintended consequences.” And by consequences, they mean that rules to protect an open Internet could hurt their plans to profit from a closed network to which they hold the keys.

Here’s what Walter McCormick, chief executive of the industry trade group USTelecom, said:

    We ... remain concerned about the law of unintended consequences and a rulemaking that potentially goes too far. All Americans enjoy an open and free Internet today.

And what about tomorrow, Mr. McCormick? Big phone and cable companies want us to believe that the industry will self-regulate, keeping the Internet free and open on our behalf.

Is that what Comcast was doing when it was caught blocking and degrading Internet traffic in 2008? Or what corporate heads mean when they consistently pump up investors with their plans to control the Internet? Or why industry groups have hired more than 500 lobbyists in D.C. and spent millions on anti-Net Neutrality campaigns? All in the name of Americans enjoying Internet freedom? Hardly. Maybe we should make a drinking game around the number of times Comcast, Verizon, AT&T et al., feign support for openness.

Solution in search of a problem

Industry wants us to think that there never was, and never will be, a problem with Internet openness. Here’s David Cohen, executive vice president at Comcast, still saying that action on Net Neutrality is a “solution in search of a problem”:

    The Internet in America has been a phenomenal success that has spawned technological and business innovation unmatched anywhere in the world. So it's still fair to ask whether increased regulation of the Internet is a solution in search of a problem.

Let’s remind Cohen of this little caveat to his argument: A Net Neutrality rule or law would simply keep the Internet the way it was originally designed to be– the same engine of innovation he’s praising. It would ensure that Comcast can’t block or degrade online content, and that’s what has the company so troubled.

Stifling Innovation

For those crying “Wah!” that Net Neutrality would stifle innovation, save your tissues. An open Internet – where anyone can be a player – naturally sparks innovation, creativity and entrepreneurship. To cut off this engine of growth during our economic crisis would be nothing short of crazy.

And imagine what continued innovation on the Web could bring us. In just five years, there are going to be so many applications we can’t even imagine. Just think about life before Twitter, Skype, Pandora. There will be nothing holding us back.

False Scarcity

Some industry-friendly bloggers and editorial boards have weighed in against the FCC faster than broadband speeds in Japan.

Wired blogger Dylan Tweney’s argument against Net Neutrality is so tired I just hit my head on my keyboard. He warns that congestion problems will arise and dominate the Web if we take away the ISPs’ ability to “shape or restrict” traffic. The truth is – and the reason we are having this debate – ISPs are failing to provide supply to meet exploding consumer demand. They want an economic environment where they can freeze supply and call scarcity, and then sell that scarce supply at a premium to the highest bidder.

Furthermore, ISPs will continue to be able to manage their networks under Net Neutrality; they just have to be transparent with the public about the tactics they use. If they have nothing to hide – like the covert use of deep packet inspection to flag “undesirable” information – there won’t be a problem.

Too Poor

In typical parroting fashion, the Wall Street Journal printed an editorial that makes a poverty plea for ISPs that like to say they’ll go broke under Net Neutrality. This has been a basic talking point for years -- that openness is a costly requirement that forces ISPs to abandon connecting poorer communities and bulking up broadband capacity to meet growing consumer demand.

Can somebody please give me something more difficult to debunk? In late 2006, AT&T reluctantly agreed to adhere to strong Net Neutrality provisions as a condition of its merger with BellSouth. At the time, AT&T pleaded its own form of poverty, saying Net Neutrality was a burdensome rule that would prevent it from investing in buildout of broadband services into disadvantaged regions.

But AT&T’s spin isn't reflected in the numbers. In the two years that AT&T operated under the Net Neutrality rules required of its merger, the company recorded gross profits of $72.9 billion (2007) and $74.1 billion (2008). In those same years, AT&T invested tens of billions of dollars to expand and upgrade its high-speed networks.

Companies are going to continue to squawk while the FCC and Congress move forward with plans to protect an open Internet. My recommendation: Get some ear plugs. Because while they’re still whining about a business model that hurts the economy and hurts the consumer, the rest of us are blowing past them.

Stay tuned for policy briefs from Free Press that further debunk these industry talking points in greater detail.

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