Adding “Fast Lanes” Does Not Require Harming the Internet

[Commentary] There is a tremendous amount of focus on whether to or how to regulate the Internet to ensure its openness and foster innovation. These actions/inactions have the potential to impact every company we follow. While the Federal Communications Commission has not even laid out its formal plan yet, there has been a firestorm of criticism from technology companies claiming the FCC’s new policies will literally destroy the Internet and stifle innovation.

But if an entirely new lane is added at the ISP’s expense, that does not harm anyone riding along on the preexisting highway. We struggle to understand why enabling an “extra” HOV lane is bad policy that requires government regulation. One should not simply assume that the creation of fast lanes of dedicated bandwidth forces everyone else who chooses not to pay ISPs, or cannot pay ISPs, into slow lanes. While those lanes may be slower than the fast lanes, they were slower with or without the fast lanes. And if bandwidth-heavy traffic that would have traveled over the open Internet (adding to congestion) is offloaded onto a separate fast lane that does not impair the preexisting pipe’s bandwidth capabilities, it should actually ease congestion on the existing lanes, rather than create slow lanes. The regulatory question is whether ISPs are intentionally harming the overall health of the preexisting pipe to force an increasing number of bandwidth-heavy content sites to seek paid fast lanes. If we end up with fast lanes occupying far more of the pipe because ISPs stop investing in the core “non-prioritized” pipes they provide consumers, the government will clearly need to revisit this issue.

[Greenfield is a TMT research analyst at BTIG]