Shades of complexity dominate the debate over ‘net neutrality’

[Commentary] After a decade, the noisy “net neutrality” debate is reaching a crescendo. President Barack Obama has weighed in against the cable and phone companies. While his own appointee as chairman of the Federal Communications Commission, a former cable industry lobbyist, searches for a Solomonic compromise that is sure to usher in another decade of political combat, legal challenges and regulatory gamesmanship.

This is a debate that has come to be dominated by hypocrisy, half-truths and impenetrable complexities. At one level, net neutrality is a solution to a problem that, for the moment, doesn’t exist. While Americans pay higher rates for slower service than Internet users in other countries, a combination of public opinion, regulatory pressure and antitrust consent decrees has restrained Internet service providers (ISPs) from blocking, prioritizing or otherwise discriminating against other people’s content -- the evils net neutrality aims to solve. At another level, what the net neutrality debate is really about is deciding who will pay the considerable costs of building out the infrastructure to handle all those bandwidth-hogging videos and games that we’ll be downloading from the Internet. The content providers and start-up app creators, naturally, think they shouldn’t have to pay because that would discourage their economy-disrupting innovation. The ISPs, naturally, think they will only have the money and incentive to expand their network if they can levy an extra charge on the Netflixes and the Googles who have sucked most of the value out of the Internet. But here’s the thing: In a genuinely competitive market, it shouldn’t matter. Whichever side pays will simply pass the cost on to us consumers. This is just a fight between two industries trying to make sure it’s the other which is forced to raise prices.

The real problem, however, is that the market isn’t genuinely competitive, and getting less so. This is more an antitrust problem than it is a telecom problem. Telecommunications is a means, not an end. The aim of telecom policy should not be figuring out regulatory contortions to artificially create a competitive market for Internet access where one does not exist. Rather, it should be to assure everyone cheap and ubiquitous Internet access in order to create a robust and competitive Internet economy.