Does Net Neutrality Hurt Or Help Investments?

Will Network Neutrality hurt or help the economy? Amid a stubborn recession, that question will take center stage as critics and proponents debate how new rules at the Federal Communications Commission would impact investments in the Web. At a high level, the arguments are straight forward. But the details supporting those views -- which will likely be debated for months at the FCC -- become vastly more complicated. FCC Chairman Julius Genachowski and proponents of new rules say the next Google or Amazon being cooked up in some garage may not see the light of day if a policy isn't put in place that ensure they'll make it on the Web. Opponents of his plan say ISPs need flexibility to manage their network traffic and keep down costs. They want to make sure some bandwidth hogs aren't ruining the experience for other consumers. And shareholders need to be assured they will get a return on their investments without the uncertainty of new regulations. Blair Levin, a former Wall Street analyst who is now heading the FCC's creation of a National Broadband Plan, said at a 2006 Senate Judiciary Committee hearing on telecommunications competition that regulation doesn't move the needle on investments. The promise of a competitive marketplace, however, can be a bigger incentive for investment, he said. "Ultimately, to serve the goal of stimulating a rising standard of living for Americans, the challenge for government is to assure a broadband environment characterized by survival of the fittest, as selected by the market, rather than survival of the friendliest, as selected by the network owners or government," he said.