The Funeral of Net Neutrality

The Federal Communications Commission (FCC) just killed net neutrality.  There will be memorial services next week and Shiva will be hosted in rotating residences across Silicon Valley. 

This is the defeat of net neutrality.  Yes, you’ll hear about compromise, but the FCC’s proposal is in no way a compromise. Of the five-commissioners, not a single Republican will vote for this “compromise.” The Democrats all say that they want complete net neutrality, but had to abandon it in their “compromise” with an unmentioned party.

The committee reached their great “compromise” by separating wireless providers with those of broadband – an important concession that will allow wireless providers to distinguish between content and block that which competes with the provider.

What this “compromise” ignores, is that by definition, it is impossible to have partial net neutrality.  Giving in on net neutrality is giving in on net neutrality.  The FCC’s proposal wants to separate some content for some people, but at the same time, never discriminate against content.  This is completely contradictory since net neutrality, like free speech, is all or nothing.

By separating wireless from broadband, the FCC just said that net neutrality only exists for old technology.  Wireless devices are the fastest growing tech sector right now.  For the iPhone alone there are over 300,000 third-party apps with more than 7 billion downloads.  But now providers can block apps and prioritize content.  If the FCC is indeed sincere in its public speeches, they have yet to address how net neutrality, entrepreneurs, healthy competition, or innovation win by awarding AT&T and Verizon Wireless the right to discriminate against apps of their choosing.

Julius Genachowski, the FCC Chairman, tried to spin his proposal.  “These rules fulfill a promise to the future,” he claimed, “to companies that don’t yet exist, and the entrepreneurs that haven’t yet started work in their dorm rooms or garages.” What his words and contradictory actions indicate is that entrepreneurs get equal access to the internet on broadband devices.  However, if they want to create, say, a competitive restaurant guide for college students, but Verizon Wireless already has a contract with Zagats to promote their restaurant application, the entrepreneur will get closed out of the wireless market – the market most likely used by students.  This hurts innovation, free market capitalism, and future commerce.  Internet is the infrastructure for future businesses.  Censoring ideas because they compete with a provider should be constituted as infringement of the First Amendment, not promoted by the FCC.

This proposal is the silver bullet that will kill net neutrality.  Watch as the internet’s barriers to entry begin to climb.  Larger percentages of start-ups will emerge from other countries.  In a time when America needs innovation more than ever, creating these barriers is the absolute worst decision policy makers could place on the ailing economy.  If cutting back on technological progress is the great new idea for promoting economic stimulus, it's no wonder China and India are poised to overtake the US economy.  Mourning the loss of net neutrality is sadly just the first of many funerals soon to come.

The Funeral of Net Neutrality