Tuesday, December 21, 2010

Screwing Consumers: It's the Telecom Way!

Once again, the old rule that I figured out ages ago remains true: if a conservative starts babbling about the Internet and "innovation", it's really justifying yet another way to screw consumers.

For years, proponents of so-called "net neutrality" have been calling for strong regulation of broadband "on-ramps" to the Internet, like those provided by your local cable or phone companies. Rules are needed, the argument goes, to ensure that the Internet remains open and free, and to discourage broadband providers from thwarting consumer demand. That sounds good if you say it fast.

Nothing is broken that needs fixing, however. The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s. Its nature as a diffuse and dynamic global network of networks defies top-down authority. Ample laws to protect consumers already exist. Furthermore, the Obama Justice Department and the European Commission both decided this year that net-neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure.

Analysts and broadband companies of all sizes have told the FCC that new rules are likely to have the perverse effect of inhibiting capital investment, deterring innovation, raising operating costs, and ultimately increasing consumer prices. Others maintain that the new rules will kill jobs. By moving forward with Internet rules anyway, the FCC is not living up to its promise of being "data driven" in its pursuit of mandates—i.e., listening to the needs of the market.
This is all nonsense. Consumers DON'T have choice. The Internet CAN'T route around telecoms' dominance of the Last Mile. And in a situation of oligopoly or monopoly, "innovation" is only going to happen in ways that allow the monopolist to squeeze more cash out of their captive "customers". We're already seeing North American telecoms systematically underinvesting in capacity now, since there's more money to be made in promising "unlimited" internet and then using your deliberately-cripped networks as an excuse for extracting big data transfer fees. THAT is what will "increase consumer prices", not neutrality!

But, as is usually the case, the only thing this guy cares about is ensuring that the wealthy stockholders of these companies can drain that much more money out of already-beleaguered middle class. Sure, that's what the Republicans and the Wall Street Journal's opinion page is all about. But you'd think they'd be a bit more subtle about it.

(Oh, and if anybody tries to start their own network, they get crushed. Witness what's happened to most of the municipal WiFi initiatives. They work quite well, until the telecoms lean on state governments to get them shut down in the name of, yes, "competition" and "innovation". It's enough to make you puke.)

This sort of thing is exactly the reason why North American internet access is becoming a tragic joke, to the point where it hurts competitiveness and productivity. And it's only going to get worse, not better, since the FCC has pretty much punted on the issue with a loophole-ridden "law" that will probably get torn to shreds by the telecoms' lawyers and various pet mouthpieces. Certainly the Obama Administration has shown that they could give a rat's ass.

Hope you enjoyed the free Internet. Because, folks, unless something changes real soon, it's goin' bye-bye.

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