OPINION
Beware the Double Definitions of 'Network Neutrality'

The debate over "network neutrality" recently heated up with the release of seemingly conflicting poll results from two consumer organizations. Of course, the devil is always in the details, and much of the debate is about whether or not to regulate the Internet preemptively.

Survey results released on January 18 by the Consumer Federation of America (CFA) showed that 70 percent of respondents "were concerned about providers blocking or impairing their access to Internet services or sites, such as Internet telephone service or online retailers like Amazon.com."

It's no surprise that consumers dislike the idea of being blocked from visiting their favorite sites on the Internet. When one company tried to block an Internet phone service last year, consumers were horrified and the Federal Communications Commission (FCC) correctly put a stop to that destructive behavior. However, the reality that consumers don't like to be hamstrung on the 'Net is a red herring. The current debate actually centers on the question of whether to stop Internet Service Providers (ISPs) such as Verizon or Comcast (Nasdaq: CMCSK) from charging more for faster Internet services.

Pay More, Get More

The other survey, released on January 17 by the American Consumer Institute, addressed the real concerns. It showed that "84 percent of online households want the option of premium Internet services that are faster, safer and more reliable." This means that if Verizon wants to make a deal to ensure Movielink content downloads fast and efficiently no matter how fast the consumer's broadband connection is, consumers would probably like that outcome.

That might seem like a no-brainer, but some content companies, and the pro-regulatory CFA that is playing along with them, are upset because they don't like the idea of paying more for better services. Regardless of how much they kick and scream, in the real world, that's how things work.

Indeed, Google (Nasdaq: GOOG), one of the companies frequently cited as opposing ISP experimentation with new business models that charge for extra speed and bandwidth, makes its money from the same concept. If an advertiser wants better positioning on the search engine, it pays more.

Advertisers could argue that Google is discriminating by not being "neutral" in their ad placements, but they'd be laughed right out of any lawmaker's office. That's exactly what should happen with the "neutrality" issue when it comes to broadband, except that the content companies, including one that is not supposed to be evil, are working hard to conflate the real issue with freedom to access Web sites on the 'Net. No one should fall for this political trick.

Market Forces

Companies should be allowed to choose the business model that works best in a market economy, and partisans of regulation should re-evaluate their stance. History shows that a heavy regulatory regime, such as the forced access mandates under the 1996 Telecom Act, were a disaster and put Americans at a disadvantage by slowing the deployment of high-speed Internet services. Those damaging regulations have been addressed through a combination of FCC actions, court decisions, and technological changes, and the time is now to start treating telecommunications firms like any other technology company.

Internet Protocol Television (IPTV) is on the cusp of taking off and providing real competition for the clunky and expensive cable system that makes American video entertainment so pathetic. In order to provide this service, the networks require upgrades, and the upgrades only happen if investors believe that it is worth their while to fund them. This means that ISPs need to be able to try various ways to recoup their investments while making their customers happy.

The American Consumer Institute's survey indicates that consumers want better, faster, secure services, and are willing to pay for it. If lawmakers decided to regulate the Internet preemptively and disallow the provision of premium services, everyone would be worse off, including those whose main job is sorting data.