The chairman of the FTC (originally a recess appointment) spoke out on her views on the Internet neutrality debate. The net is buzzing with news and thoughts from various sources.
The chairman’s remark on the status of the market and competition is somewhat telling:
Net neutrality advocates are sincere in their concerns, … I just question the starting assumption that government regulation, rather than the market itself under existing laws, will provide the best solution to a problem.
As others have remarked, there aren’t really great market forces at work here because of the Cable vs DSL duopoly. What interests me in this case is the (little acknowledged) fact that the market was drastically altered by last year’s Brand X Supreme Court decision.
Essentially what the court did, which is relevant to this discussion, was allow cable broadband operators to continue to not allow alternative Internet Service Providers to use their wires. With this in hand, cable operators were freed from the possibility of having to open their wires to competitors, and DSL operators were given an excellent excuse to close their access to ISPs down. Regulation is a response to this change to maintain the status-quo of openness.
At the risk of treading on an existing analogy, it may help to think of the debate in terms of a mall and a bazaar. In the neutral-network world, much like a physical bazaar, anyone with goods to sell has access to the meeting place. There may be a low fee of entry (typically a license), but essentially the market functions as a commons. Similarly, in the Internet bazaar, anyone can pay the low fee of entry (in the form of their regular ISP access charge) but can then have free reign over the system.
Consider next a mall with only two stores. For anyone to sell goods in these stores, they must work with either ‘space provider’ to help them get access to the public. Even if it is assumed that everyone would have access to sell their goods at both stores, there’s a great chance that the price paid may influence the placement or presentation of the product. This is the vision of the non-commons network.
Returning to the Chairman’s arguments, I dispute both the fact that there is a market and that the past experience under existing laws is any indication of what’s to come in the future (the almost simultaneous DSL rate increase may be an indcator of this).
I would urge Chairman Majoras to consider these points along with the fact that, as a Government speaker, she has a responsibility to refrain from using her power to influence public debate in a manner that makes conclusions seem predetermined.