MCN Guest Blog

FCC Should Heed Danger Signs On Road To Net Neutrality

10/19/2009 12:17 PM

Michael McCurry and Mark McKinnon, co-chairs of Arts+Labs, weigh in on network neutrality in a guest blog. They warn that soon-to-be proposed FCC network neutrality rules target unproven harms, could choke off the flow of creative content and work against broadband deployment.

Don’t look now, but later this week, the Federal Communications Commission is expected to propose new Internet regulations that are likely to limit consumers’ online choices, slow the spread of broadband, and hamstring an industry that seems poised to lead economic recovery. The potential rules also would could block the flow of creative content that gives the Internet its value and bless the business model that favors a single large company. Frankly, we’re puzzled.

The issue is so-called “net neutrality” rules, which would prevent the network operators that connect Americans to the Internet from offering customized services that would enable Web sites and applications to run at high speeds, without interruptions or delays and with extra protections against viruses and other threats.

FCC chairman Julius Genachowski says the potential rules would prevent network operators from blocking or degrading content and make sure that consumers can access any Web site of their choice. These are laudable goals, but existing FCC principles already provide consumers such assurances, and there is no evidence that service providers have any interest in such bad acts. In short, the proposed rules are aimed at purely theoretical harms that have not yet surfaced in the marketplace.

The proposed bar on customized services, which are common throughout the U.S. economy, is especially puzzling given that the Commission’s own Broadband Task Force has publicly observed that different Internet applications have different quality of service requirements. Some require substantial bandwidth, others are latency sensitive, and still others are dependent on speed. Increasingly, creators of applications, software and other online content are partnering with network operators in the early stages of development to better match capabilities and needs. The proposed rules would choke off this beneficial trend.

Such rules also would effectively cripple the creative industry’s ability to compete with “free” content by offering consumers a higher quality experience. The creative community is actively experimenting with new business models, including free advertising-supported content, subscription-based content, streaming content, downloaded content, and pay-per-view content, that aim to provide consumers the content they want, when they want it while also providing content creators the continued incentive to invest in new movies, new music and other types of entertainment that consumers want. However, the distribution of multimedia content over the Internet is still in its infancy. The potential rule would foreclose options by government fiat, limiting the services available to consumers and curtailing the creation of new content by eliminating potential revenue sources to fund it.

Cutting off business options also would pose a risk to economic recovery and subvert the national effort to connect every American to broadband. The proposed constraints would create a serious business risk to technology and content companies that have continued to make substantial new investments even as economic problems forced other sectors to pull back. Network operators are currently planning to invest billions to meet growing demand for Internet services, but that investment and the jobs could be snuffed out by new regulation that chills the revenue streams to fund it.

The potential new rules also put the commission in the ironic position of working at cross purposes with the national goal of ubiquitous broadband. The FCC’s Broadband Task Force has reported that delivering fiber broadband to every American could require upwards of $350 billion in private investment. By cutting off other revenue options, the proposed rules would load all of the expenses on consumers through higher fees for broadband services. That means that fewer consumers, especially those at the lower end of the income ladder, could afford broadband.

Finally, we note that a single large competitor, Google, that has lobbied most aggressively for net neutrality would be the primary beneficiary. By torpedoing the development of other competitive models based on quality delivery, the potential rules would stack the competitive deck in favor of the ad-supported model that Google pioneered. While Google’s contributions to better search and improving the Internet experience deserve our appreciation, Google does not deserve policy favoritism.

The commission’s decision on these rules will set the terms of our digital society and also our future economic well being. From where we stand in the technology and creative communities, the proposed path is strewn with danger-without a clear benefit that we can discern. The commission needs to heed the danger signs and find another course.

McCurry is former White House press secretary to President Bill Clinton. McKinnon is a media advisor/strategist whose credits include the campaigns of George W. Bush and John McCain.

Arts + Labs is a coalition of studios, networks, computer companies, and others promoting online entertainment. Its partners include Viacom, NBC U, AT&T, Verizon, Microsoft and Jib Jab.

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