Why Net Neutrality (Again)?


By Jimmy Schaeffler

At a recent meeting with a top-level executive from one of America’s foremost multichannel video providers (MCVPs), our dialogue involved a rather in-depth discussion about net neutrality and its importance to the future development of telecommunications in the U.S.

The MCVP in this case is one of a handful of relatively new entrants that was able to take best advantage of a rule by the government, i.e., the programming-access requirement of the 1990s that required incumbent cable operators to “share” their own programming content with those new MCVPs.

Thus, for example, Comcast was required to allow DirecTV to carry the overwhelming majority of Comcast-owned programming on the new DirecTV service. The argument made then was that requiring incumbent cable distributors to make access available to new MCVP entrants (such as the DBS providers back then, and the telcos today), not only was critical to the future success of all new MCVPs, but also makes possible the vibrant pay TV competition that exists today.

Move that argument forward about 20 years, and by requiring the existing broadband Internet providers to deliver all relatively equal programming bits in a fair and consistent manner — regardless of ownership or affiliation — is essentially the same argument: it greatly enhances competition in the broadband Internet arena.

Indeed, net neutrality in today’s (and tomorrow’s) broadband worlds means that competing content providers can focus on the pricing and the content itself, rather than having to wrangle with competing distributors over how or when they deliver competing programming. In other words, net neutrality levels the playing field for content providers that deliver content to a distributor, when that distributor might have reasons to discourage the delivery of a competitor’s content. And that means that a content provider (and a distributor) can focus on its core job, i.e., making content and/or distributing content, rather than on some other function where it has little force, knowledge, expertise, or say.

To be clear, as was the case with DBS, the imposition in the early 1990s of just such a rule of “programming access” (or, as it might also have been called back then, “programming neutrality”) made the growth of DBS possible. So, too, just such a rule today for Internet broadband providers allows competition to develop within that industry’s ranks, to the point where one day perhaps such “net neutrality” rules may no longer be required.

But, to be fair, there is also much that is sacrificed when net neutrality is imposed. Perhaps the biggest victim is the idea that in a “free” economy, incentives such as exclusivity and excluding access to those who come second or third, should be the reward for innovation, creation, and other assets shown by the “best and the brightest” of any generation, or of any industry. After all, if that argument has no sway, why does our society give such prominence to patent, copyright, and other forms of intellectual property protection?

In the end, the best result comes when the government (via its legislative, executive, or judicial branches) takes very, very seriously the balance between these competing interests, and probably does that on a regularly recurring basis. The latter renewal is so important because in today’s (and tomorrow’s) telecom worlds, all this stuff will be changing so incredibly quickly, over and over again.

Jimmy Schaeffler is chairman and CSO of Carmel-by-the-Sea-based The Carmel Group.