Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
The Comcast Center, Pennsylvania's tallest skyscraper, is a monument to the success of one of Philadelphia's largest companies. Comcast employs nearly two thousand Philadelphians and its foundation has given over $30 million to charities in Philadelphia and across the country. Despite Comcast's ascendancy, the cable provider remains vulnerable - yet its greatest threat is not from Baby-Bell competitors but from lawmakers in Washington, D.C.
Comcast has come into politicians' crosshairs because of its efforts to slow customers' peer-to-peer file sharing. On Jan. 8, FCC Chairman Kevin Martin announced Comcast is under federal investigation, facing millions of dollars in fines.
"Network neutrality" supporters are in a frenzy, calling for congressional action. Rep. Ed Markey (D-Mass.) is on the verge of introducing legislation imposing neutrality on all Internet service providers. But net neutrality laws threaten to hobble the Internet as we know it.
Net neutrality would make Comcast's actions illegal - but non-neutral practices, like slowing down peer-to-peer traffic, are perfectly reasonable ways to manage networks. Comcast targets the popular file sharing program Bittorrent, speeding up overall traffic by making networks smarter and more efficient.
Though Bittorrent is a hotbed for swapping pirated media, it's beginning to be used for legitimate commercial purposes. But that doesn't mean every Internet Service Provider should be required to give customers all-you-can-eat Bittorrent access. Besides, Comcast's user contract expressly bans file sharing. Why should Congress force companies to let customers break voluntary agreements?
Upgrades are desperately needed to expand broadband pipelines, and Comcast is investing hundreds of millions of dollars to do just that. Until the overhaul is completed, curbing some transfers helps relieve congestion so customers can browse the Web smoothly.
Still, many broadband customers are angry that Comcast is limiting Bittorrent and refusing to explain its techniques. But revealing these details would fuel the arms race with pirates, who have already taken to encryption and other techniques to get around file sharing restrictions.
Instead of more regulation, Congress should give us genuine Internet choice. Disgruntled Comcast customers could simply switch providers, but Americans have too few ISP choices thanks to laws protecting existing providers and FCC regulations blocking new wireless technologies.
Adding neutrality proposals to this already skewed market makes for a one-two punch to consumers. While existing regulations bar new information "pipes" from reaching homes and businesses, neutrality regulations ignore that the existing pipes are only so big and can't always feed the file sharers' appetite. When peer-to-peer programs cause Web surfing to crawl during peak hours, network management lets ISPs make sure customers don't have to face slowdowns. Without smart management, today's occasional Internet hiccups will swell into full-blown traffic jams - the online equivalent of a rush-hour pileup.
Speaking of traffic, asking ISPs to treat all data the same is akin to forcing ambulances to wait in traffic during emergencies. Life-saving technologies like remote surgery must communicate using network "expressways" so information gets to its destination swiftly and reliably. Likewise, digital voice and online gaming traffic needs to traverse networks rapidly.
Net neutrality is a death sentence for these popular Internet activities. It prevents ISPs from letting time-sensitive information jump ahead of Web surfing, where an extra millisecond goes unnoticed.
In coming years, gigabytes will give way to terabytes, and then exabytes of data. Providers will have to spend billions preparing for this "bandwidth crunch." But consumers don't have to foot the whole bill; video services like YouTube or iTunes could share the cost. These media-rich Web sites push lots of data through the tubes, earning lots of money from ad revenues and fees. Such sites have good reason to work out priority pipelines with Internet providers so viewers can watch their videos without jitters or long load times.
Under net neutrality, however, such creative arrangements would be illegal, and the cost of new upgrades would fall squarely on customers' shoulders. Neutrality proponents purport to care about consumers, but higher Internet bills benefit no one.
In a free market, consumers choose their online provider, and businesses select which services to offer. Americans want faster Internet access, but Internet providers will shun investment if they can't even control their own networks.
Global interconnectivity has been a boon for economic growth and free expression - but if net neutrality is legislated, technological progress will slow, undermining these tremendous benefits. The Internet's future should rest in the hands of innovators, not Washington bureaucrats.