Thursday, May 18, 2006

The Wall Street Journal Blows it Big Time

The Wall Street Journal has an article up today The Web’s Worst New Idea that totally misses the mark on the issue of Net Neutrality.

They say that the current fight for Net Neutrality is a bad idea basically because making laws to preserve neutral data flow by the internet providers would open the door to lawsuits. They claim the government shouldn’t “regulate what isn’t broken.”

The one sentence that sums up their apparent complete failure to grasp the reality of this issue is this:
Given the impulse on the left to regulate anything that moves, perhaps the real surprise here is that it's taken this long for someone to seriously suggest the Net will wither in the absence of a federal regulatory apparatus.
They seem to think those supporting Net Neutrality are only on the left side of the political spectrum. Um, read my profile. I’m sure not in the crowd. Although I pretty much agree with them on this one issue.

But, hey, my own political credentials aren’t all that substantial (which is A-OK with me). Regardless, the WSJ should take a look at the Charter Members on the site. They’d see that the fourth one on the list is Gun Owners of America.

That’s not exactly the type of organization characterized by the WSJ as supporting this issue. Check out what their Executive Director wrote to Congress about the issue. The question is will us little guys be able to make our voices heard in the future?

The other flaw in the WSJ reasoning is that they seem to think that because every thing’s going well now, there is no problem. The issue is not what has happened to the internet, but what the providers say they intend to do with it.

Here’s what’s at stake in simple language, so that even I can understand it:

The high speed internet providers want to be able to start charging for data flowing over their network regardless of where the content originated in addition to charging for each computer that connects to their network.

As it stands right now everyone pays based on how much data flows to the internet at the connection point. That data volume is called bandwidth. The result of the current system is that Google pays a whole lot more for their internet access than I do because they are shoving way more data through their connection than I am.

The current system is fair to everyone because as a company grows, and needs more bandwidth, it is reasonable to expect them to be able to afford to pay more for their access. Suffice it to say that Google has much deeper pockets than I do.

The change the providers want to make is hard to describe because the double charging concept is so foreign to us. Basically it’s without precedent. But I’m going to try.

It would be like setting up a toll interstate highway system. As it stands now, everyone getting on that highway system would have to pay a toll to each state where you get on the highway. How much you currently pay determines whether you can get into the fast lane, or if you have to stay in the slow lane.

Now imagine a different, additional, toll structure. Say a truck was going from Florida to Wisconsin. Under the new system (what the internet providers want to do), the truck would pay his toll to Florida like he always did and get into which ever lane he paid for. But now he would also have to pay an additional toll to Wisconsin the moment he got on the highway or he wouldn’t be allowed to get off the highway there.

It might almost sound reasonable except where the analogy falls apart when you translate it to the internet. Be cause with the internet, you put your data on in one place, but it doesn’t get off in one place, but many. And under the new system you would have to pay an additional toll everyplace you wanted your data to be able to get off the highway.

It would be like the trucker having to pay a toll to every one of the 50 states the moment he got on the highway or he wouldn’t be able to get off wherever he didn’t pay. If you are a big trucking company, like say Schneider, you could probably swing the extra new fees. But what if you were an independent trucker with only one truck?

You end up only being able to work on back water routes and you no longer can make a living because you can’t compete with the big boys any longer. In the end you go out of business.

The same thing will happen to all of us little internet users if the providers have their way. We’re the ones who will be affected most, not the big guys like Google, even though they have an interest in this too. If the providers get their way, check out how it will affect you personally.

If you’re involved in a non-profit this will affect you big time. Hello! Church crowd! Are you even listening?! How much more can your budget afford to pay? Or are you willing to let the providers keep people from hearing your message?

Net Neutrality is a big deal. The WSJ totally missed what the fight is about. If you do any business on the internet and don’t want to be shut out, get active. Contact Congress now, before it’s too late.

Save the Internet: Click here

If you enjoyed this post, get free updates by email or RSS Feed.


Anonymous said...

"Given the impulse on the left to regulate anything that moves, perhaps the real surprise here is that it's taken this long..."

This does not imply that *only* those elements wish to centralize control of the net... it says that, given the left's propensity to attempt to micromanage, it is surprising that we've had a free net for so long.

Chris Cree said...

While your understanding of the strict meaning of this particular sentence taken by itself is correct, when you read it in the rest of the article, with the repeated references to, it is obvious that the writer believes the whole Net Neutrality support is coming entirely from the left or from the big internet companies such as Google.

That this premise is simply not true is one of the points I am making here.

The folks who have the most to loose if the high speed internet providers do what they propose are the little folks like us who can't afford to pay the same fees twice. (Once for posting, and then again so that other’s can access what we post.) Those of us on the right side of the political spectrum will loose just as much as those on the left if the providers get their way.

Timothy Karr said...

I think one can make a reasonable argument for good public policy. Particularly when the policy in question is designed to keep anyone -- government and big corporations alike -- from seizing control of the Internet.

In this sense, net neutrality serves as the Internet's First Amendment, a rule that keeps control of content with the end-users while barring a larger authority -- be it AT&T, Comcast or, even, the government -- from inserting itself between users and dictating which packets of information get privilege over others.

It's a basic freedom issue that most everyone -- right-left, Democrat-Republican, libertarian-"Great Society" holdout -- can support.

On another front, the telephone and cable companies are reporting billions in profits while receiving billions in tax credits for supposedly building out our nation's broadband infrastructure (Meanwhile, USA has fallen from 3rd to 16th in national broadband penetration according to ITU).

Their repeated whining about lack of resources to improve speeds and services for customers comes across as disingenuous when one considers that both Verizon and AT&T have invested less in their networks than they take out in depreciation.

Last year return of and on capital generated almost $15 billion in free cash flow that they took out of the industry.

Over the past three years, they have taken out approximately $47 billion.

Half of this resulting cash flow has been used to pay dividends. The rest has been used to pay down debt, increase cash on hand, and support the merger wave that is sweeping the industry. Recall that AT&T has a $67 billion offer on the table to buy BellSouth. And Verizon offered $38 billion to buy Vodaphone out of their cellular joint venture. These huge transactions tie up resources and diminish the ability to reinvest in the industry.

To cover this financial shell game, they claim poverty, when they are throwing off cash and trying to get a free ride on the backs of the public.

Chris Cree said...

Talk about a facts smack-down! Nice to have a true expert stop by. Thanks, Timothy, I love it!

Everyone should also check out his blog, MediaCitizen to get a better understanding of the debate and how the big providers are trying to frame it intentinally to confuse all of us non-experts.