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Net Neutrality Is Vital

5 Mar, 2015 By: Thomas K. Arnold

The Federal Communications Commission’s landmark ruling to declare Internet providers public utilities has met with a mixed response from those in the entertainment business.

The overriding sentiment appears to applaud the concept, but wonder — and maybe even worry — about the execution.

The concept is clear and, in my book, appropriate: Anything relied on as heavily by the public as electricity, or the Internet, needs to be protected in some fashion. And though as a small-government advocate it pains me to say this, the only viable method we have of protecting the public is through the regulatory arm of government.

California’s brief attempt to de-regulate utilities in the early 2000s was a disaster: energy bills tripled, and $10 billion left California in one month alone, bound for the corporate treasuries of unregulated power generators.

That’s because the private sector is not out to ensure what’s best for the public. The private sector answers to its shareholders, and its overarching goal is to maximize profits, not do what’s best for the public.

In the case of most businesses, that’s fine. Let the free market reign. But the big Internet Service Providers (ISPs) are different: They provide a delivery line, not a product or service, and keeping those lines open is critical for the public good. Unfortunately, we’ve seen them act the way any smart, for-profit business would act: in their own best interests. Verizon, AT&T and Comcast want the freedom to charge what they wish. They claim that they can’t afford all the investments they’ve been making and that companies like Netflix and YouTube are making gobs of money off their pipes and need to ante up more money to compensate the ISPs for all the extra bandwidth they are consuming.

The problem here is that the extra costs get passed down to consumers.

Under net neutrality — which the FCC finally accomplished through its finding that ISPs, like the big power companies, are public utilities and thus have to answer to a higher authority (the public) rather than their shareholders — all websites are equal. The commission has effectively eliminated the ability of ISPs to charge interconnect fees to ensure faster streaming speeds. This is as it should be, if you consider any attempt to restrict the public’s access to information — which is what higher costs invariably do — a breach of our constitutional rights.

The downside of government control, of course, is the prospect of over-regulation and, with it, a bigger bureaucracy — and more fees and more taxes to pay for it.

Netflix CFO David Wells really said it best when he intimated that in a perfect world, ISPs and companies like Netflix would be able to work things out on their own and reach some sort of compromise. “We were hoping there might be a non-regulated solution to it,” Wells said at the recent Morgan Stanley Technology, Media & Telecom confab in San Francisco.

But since that hasn’t happened — and clearly wasn’t going to happen — the FCC made the right call.

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