Net neutrality leads to systemic risk

October 23, 2009

The decision by the Federal Communications Commission to begin the process of imposing an Internet neutrality rule is curious as well as wrongheaded.

The financial crisis should be a potent reminder to communications regulators that the best of government intentions can create horrible, though unintended, consequences. Easy monetary policy by the Federal Reserve, for instance, aimed at countering a recession in 2001, helped create a dangerous housing bubble.

Like physicians and Fed governors, regulators should first seek to do no harm. And that is especially true when they are trying to impose a solution in search of a problem.

Broadband prices, for one, are on the decline. The average cost of consumer broadband has dropped to less than $20 a month from $50 in 2001. And more people have access. As late as 2004, 70 percent of households still used dial-up modems for web access. Today, just 10 percent do, with broadband speeds doubling over that period. Tough to find a market failure here.

Of course, the Internet has hardly reached its potential. But future network upgrades to handle high bandwidth applications will be costly. One way to pay for them would be to charge higher rates to Google, Amazon and other corporate users who generate huge volumes of traffic.
Not surprisingly, content providers are in favor of net neutrality and the de facto government-created subsidy it would create at the expense of telecommunications companies.

Net neutrality is merely another form of rent-seeking that seeks to manipulate regulators for private gain. The goal: Use the FCC to turn the telcoms into highly-regulated utilities that would absorb the cost of future network build-outs — before passing it along to consumers, of course.

The Open Internet Coalition, which represents Google, Amazon and eBay, sees things differently, saying the FCC decision advances a regulatory framework that “promotes innovation and consumer choice on the Internet.”

But not only do more consumers have access to ever-faster broadband, they have more choices. In addition to the telcoms, America has four nationwide 3G wireless providers and a fifth, Clearwire, readying a nationwide launch of a 4G WiMax service.
The FCC nonetheless is pushing forward with seemingly little concern about the unintended consequences of intervening in a well-functioning sector vital to the American economy.

At the very least, the FCC will likely face years of court battles over the rule, that could serve to paralyze the sector. Now there’s your systemic risk.


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The article committed one of the groups that has been the strongest supports of net neutrality, small website owners. One of the concerns is that large companies like Amazon and Google will be able to pay more to service providers in return for higher priority bandwidth. This would greatly hinder small business owners who can’t afford to compete with the large companies.

Posted by john locke | Report as abusive

Will the government PLEASE get out of our lives!!!! A new constitutional amendment should be that one law has to be repealed for every new law made. Enough is enough.

Posted by Board | Report as abusive

What a bunch of non-specific garbage. The parallel drawn here is ridiculously weak. The U.S. trails the rest of the developed world in broadband speed, yet has the highest prices. Where I live I have 2 choices for internet, one DSL, the other cable. Both are over-priced and mediocre.

Here’s a real analogy: The internet is akin to the roads. Keeping roads free to use stimulates economic growth. Allowing private companies to regulate who can drive on a road and how fast they can drive? That would choke economic growth.

More non-specific ‘Big Government’ fear-mongering. Sorry James, ideology isn’t enough. You need facts. Just another argument that purports to protect ‘free market’ principles, but just really defends the status quo monopolization of the market.

Posted by Mark | Report as abusive

The FCC is a joke. “Net neutrality” is just a catchphrase that has been warped by corporate interests. Most average citizens would assume that this debate focuses on unrestricted user access to the whole internet. In reality, that is not the focus, it is a battle between network providers- who would like to be able to cap bandwidth, and content providers- who would like to be able to have unrestricted abilities to increase and improve content. The average user barely factors in this struggle, if only as a statistic.

What’s worse is that there is currently an effort to recruit users into backing net neutrality, even though they don’t understand what it is all about. In one of these emails, there was particularly little information on the actual debate. To further complicate matters, the FCC is not usually known as a media users best friend. Their draconian censorship laws, which I have dealt with first hand while working in radio, combined with their misplaced emphases on certain violations, while ignoring more corrosive offenders, makes them one of the government’s most political and mismanaged agencies.

Posted by greg | Report as abusive

It would be nice (and perhaps professional **sarcasm intended**) if the authors of articles such as the above would at least declare any conflict of interest or lack there of.

Posted by mark | Report as abusive

This article is a perfect example of egoism at work. Egoism is when we attach things to ourselves as if they were actually a part of us. People do this habitually and in small ways all the time. Ever heard someone say “I can’t live without my …”? Unless it’s a dialysis machine or something of similar general purpose, that statement usually reflects an attachment to some kind of superficial comfort.

In the case of this article the author is against net neutrality because neutrality diminishes profit and obligates financial participation on the part of all users (the subsidies he fears will follow).

The author is not against neutrality because it is not good for the people. He’s against it because it’s bad for business. That’s a whole world of difference.

“Like physicians and Fed governors, regulators should first seek to do no harm. And that is especially true when they are trying to impose a solution in search of a problem.”

Who do you suppose is being “harmed”. And does one suppose that the word harm is just another word for profit loss?

“Net neutrality is merely another form of rent-seeking that seeks to manipulate regulators for private gain. The goal: Use the FCC to turn the telcoms into highly-regulated utilities that would absorb the cost of future network build-outs — before passing it along to consumers, of course.”

So never mind that growing the internet and expanding its capabilities are a societal responsibility. The internet has changed the way human beings live in ways that were unimaginable only 30+ years ago.

But screw making it better for every one. Those companies that make a living selling access to the rest of us, now think we should be paying more for certain services, now that we’ve had time to become dependent on the Internet.

The essence of the article speaks to the idea that one should be upset over the idea that telecom companies would not get extra profit from upgrading their infrastructure.

And if companies are not going to make extra profit from this then this is bad for the citizen because the companies will simply charge you more to make sure they extract their money some how.

Neutrality is good for the people. In business it’s survival of the fittest. Or at least that’s what business people like to say. So please stop the corporate bitch sessions.

We citizens have been hit from all sides. If business wants to survive in the market place then it can do so without bleeding the citizen dry.

We are not animals and we should not be content to live as such.

Posted by Benny Acosta | Report as abusive

Delusional! Who gets broadband for $20?

Posted by Jim | Report as abusive

“The average cost of consumer broadband has dropped to less than $20 a month from $50 in 2001″

What? Where is this statistic dug up from? Broadband averages about $40, as it has for a number of years:  /06/report-broadband-up-in-2009-for-sen iors-low-income-groups.ars

Posted by Emerson | Report as abusive

Each human activity has its own dynamic principles.

Capitalism is necessary to exchange values. But the Stock Exchange is built on greed and fears marrying basic laws of offer and demand. Investment should be a simple operation that money is returned after some time with a plus of interest rates. Allowing the main capital corrode on risky gambling leads to huge loses far beyond developed countries can control.

Sending the Stock Exchange to operate in Las Vegas put a solution to the financial system telling people that gambling is risky.

During millions of years food has been scarce and body exercise critical for human survival. Nowadays modern life brings excessive food and machinery to replace human work. The simple consequence is a worldwide growing obesity spreading till humans learn the principles of nutrition.

Neutral internet is a simple principle to make communication more accessible and independent from distorting capitalism. We are learning with economic meltdown the consequences of greed minds and poor leadership to protect simple principles of human existence. Obesity is going to reach 85% in the US if the trend does not change according to some studies.

We are learning that developed countries have problems to handle the food system, the economic system, and now perhaps Internet functioning.

Posted by Elson Silva, PhD | Report as abusive

Author is talking about how net neutrality will effect businesses. He hasn’t mentioned that net neutrality is important for open and free society. I don’t want to live in a system where I can have easy access to websites only if website is paying to internet provider or otherwise website won’t get priority in data transfer.

Posted by Naserke | Report as abusive

I understand the FCC is now seeking public comment on the issue of the internet, In my opinion, the internet could use the entry of a regulatory body.

Posted by james reginald harris, Jr | Report as abusive

I get so pissed off about this debate! Even the people who are right are wrong! Look, I don’t want to pay my ISP to increase the bandwidth inside their system by dozens of times so you can watch HDTV on your browser. If you want it, you pay for it. HOWEVER, it’s no ISP’s business what content anybody is viewing. They should be blind and neutral. What they should charge you for is some scheme of bytes per second, minute, hour; something that passes on their expenses to those who cause them after accounting for the random nature of much traffic.

Posted by Pete Cann | Report as abusive


How does it feel to have your entire article laid bare by a random internet citizen? Perhaps if Benny Acosta’s internet provider had blocked access to, he wouldn’t have had the opportunity to lambaste your poor excuse for a column.

I’m forced to ask myself why Reuters is paying you to write poorly researched drivel on a topic you don’t understand. I’d write more if you hadn’t already been so plain in detailing your desire to see poor people with few choices remain fixed in their socioeconomic state and if the previously mentioned commenter hadn’t already expertly made said desires apparent.

Posted by John Cromie | Report as abusive

[…] Reuters Columns Blog Archive Net neutrality leads to systemic risk | Blogs | Quote: […]

Posted by Net Neutrality – Xtreme CPU | Report as abusive

Agree with Benny Acosta.

“…Easy monetary policy by the Federal Reserve, for instance, aimed at countering a recession in 2001, helped create a dangerous housing bubble.”

What author doesn’t mention is that what multiplied the effect of the bubble burst to the level that it almost destroyed world financial system, were UNREGULATED OTC derivatives.
Does anybody remember what was the main argument in the nineties against regulation of the OTC derivatives? Don’t regulate something that is working completely fine, that thanks to the lack of regulation economy is booming etc, etc…
Exactly author’s argument against Net neutrality.

Posted by PwlM | Report as abusive

Your laughable description of the financial crisis should have been a good indicator of where this article was heading. Sure, the FED played a part, but lets not forget that we’re talking about a Federal Reserve run by bankers with private interests who worked for 30 years to deregulate the financial markets. Go look up the 3rd pillar of Reaganomics and get back to me. And lets not forget that Donald Regan was the primary advocate of Reaganomics, oh, and the former CEO of a little bank called Merrill Lynch…

In short, the crisis happened because BANKERS got what they wanted…not Government.

Now your supporting something endorsed by who? People that sell us internet!!! Why is it that a company who’s slogan is “Don’t be Evil” (Google) is for open internet and Net Neutrality?

The truth is that all the lobbying against Net Neutrality is being done by the same old crooks who’s primary goal is to CONSTRICT the internet. If they succeed, only sites that can pay more (lets say Fox News) will function well while those that can’t, won’t. Thus, more traffic will be driven to the highest paying sites…

If you’re reading this, maybe now you can see why this might be the top story on Reuters.

Posted by Bryan | Report as abusive

“As late as 2004, 70 percent of households still used dial-up modems for web access. Today, just 10 percent do, with broadband speeds doubling over that period. Tough to find a market failure here.”

Here’s your market failure: compare the US to the rest of the world: 08/

We are 18th in speed Worldwide. It’s 2009. No one should be on dial-up. And, BTW, there is advertised broadband speed, and then there is actual broadband speed. You can test your actual speed here:

The U.S. is 28th in download speed, 31st in upload speed. That is a failure.

Posted by Mark | Report as abusive

Acosta, you’re the egoist here, with your post as long as the original article itself.. and on top of that you’re full of BS. The big content providers want a free ride on the backs (backbones) of the telecoms. These content providers are looking like big fat leeches.

Posted by Charlie Culbertson | Report as abusive

I have 30 patents related to internet technology. This is an emotionally fear based article.

Net neutrality is hardly rent seeking. Without net neutrality, my two startups would have never gotten off the ground.

All deployments of new bandwidth frameworks are expensive at first. If market rules didn’t work, Google and others would be subsidizing it to get more people using it. Sounds like the author has no business experience.

I’d say more, but the article is so poorly articulated it’s not worth it. There are better arguments against net neutrality on the web that actually deserve consideration, but I felt the need to respond based on the incompetence of the author.

Posted by withheld | Report as abusive

James is often mistaken. Perhaps the american taxpayer should ask ma bell and her offspring should pay back what they were given in the first place and they continue to experience, a government protected market. Large corporations simply cannot be trusted to control an asset so important to America. Any observer to the behavior of corporations knows that they simply cannot be trusted.

Posted by csodak | Report as abusive

The basics of Pete Cann’s comment are an accepted and encouraged fact of commerce in nearly every other industry, and are at the core of the neutrality debate. The basic idea is: You use more, you pay more. Very simple.

To attempt to foist the costs of building the “roads” onto businesses at the destination is foolish and is evidence of illogical thought. You pay for bandwidth upgrades by charging more from those who demand bandwidth upgrades … the consumer who wants to use the extra bandwidth … not on Google or wherever the consumer intends to go.

The author’s argument that bandwidth prices are going down is a clear indicator that prices can be pushed considerably higher for those who demand faster speeds, and make no mistake that faster speeds are really only needed for services already provided in other forms … namely streaming media, which is handled quite nicely by televisions and radios, up until now. The desire to push those services into TCP/IP territory is driven by the lower DELIVERY costs of the TCP/IP networks, and not by any quality or convenience metrics.

The issue that this article ignores even as it implies doomsday events for those who choose to ignore it is that forcing DESTINATIONS to pony up more when there has been no demand for their services (new companies) based on theoretical projections of potential use is completely flawed, and bass-ackwards. Let those companies develop their high-bandwidth products, and if they are any good, the people who use them will be asked to pay for their use. If the extra fees for using high-bandwidth products keep people from using them, then re-work the products so that they do not use so much bandwidth, and the costs of using them will go down.

Net neutrality is NOT “another form of rent-seeking”, as the mis-informed author claims. It represents the concept of a level playing field for businesses and consumers, and if it is not implemented, only the businesses with the deepest pockets will be able to compete, and the whole idea of the Internet as a public resource will die.

Posted by James Butler | Report as abusive

Web site owners should not have to pay service providers for the traffic they generate. That would ensure only the wealthiest distribute their content online. You Tube, independent news, social networking sites: all would be forced to pay huge sums to telcoms. The internet would turn in to cable television, where only the viewpoint of corporate interests is heard.

Posted by Andrew | Report as abusive

I don’t think it’s entirely clear what the ramifications of “net neutrality” law might be, but intuitively, based on experience, I trust Google and Amazon a lot more than I trust AT&T and Comcast.

It’s unsettling that those resisting neutrality are not openly stating exactly what they have in mind. What exactly do they plan to do that neutrality would prevent? Something tells me it will benefit large corporations and limit the expression of individuals, which is typically what happens when lobbyists get involved, which is obviously the case in this issue.

With the amount of emotion that has entered the debate, the possibility of reaching an intelligently reasoned, effectively nuanced, and universally beneficial solution is becoming more remote.

Posted by miles zarathustra | Report as abusive

I had a hard time taking this article seriously. Please stop controlling my internet.

Posted by Judah Moskowitz | Report as abusive

Many years ago, only AOL subscribers were allowed to enjoy the special content at Naturally, no consumers were in favor of this, and many complaints later, was available to everyone.

Imagine a world where your Gmail cost one price through your AT&T home broadband and a different price on your Sprint mobile. Consumers will never accept that. Net neutrality already exists today, and we enjoy it. Why not formalize it?

Posted by Bryan J Busch | Report as abusive

I do believe that no regulation leads to a curved path that leads to a rapid change that has to be fixed poorly and quickly. We need rules for about anything, and that includes religion, congress, and the president. And, guess what, the rules cannot be made only by the people who have to obey them, they can’t only be made by the enforcers, and they can’t only be made by politicians. I do think that the net must be open to all, but it must be policed of spammers and hackers,and also of service providers that aim to corner the market.

Posted by f belz | Report as abusive

Wow. This guy has a wacked view of the situation. Net neutrality is a consumer protection. Nothing else. Failure of Net Neutrality is a win for the providers because the power to decide how you will be allowed to use the internet is then in their hands. Is that really what is good for us consumers? Really?

Posted by Brian King | Report as abusive

put me on the side of web neutrality.
otherwise, the internet will become like cable, where you have to buy basic and/or different tiers of premium access, with additional fees for sports, games and packaged subscriptions.
the cost to use the web will increase dramatically, with many low-income households making the choice to forego the internet altogether because it will become unaffordable.
the internet in america will cease to be a tool of productivity and open creativity. it will become a “profit center” for major corporations who will ultimately want to control the content as well as the access.
don’t let them do it- demand continued net neutrality and equal access for every household.

Posted by Seraphine | Report as abusive

Greed and lack of rational thinking is what caused the housing bubble and financial collapse. People wanted to make money and they found creative ways of doing it. But apparently no one thought that the mortgages in the CDO’s, which were given AAA ratings and sold with insurance from AIG and Lehman that they wouldn’t default, would actually default. That ignorance let to the collapse of the system. That ignorance cost tax payers $800 BILLION dollars, when we already were financially insolvent as a country to begin with. Regulation to protect tax payers from irrational exuberance of already profitable corporations is just being responsible. Which would you prefer; if it isn’t broken, fix it or if everyone does it, we can get rich charging them for it?

Posted by Rachel | Report as abusive

The way things are now are great I feel. No one is being charged for using X amount of bandwidth, and we have access to any information that we want to seek out. This is the way things have been, and should remain. I find it ridiculous that in this country, we have some of the most expensive, and worst internet services available in the world (and they still don’t charge for bandwidth usages in most places out side the USA, yet their service is much better. I suppose the ISPs there are more concerned about keeping an informed public rather than inflated profits.)

The internet being free is an amazing thing, this allows people of all backgrounds and all classes a chance at learning if they so desire. People who oppose net neutrality are playing off peoples fears of the government being too controlling, but I worry that internet providers run by larger corporations (EG: Comcast / Direct TV being apart of Murdocs NewsCorp) will be able to censor and limit what people have access to. Do we really want people using comcast only able to access Fox news and

I understand peoples fears on the FCC regulating the internet, but the seeks to prevent the things I hear most people worrying about

“Under the draft rules, subject to reasonable network management, a provider of broadband Internet access service:
1) may not prevent any of its users from sending or receiving the lawful content of the user’s choice over the Internet;” To address this quickly, I hear most people saying they are worried about government censorship, but I worry more about ISPs censoring what we have access to, in order to better support their interests.

“2) may not prevent any of its users from running the lawful applications or using the lawful services of the user’s choice” many of my friends study outside the USA and I am a user of Skype for communicating with them, it takes up a bit of bandwidth and also is one of the cheapest ways for me to communicate running on a starving artist’s budget.

“4) deprive any of its users of the user’s entitlement to competition among network providers, application providers, service providers, and content providers.” Seeing things like this clause worry me that people behind net neutrality have already been approached with services by broadband providers that would limit users to the ISP’s brand only email, video services, news services, etc… We would lose so much of our freedoms to corporate interest here.

I feel that net neutrality is an essential part of keeping our country informed, many of us cannot afford internet as it is, and to have our access limited by broadband caps and censorship feels to me it would be criminal. I for one am proud that the FCC has taken the stance to protect net neutrality and I am with them 100% on this stance, and I would ask others to join me.

A strong United States comes from an informed public, not supporting net neutrality may hinder this greatly, please, I urge you dearly, support net neutrality.

Posted by JGBVI | Report as abusive

You really need to stop shilling for Big Media! Net neutrality is a much needed step to stop REAL abuses by monopolistic companies. Comcast has already shown (by throttling internet connections and then LYING about it) that 1.) They do not care about their customers, 2.)That record earnings do not translate into improved networks, they just improve stockholders bank accounts and 3.) That they do not respect the role of the FCC and challenge their authority at every chance. Don’t even get me started about AT&T’s behavior lately!

The truth is that ISPs and wireless providers have every incentive to block net neutrality legislation. Comcast has Video On Demand and Voip services that DIRECLY COMPETE with internet based offerings such as Netflix, Vonage, Amazon, etc. It is not inconceivable that they will at some point want to block or throttle connections to promote their services over others. Verizon wireless is especially guilty of these practices, as most of their phone offerings already offer a “walled garden” of content and applications. Getting outside that wall is next to impossible for the average user.

If you want all of your content, movies, news, sports, and music controlled by AT&T, Verizon, Comcast and their ilk, then by all means, fight net neutrality. It means that we as consumers will have less choice and be FORCED to deal with these companies.

If, on the other hand, you simply want to connect to the WHOLE internet, with ANY device and run ANY application that you choose, then you might want to support the FCC and tell Congress to support net neutrality!

Posted by John Nemesh | Report as abusive

I think we’ve all seen what happens when the government forsakes its duty and leaves everything to the private sector. Billions of bailout tax dollars latter the ideas that this columnist espouses are simply out of touch with reality. It was unregulated markets that gave us a financial crisis that is worse than the great depression, and it was government intervention that is helping to get us out of there; not the other way around. A coded and written net neutrality is not just consumer protection, it’s protection of tax payer’s money.

Posted by Fernando Sosa | Report as abusive

Just as other commenters have noted, this author of this article has no significant understand of the subject material.

Net neutrality is what we already have. The FCC seeks to make it formal, rather than simply a status quo. The telecom companies wish to admonish it, in order to open up new revenue streams and maintain market dominance.

The author doesn’t understand that, without formal neutrality laws, any ISP can decide the interferes with its own news service, and begin to charge customers fees if they wish to continue to be allowed access. A lot of good that would do to continue spreading his own misinformation.

If you read this article and actually believed it, then please help yourself to more kool-aid.

Posted by Chris Shaheen | Report as abusive

Proponents of net neutrality love to invent hypothetical scenarios of ways companies could abuse customers. It is true that a free society gives people the freedom to be stupid, wrong, and even malicious. The great thing about capitalism is that it also gives people the freedom to decide whom they want to do business with. A socialized Internet takes away that freedom and turn it over to politicians and lobbyists. Why do “net neutrality” advocates ridicule politicians for comparing the Internet to a “series of tubes,” and then trust them to regulate it? utrality/

Posted by David V | Report as abusive

I am very surprised at the tone and direction of this article. Net neutrality is needed to protect the consumer from the snooping and selective bandwidth assignment that current telecommunication companies employ today. Telecom companies have NO right to deep-inspect my traffic and then select to drop said packets if they don’t like it (perfect example here are torrent packets). If I pay for internet service I should get what I paid for and net neutrality guarantees that. It is a shame that telecom companies selectively screen certain data to supposedly “manage” their bandwidth, when in fact they do that because they don’t really have the capacity to give you the 10 Mbps bandwidth you’re paying for.
Indeed future network upgrades will be costly, haven’t they always been? I don’t follow the argument about charging high-volume traffic sites for data usage, I mean, they ALREADY pay for their bandwidth as does the consumer. Internet connectivity doesn’t come out of thin air, all these large companies have ISPs as well. Continuous upgrades to the telecom infrastructure happens all the time and if telecom companies want to attract more consumers then that is necessary for them to do. They’ll just charge the consumer for it, and I see no problem with that since I would be ready to pay $100 for a 100Mbps connection, no problem.

“At the very least, the FCC will likely face years of court battles over the rule, that could serve to paralyze the sector. Now there’s your systemic risk.”

I mean, really? The sector will never get paralyzed. There’s just too much money at stake, and the internet has become an integral part of our lives that will always be around no matter what.

If you want to talk about stifling, again, I will refer to BitTorrent. It is the MOST effective method of transferring large amounts of data between many nodes as quickly and efficiently as possible. There really is no other alternative these days. Telecom companies are screening out torrent packets like it’s gone out of style. THAT is technology stifling right there.

As somebody who works in the technology sector, I must unfortunately say that this author has no clue about what he is talking about. Sorry, but it’s true.

Posted by Mo Agha | Report as abusive

Being against net neutrality is a great idea, if you want everyone’s internet access to look like this: lity091808.png

Do you seriously think that allowing an ISP to choose what I’m allowed to view, and letting them throttle my access or charge me more for using a site like youtube, is a good idea?

Of course, this article is written by someone who thinks that our recent econimic crash was caused by overregulation – when even the wall street gamblers who caused the mess are saying that things weren’t regulated enough.

Posted by Adam | Report as abusive

this guy is straight up nuts…the internet works BECAUSE it is open and net neutrality keeps it that way.

Posted by mr. galen | Report as abusive

Thanks, James! These are strange times, when the power companies are lightyears ahead of the Internet service providers. An industrial power customer doesn’t just pay for kilowatthours, they also pay for their highest kilowatt draw each month. Smart Grid will make this way of saving available to everyone. Meanwhile, the Internet service providers are saying, “You pay so much per month for a 100 amp service and you can draw as much as you like, no metering.” Sensible?

Posted by Pete Cann | Report as abusive

The network providers do not have to accept public regulation as long as they DO NOT USE public rights of way. Yes, rights of way are public property used without much or any compensation. Called a “free ride”. And now we are supposed to let them limit public access and control of it. Forget it. That is what the FCC is *FOR*. Any interference with net neutrality should be HEAVILY taxed to provide open access to the rest of us.

Posted by Texas Mike | Report as abusive

Wait- The point of the net neutrality is to make the ISP’s pay for their own development? How terrible!

Over a decade ago Americans subsidized the telcos by paying for a massive fiber optic network(remember the At&t “You Will” commercials?). It was promised that telco industries would provide fast cheap broadband, the low price of which would be a repayment for these subsidies. None of that panned out, although industry got its virtually free fiber network. After almost 2 decades the US lags far behind broadband speed in the international wired world and we will never recoup the money we invested as citizens.

Americans payed for a network that they were cheated out of. The same companies are now stating that they need more money to improve your life on the internet, by restricting your access to sites and throttling your bandwidth. And that we should trust them that this is the best for us.

Net Neutrality merely states that all information be handled with the same priority. This forces business to allow the consumer to make their own choices how they want to consume the bandwidth they have purchased. It is to provide a fair playing field between companies and consumers. If you wanna believe the companies that their way would be better for you, please take a look at their track record first.

Posted by frank | Report as abusive

How about you talking heads just quit passing laws, because you obviously have no tact or ability to do so in a manner that doesn’t take advantage your constituents. It seems like every law that is being passed is just another tax, another bureaucratic system regulation that bogs down real progress, or another way to cede sovereignty to international oversight against the rights of the people – all passed by people who’s sole purpose is taking $$$ from one group of people and giving it to another, mainly themselves or their shadowy overlords. This will pass because we don’t live in free nations. I bet this will just be another way to push globalization and human enslavement forward.

Posted by Thomas | Report as abusive

James you contradict your own point. You can’t simultaneously mention how effective broadband Internet access is America, and then plead for the rules to change. The current system (network neutrality) is either working or it isn’t.

Internet access is not an end in itself. It’s fairly useless without an Internet service on the other end. Much like how roads are fairly useless unless you have some place to go. Network neutrality fosters development of those services.

As an example consider a toll road vs. non-toll road. There are far, far more services available on non-toll roads and often with better quality/price point.

Abolishing network neutrality is simply AT&T and Comcast’s attempt to stop video over the Internet from driving down profits on their cable TV offerings.

Posted by Matt Midboe | Report as abusive

First, the cost of consumer broadband isn’t being measured accurately if it is described as $20/month. That price usually includes a lock-in contract with various penalties (indeed, that is the key “innovation” that moved prices down to that level). Oh, and that shift pretty much entirely happened over a 12 month period. Prices have been quite stable since (likely why stats from 2001 one are cited in once case, and 2004 in another).

Secondly, if you think broadband speeds doubling over 5 years or prices going down by 40% over 8 years is a sign of a lack of competition, you aren’t familiar with the tech industry. Prices have dropped much more significantly in all other aspects of networking, and performance has increased by far more. There *is* a market failure here, and that is despite the fact that ISP’s have generally not tread outside the Net Neutrality circle in hopes of avoiding regulation.

The obvious problem with charging Google, Amazon and other for-profit service providers is that while it just cuts in to their margins (and they pass it on just like ISP’s would), it creates a new barrier to entry for their future competitors. Asking for a penny every MB might be fine for Google, but might kill the next YouTube before it gets out the door.

Posted by Christopher Smith | Report as abusive

James Pethokoukis is an ignorant reporter or being told what to write or get fired.Anyway We paid with our taxes for the pipeline and the telcos need to STFU.

Posted by arrrrgh | Report as abusive

This is silly. You claim that we have choices. I live in LA and I don’t have choices. I am being held hostage by a duopoloy – Time Warner and AT&T. Those are my two options. I cannot get WiMax. 3G is dog slow. I cannot get powerline or microwave or any other whiz-bang technology. I am still stuck with 10-year-old technology because there is no competition.

I would also like to see your source on the average price of broadband being under $20. Does that include the mandatory obsolete phone line or cable service? Of course not. You can’t get away with anything less than $35. We’re a 2nd-world country in this area.

The FCC is only formalizing the guidelines that have been in place for years, that allowed the mostly-Americna internet to flourish and our tech industry to boom. The only risk from a lawsuit between telecoms and the FCC is a delay in the increase of productivity that will result from a continued bandwidth starvation.

Apply your argument to the RIAA and MPAA. Since they are generating content and users are downloading it, should they pay for all the torrent traffic? Not even a hard core pirate would agree with your flawed logic.

Posted by Ryan | Report as abusive

The current FCC effort is designed to KEEP the internet free. What the author advocates is turning it over to corporations like News Corporation, which has no scruples whatsoever when it comes to turning public discourse into a profit making activity. For corporations like New Corp. you aren’t even allowed to have online friends without paying them for the privilege.

If the Net-neutrality we now have is abandoned for corporate control, the net will cease to be an equalizer and instead will simply serve the wealthy at the expense of the poor. It will also give corporations incredible new powers to impose themselves on everything people do on the net, not only in terms of the cost of access but also in terms of what content they will provide at what cost. If you like the idea of poll taxes, where only the rich can vote, you will love it when net-neutrality is eliminated. However, if you can imagine just how unjust a world it would create, you would be well to support net neutrality.

Posted by S. G. Poss | Report as abusive

Please do not take head to this opinion. Instead, look at real reports that compare global statistics about broadband penetration, speed and cost. The US lacks one city in the top 20 globally for download speeds.

We are falling behind to countries that have adopted a net-neutrality stance, changing the regulatory framework IS the only way to catch up.

Posted by Bretton | Report as abusive

Who pays James Petokoukis’ salary?

Posted by tom | Report as abusive

[…] The decision by the Federal Communications Commission to begin the process of imposing an Internet neutrality rule is curious as well as wrongheaded. full story […]

Posted by Net neutrality leads to systemic risk | World of Ulysses | Report as abusive

And lets get rid of phone neutrality too! I’m tired of paying the same prices to call people who use other phone companies! I hate the fact that I can pay the same amount to call someone in Florida as I can in Washington. THIS IS AN OUTRAGE.

Phone neutrality is merely another form of rent-seeking that seeks to manipulate regulators for private gain. The goal: Use the FCC to turn the telcoms into highly-regulated utilities that would absorb the cost of future network build-outs — before passing it along to consumers, of course.

Posted by Karl | Report as abusive

James, what lobbyist gave you your facts? Think for yourself, man. You’re a reporter: Report. Don’t feed us the talking points that lobbyist just handed you. Seriously.

Posted by Netizen | Report as abusive

This is absurd. The first step of logic the writer invites us to take sends the reader careening down a slope of reason that is a straight drop into a corporate/monopolistic slop.
Similar to the corporate media slop we find ourselves treading today.

Posted by choupachoup | Report as abusive

This article is almost too poorly-written to even warrant my commenting on it. But I felt that I must, just to chime in about how absolutely ignorant and incompetent the author is.

Posted by Joe | Report as abusive

James – consider this analogy. A town decides that a nearby Walmart is taking jobs from their local stores. So they charge a surcharge for trucks travelling along the Interstate that passes through town if the truck’s final destination is Walmart. The impact is that the local stores are supported by the transit tax on Walmart… Right?

Thankfully this would be illegal (I hope). So which neutrality do you support?

Posted by Nic Fulton | Report as abusive

This article is completely wrong. Net Neutrality simply guarantees the conditions under which the internet was invented and thrives. The fabric of the internet is threatened by corporate greed and short-sightedness. You still have to pay your ISP a fair fee, but no ISP should control your content access.

Posted by Austin King | Report as abusive

Get that huge paid cock out of your mouth James.

Posted by wee | Report as abusive

High volume sites *Are Charged Higher Rates*. Piping data to your computer IS charged at Both Ends of the pipe. Youtube DOES pay more to send you a video then reuters does to send you text.

This is ALREADY the case.

Net Neutrality proposes none of this. I suggest you try reading about it at least as much as you intend to write before playing reporter.

Posted by Chris Mckenzie | Report as abusive

All I know is my service has gotten worse, not better. If someone doesn’t regulate this insanity, I won’t even have a reason to continue with any service.

Posted by Charles | Report as abusive

This entire column is disgustingly inaccurate. The only broadband plans below $20 a month are the truly bottom-of-the-line options that barely can handle YouTube, much less the high definition content that other sites like Hulu can provide. It also completely ignores possible new technologies, which will require significantly higher bandwidth than is currently available, that would never get off the ground if ISPs could control who accesses their pipes and impose surcharges on certain kinds of content.

ISPs should be regulated just like phone companies: required to carry anything across their lines without restricting it any more than necessary to keep the entire network from collapsing. And, even then, any restrictions imposed to keep the network up should be disclosed in plain English, including what the triggers are and what specific limitations a customer would face. Any further restrictions are damaging to the content online.

Posted by Michael | Report as abusive

Wow, the article implies that the federal reserve is actually a government institution…..terrible journalism at its worse.

Posted by Bobby | Report as abusive

What is hilarious is that most of the comments on here are a thousand times more informative than this “journalists” article… Newspapers are slowly dying, and this is the reason why. You write good things about the people that pay your salary.

Posted by Mike | Report as abusive

This is absurd. First off, those who provide high volume sites DO pay more – businesses pay on THEIR end to put out the content already. Why should CONSUMERS who already pay, be forced to pay more?

Secondly, packet-switched networks behave differently than circuit switched networks. They don’t experience the same kind of traffic and don’t require the same kind of infrastructure. The internet is NOT a series of tubes that get clogged up! This is an analogy that is used to confuse people who don’t understand the technical details.

Lastly, bandwidth providers, particularly wireless ones, are using PUBLIC airwaves. Therefore, they *must* be regulated if they are to be allowed exclusive licenses. Otherwise, let anyone have access and eliminate the exclusivity.

Posted by neat3647 | Report as abusive

Calling net neutrality laws unfair regulation on the telecom companies is like saying that rape laws are unfair regulation on personal relationships.

Posted by Paul | Report as abusive

This article was written in complete ignorance. Pay no attention to this silly man’s thoughts.

Posted by zan | Report as abusive

James, I think you’ve been bought and paid for. Is that a new car you’re driving there, James? Hmm? I think you’re either corrupt or really stupid. Sorry, arguing against net neutrality benefits no one but corporations who want to be free to loot, pillage, and profit unfettered by the limits that might be placed on them by rational thought, science, humanitarian conscience, and democracy.

Posted by Mark Ellis | Report as abusive

Thank goodness our roads are not run how you are suggesting the internet be run. Imagine if you woke up one day and couldn’t get to the office because your employer refused to be blackmailed by the Transportation Department.

Posted by David | Report as abusive

I don’t know where you’re gettin this crap James. Net Neutrality will make sure things stay the way they are- nice and FREE

Posted by You’re Confused Buddy | Report as abusive

You forget that Net Neutrality is the status quo here. It has been in effect for a while, allowing the internet to get to where it is now. If we start privatizing the flow of traffic, we will end up with another situation like we have with health care. This article is propaganda.

Posted by Andrew | Report as abusive

This article is typical of the “opposition” I’ve seen to net neutrality: missing anything resembling facts and in the end… utter horseshit.

I can’t say for certain that Mr. Pethokoukis was paid to write this article, but it is so fraught with misinformation that it could only have come from telco lobbyist talking points. Just one sentence shows either the utter ignorance of the author or his utter bias:

“One way to pay for them would be to charge higher rates to Google, Amazon and other corporate users who generate huge volumes of traffic.”

Mr. Pethokoukis, have you forgotten that those corporate users DO pay higher rates? Do you really believe Google pays “$20 a month” for their broadband connection? Or (more likely) are you cynically trying to mislead readers through your creative omission of facts?

Net neutrality means simply that if I pay Comcast or Time Warner a flat fee for Internet access, they do not have the right to dictate what I do with it by slowing down or deprioritizing traffic from competing CONTENT providers.

All that is missing from this asinine article is “death panels” and the threat of impending fascism. This is tripe.

Posted by Jim | Report as abusive

Clearly, this guy has been paid off. No other explanation for a usually intelligent person to take a uninformed and ignorant stance such as this.

Posted by Bill Moore | Report as abusive

The internet has and always should be neutral. Anything else is just telecommunication companies trying to create more profit without having to actually change or upgrade their infrastructure now.

Posted by Jon | Report as abusive

How wrong you are. Net neutrality is none of these things. Your “systematic risk” is the threat of court battles? Net neutrality is how we will preserve the free market. This article is just a poorly argued scare attempt.

Posted by Detbar | Report as abusive

This article is wrong on many points.

“The financial crisis should be a potent reminder to communications regulators that the best of government intentions can create horrible, though unintended, consequences. Easy monetary policy by the Federal Reserve, for instance, aimed at countering a recession in 2001, helped create a dangerous housing bubble.”

This paragraph violates one of the basic principles of logic. When making an argument from analogy, the analogous part needs to be relevantly similar. In this case, the author implies that any government interaction in the telecommunications industry is likely to cause problems akin to those during the housing bubble. However, the only major similarity between these two actions would be that the originator is the government. The two situations share little else, and as such, this paragraph is an example of fear-mongering.

“Like physicians and Fed governors, regulators should first seek to do no harm. And that is especially true when they are trying to impose a solution in search of a problem.”

Is this really the role of a regulator? I’m not implying the opposite, but the role of a regulator is to proactively prevent a potential problem from occurring. As such, the author’s quip about net neutrality being a “solution in search or a problem” is simply ignoring the role of a regulator. By definition, a regulator will try and prevent a problem from occurring in the future. A regulator’s job is NOT damage control, it is damage prevention. There is ample evidence that supports the need for net neutrality. Think of the fiascos involving Comcast, Time-Warner, and other ISPs who employ or have employed measures that net neutrality legislation would address.

The next paragraph cites a variety of statistics that are, at best, only partially related to the topic of net neutrality. First, please cite your source of an average broadband monthly cost of $20/month. Does this include all necessary expenses (e.g. a phone line for DSL, cable TV for table)? Even if it does, this price still seems low. Second, net neutrality is not primarily focused on increasing broadband penetration, though this is certainly a part of it. Rather, it is about preventing ISPs from abusing their positions of power to limit or price-gouge access.

Consider the following: an ISP holds the dominant market position in a certain city. One day, this ISP decides to implement a tiered pricing structure based on content and speed, somewhat resembling that of cable TV. Pay $20/month, get slow access to a limited range of popular sites (some news sites, some social networking sites, and perhaps 20 sites of the user’s choosing). Pay $30/month, and your connection increases a bit in terms of speed and content available (most news sites, all social networking sites, 30 sites of the user’s choosing). Eventually, this pricing structure would terminate in a connection equivalent to the broadband connection of today, that is, unfettered access to any content and a connection speed that is directly proportional to your monthly fee. The end result is that the ISP would make significantly more money while delivering less service to users, and potentially have this business scheme backed with the force of legislation.

“Not surprisingly, content providers are in favor of net neutrality…” While this is sometimes true, consider an extension of the situation that I outlined above. If ISPs started to filter content based on which plan you have, they could also force content providers to pay for the privilege of having their content in lower-priced plans. In order for content to reach the most users, the provider would need to pay the ISP a higher fee to be included in the more limited plan. This would be another form of price gouging, and one that content providers would obviously be against. Net neutrality legislation would prevent this from happening.

“Net neutrality is merely another form of rent-seeking that seeks to manipulate regulators for private gain. The goal: Use the FCC to turn the telcoms into highly-regulated utilities that would absorb the cost of future network build-outs — before passing it along to consumers, of course.”

This paragraph is simply wrong. Net neutrality is about regulation, to ensure that ISPs do not abuse the power that they have to artificially increase profits. The FCC is fulfilling its usual role of regulation, not of forcing telcom companies to absorb the cost of network infrastructure improvements.

“…The FCC nonetheless is pushing forward with seemingly little concern about the unintended consequences of intervening in a well-functioning sector vital to the American economy.”

Again, the author has forgotten the definition of regulation. Regulation exists first and foremost to prevent future problems, not to do damage control for current ones. While there are cases when regulation is used for damage control, this is not the general idea. Net neutrality legislation will prevent monopolistic situations in the future, and there is plenty of evidence to show that this is a prudent move.

Posted by John R. | Report as abusive

Nice FUD, Reuters.

“The goal: Use the FCC to turn the telcoms into highly-regulated utilities that would absorb the cost of future network build-outs — before passing it along to consumers, of course.”

What the hell does that even mean? You just contradicted yourself. “[telecoms] absorb the cost of future network build-outs” and “[telecoms] pass it along to consumers” are mutually exclusive.

Also, do some goddamn research before you write. Google pays peanuts for traffic because they have peering agreements with ISPs.

Posted by Josh | Report as abusive

Another paid for article brought to you by AT&T. As for you Mr. Pethokoukis, shame on you for selling out, you are very sad example of a journalist.

Posted by Dan | Report as abusive

The advances in the past decade or so you mention all happened under a ‘neutral’ Internet. High-volume websites do not _generate_ traffic, they _attract_ it. Users go to Google; that is how Google gets so much traffic. The most enterprising companies garner attention. Do you think Twitter would be a household term if it had to pay big bucks as a startup? Bandwidth tiers stifle startups.

James, your understanding of this issue is clearly subpar and you do a disservice to America by publishing your views under the pretense of rationality.

Posted by Well Informed | Report as abusive

You are not popular with this article James. However you can regain it if you were to say, I read up on my position and I’m retarded. Then maybe I’ll keep reading. But short of that, you’re done.

Posted by Kevin | Report as abusive

Unbelievably disappointing. Reuters, leave the corporate shilling to Fox. Your industries failure to properly monetize news gathering will not be saved by dreaming of a future where people have to pay 5$ extra a month to get access to your websites. It will never happen.

Did Murdoch put you up to this?

Posted by Richard | Report as abusive

Thanks for bringing us this perspective, James. Learn some economics, redditors. Don’t call someone a mouthpiece when you yourself are only regurgitating.

Posted by Max Ballenger | Report as abusive

I suggest that, next time, you do some research about this “Internet” before you write a column about it and sound like an ignoramus.

Posted by Geoff | Report as abusive

I can’t emphasize enough how wrong you are on this issue. We need to protect the fundamental tenets of how the internet works, which is what net neutrality aims to do.

Posted by DaftGambit | Report as abusive

This can’t be a real reuters article, can it? Surely this guy just made a blog account with them. I can’t see how else this garbage could possibly have made it past the editors desk.

Posted by Danny | Report as abusive

Mr. Pethokoukis, you sir, are an ingrate to society’s best innovations – not to mention a terrible journalist.

You are pissing in the very same ideals that make a free press possible. Please tell me that you don’t benefit from a free media and that a free internet has not allowed you to write this article and have it disseminated as widely as it has.

Net neutrality is what will keep big greedy corporations from controlling the flow of information, and what will keep world communications from deteriorating back to the stone age.

Posted by Kevin | Report as abusive


The problem with blogs being on the website of a ‘reputable news site’ is that any moron can jump online and write his opinion without journalistic integrity.

You should do more research before writing a blog post that has quite clearly been influenced by the corporations. There’s plenty of useful information out there to give you a balanced view, stop misleading people and have some integrity!

Posted by rush | Report as abusive

Comparing the Fed’s monetary policy that created the “housing bubble” to net neutrality is a lame red herring cast by an impertinent fustilarian.

Posted by ijostl | Report as abusive

The idea is ridiculous. This isn’t about the government regulating the internet, it’s about the government allowing telecoms to regulate the internet.

Look at every country on earth with better internet access than the US. Now look at their policies — no one else gives telecoms a free hand to regulate internet traffic.

It’s amazing how in american politics rhetoric is allowed to run roughshod over facts.

Posted by ryan | Report as abusive

Social comments and analytics for this post…

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Posted by uberVU – social comments | Report as abusive

This is one of the least-informed articles I’ve read regarding net neutrality in a long time. Mr. Pethokoukis, shame on you. You don’t correctly describe what net neutrality is, so how can you accurately form an opinion on this issue? I look forward to next week’s column debating the merits of string theory or your foolproof way of factoring prime numbers instantaneously.

I know they may not have taught you this in journalism school, but being a real reporter entails more than mindless regurgitation of what slick corporate lawyers tell you. Being a real reporter means doing RESEARCH, which you obviously did not do on this article.

Shame on you.

Posted by Arthur Hanna | Report as abusive

This article is misinformed, at best, or willfully deceptive, at worst. Where, exactly, can I find $20/month broadband? I’m paying more now for internet access than I ever have in the last decade, and so are many, many others–you said yourself that broadband adoption is increasing. Where is all this money going if it isn’t being used to expand and strengthen infrastructure?

Net neutrality simply guarantees equal access to any online destination be given to everyone online. That’s it!

James, you should be ashamed of yourself for deceptive fear-mongering.

Posted by Seth House | Report as abusive

In the US, it is the people that have been funding the development of the telco networks via the Universal Service Fund. Congress increased this tax and agreed to allow the telcos to use it, in exchange for delivering fiber to the premises.

Let’s do a little report card:

Qwest – No significant deployment, late to the game
AT&T – has stopped deploying lightspeed, I have fiber to my neighborhood, but they will only sell Uverse TV to me, no internet.
Verizon – Pushing FIOS pretty hard, but on a very limited deployment

So, the people have paid billions of dollars for network development, promises have not been delivered, and now they want to create massive walled gardens, to lock the little guys out of commerce on the internet.

Don’t pay attention to the Google argument, that is a distraction. Google has enough fiber to swap bandwidth with all the Tier 1 providers, they currently do, and will continue to do so.

Net Neutratlity is about making the Internet more like Television. Only the gatekeepers will decide who is allowed to make money.

Posted by Originalgeek | Report as abusive

James, I know it’s awesome to get paid to say shit, but please, know what the fuck you’re talking about before you say it. if you don’t give a shit and just want to get paid, i can give you $20 to post about how great motherfucking stalin was.

Posted by james is an idiot | Report as abusive

The internet’s exponential growth of content and variability is due to net neutrality. Net neutrality ensures that new entrepreneurs can create and distribute “things we have never thought of” on a level playing field as the giants.

Posted by young | Report as abusive

I just don’t understand the argument that free market will make everything work. I think people who are saying this don’t have idea how Internet is organized.

This will never work, because certain companies already monopolized the network.

You might think the Internet is completely decentralized, well organizationally it’s far from it. Certain networks (called Tier-1) are making core of the Internet and all other networks are actually paying for access to them. They have great influence over other network and the only way to become another Tier-1 would require to be accepted by existing networks.

Here’s more information about: ork and a list of who makes the Tier-1.

Discriminating against the traffic will kill destroy the all ideals Internet was created for. There’s no way free market would work in respect to Internet, because there’s already monopoly, which cannot be avoided for technical reasons.

Posted by Derek | Report as abusive

If this were true… why do the telecom companies sue the hell out of little towns and municipalities that have tried to create their own public networks??? These little towns try to do so because there’s one single telecom provider that is holding them hostage and fighting any and all competition. (so much for the free market)

Why would the all the telecom companies scream bloody murder and fight tooth and nail if we, as a nation, were to try to build a nation-wide and publicly owned backbone for the net??? Why? Because they have carved up their little fiefdoms and want to gently be able to squeeze every penny out of anyone that wants to send traffic on it… just like a system of private roads and interstates.

Do you really want to live in a nation where private corporations control all road traffic in your area and how your area interfaces with all adjoining areas? This is really about the basics in life and we as a nation have to decide… do we want AT&T, Blue Cross, MegaCorp to control our water, roads, heath care, air, data/voice infrastructure and trust them (with no democratic way to vote them out) to do the right thing? Because I think we have seen what chasing the bottom line does… and “We the People” will always lose in a race to the bottom.

Posted by Corndogg | Report as abusive

This is just offensive. Where’d you do your research, if at all?

Posted by CK | Report as abusive

You don’t know what you’re talking about. We need Net Neutrality.

Posted by Phi77 | Report as abusive

Jim, I’d probably just lay down and take a nap, it’ll help.

Posted by Franklin | Report as abusive

Anyone who does not completely oppose net neutrality is a corporate shill who lacks the forsight to imaging how devestating its impact would be to humanity

Posted by Dylan Cross | Report as abusive

$20 a month average consumer broadband? In what alternate dimension is that true? That is about the cheapest price for shitty broadband you can find. Cable is at least 50 and resonable dls is 30-50. 20 is a floor, not an average. For it to be an average there would have to be a bunch cheaper. If you can find broadband cheaper than 20 bucks, let me know. Until then, you are full of shit. Cite your sources when you are going to throw out crazy stupid statistics like that so we can have specifics to laugh at.

What a tool.

Posted by truthsayer | Report as abusive

I come to Reuters for news and I go to 4chan for trolls. You should be ashamed of yourself for posting this scaremongering rubbish; how did you get it past your editor? Were they bought off too?

Posted by Marc Hill | Report as abusive

Well, so much for an independent press.

The problem here is that the ISPs have themselves in a bind with the all-you-can-eat pricing plans. If there were graduated prices so that, for example, my gramma paid $5 for hookup and the 20Mb she uses and I paid an additional $20 for the 100GB I use per month, and joe movie trader paid an additional fee for the 100 TB he uses, then the ISPs would be begging us to use more bandwidth.

Mind you, I’m not supporting the half-baked recent attempts by various companies to limit you to 5GB. That’s way too low and there’s no instrumentation as of yet to be able to measure your own bandwidth usage to avoid hitting the cap.

Posted by Jon | Report as abusive

What an absolute stupid article I didn’t expect to come fro reuters. Network Neutrality has to remain in place for an open and fair network that doesn’t prioritise one set of information over the other. Sometimes things are more important than ISPs making profit. Network neutrality is one of them.

Do not fuck up a global network of information because of sheer greed.

Posted by David | Report as abusive

I’m sorry but this article is wrong headed. Net neutrality will cause stagnation from content providers and a restriction in terms of content. Just think, if a service like yahoo was propped up 10 years ago, we would probably still have the same embodiment of yahoo, but we probably would see the likes of google either. Haven’t we learned that government regulation is the wrong direction to take? There wouldn’t be a ‘next bubble to burst’ that are brought on by a combination of legislation and the un-capitalistic meddling of the federal reserve. It’s the only free market that any of us have seen in our lifetimes and because of that it’s thriving and forcing competition. If we take the internet out of our hands and put it in government hands, remember, it will be a long time after we realize our mistake till we can get it back in the hands of the people if ever.

Posted by Gawain | Report as abusive

“Anyone who does not completely oppose net neutrality is a corporate shill who lacks the forsight to imaging how devestating its impact would be to humanity”

You realize that NN takes the power AWAY from the corporations, right?

Posted by Cole Hood | Report as abusive

Lack of regulation must be why US consumers have less internet innovation than Japan, South Korea and Nigerian scammers.

Posted by Dabydeen | Report as abusive


Do you have kids? Because if you do, then you must be really, really stupid. Do you think that getting some money now to publish this nonsense is worth the trouble you are getting your kids in the future due to loosing the only way we have to express ourselves as individuals to the world? Money is not that important you moron.

Posted by MoneyBuysStupidity | Report as abusive

Really? Really? I think you’re missing the point of this entirely. There are some economic implications, yes, but I think concerns over free and equal access trump those.

Posted by Pat | Report as abusive

This guy said it best:

“What an absolute stupid article I didn’t expect to come from reuters. Network Neutrality has to remain in place for an open and fair network that doesn’t prioritise one set of information over the other. Sometimes things are more important than ISPs making profit. Network neutrality is one of them.

Do not fuck up a global network of information because of sheer greed.

– Posted by David “

Posted by Cpl. Gaines | Report as abusive

What a very poor reporter you are…

Posted by bobodamarley | Report as abusive

James, you appear to have accidentally the whole article.

“Net neutrality rules would amount to a federal mandate that broadband providers cannot block or hinder the internet traffic of any web site or service, regardless of whether or not that site or service completes with a similar site or service offered by the ISP itself. In other words, a telco ISP could not limit bandwidth used for Skype VoIP traffic, while maximizing bandwidth available for its own VoIP service”

The internet should be open and available without big brother telling you what you can and cannot see/use. A set of regulations opens the door to raise prices on the already expensive service. From a company’s standpoint, this would be ideal, but America should not cater to a company’s desires since they only have the bottom line in mind.

Speaking of price, how did you conclude that the median cost is only $20? Comcast charges $60 for internet alone. Bundled with cable, the cost drops to $45. With phone, it most-likely drops further, but that is not the true cost of the service.

At the very least, misinformed or monetarily persuaded journalists will continue to skew the facts. Now there’s your systematic risk.

Posted by Jason | Report as abusive

The Fed is not a government institution, dumbass.

Posted by john | Report as abusive

You (writer) are ignorant and a fool

Posted by noneofyour beeswax | Report as abusive

”One way to pay for them would be to charge higher rates to Google, Amazon and other corporate users who generate huge volumes of traffic.”

Another way would be for ISPs to make deals with corporate giants, and throttle Peer to Peer networking–you know, like they already do.

Posted by Alex Vance | Report as abusive

Would you work for free? If the corporations don’t make money, they won’t innovate or they will get out. Screwing others is not any sort of way to get them to do more for the public good. Just saying.

Posted by Jeremy Nicoll | Report as abusive

The author clearly has no idea what net neutrality actually is. Net neutrality is the digital equivalent of anti-discrimination laws.

I especially liked this ridiculous quote:
“But future network upgrades to handle high bandwidth applications will be costly. One way to pay for them would be to charge higher rates to Google, Amazon and other corporate users who generate huge volumes of traffic.”

The billions of dollars that people spend on internet access each *month* might help with that, just maybe?

Posted by Toasty | Report as abusive

Social comments and analytics for this post…

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Posted by uberVU – social comments | Report as abusive

You are proposing that it’s okay for USPS to charge you for sending your letter, and then charge some of the people who receive that letter, at entirely your own discretion. The next Google might not be able to provide its innovative service to the world if ISPs are permitted to discriminate against their traffic and only provide access to the current Google, which can afford to pay for network visibility.

Posted by PatrykD | Report as abusive

What ever the justification the corporations spit out the one thing that won’t change is that the Internet is a vital transport system for information that is used and needed equally by everyone.

The technology has become a necessity. As such neutrality makes it possible for EVERYONE to use the Internet and have an equal presence on the net with everyone else.

There is nothing good that will come from taking away the ability of the average citizen to have an internet presence, or to surf the web.

The idea of free and equal access is far too important to give way to some childish desire for profit.

And it was the UNIVERSITIES like MIT that created the Internet, not corporations. Corps advance the technology for their own profit and that’s fine. But there is no way they should be allowed to hijack the whole system just to turn a buck. They can make a profit with net neutrality in place. The only reason to get rid of net neutrality is so that AT&T and their kind can squeeze more money out of the average citizen just for doing the things they need to do to improve their business anyway.

The business sector used to talk so boldly about what a powerful force it is. But in the past few years these same “survival of the fittest” idiots have come to the government with their tails between their legs to beg for money from the people. They lobby and make secret deals to grease the palms of politicians that are willing to sell out the mandate of the people that elected them into office.

All this so that they can have a little extra silver cross their palms.

Net neutrality protects the citizen. Any one who does not understand this would do well to read up on the subject. If you give up the only protection you have, then you deserve every bit of suffering you get for believing thieves and liars.

Posted by Benny Acostas | Report as abusive

Look at the open source movement and apply the same principles to technology.

The old saying is that “necessity is the mother of invention”.
These days people would like us to think that profit is the mother of invention. That is not correct.

Work is done to solve a problem or to fill a need. Profit as a motivator distorts the situation. Problems become opportunities to profit, but never become anything more than that. There is no need to recover the costs of building out new infrastructure directly by the builders because the amount of total business generated over those lines will allow all business to flourish across the board. This will more than make up for the individual costs of building out.

Businesses think only of their own survival and prosperity. They care nothing about the citizen. You are a wallet to them. That’s it. And if that wallet is empty then to hell with you.

So let the telcos bitch all they want. They only bitch because they want to be paid. And they are only too happy to ask for bail outs and other support from the very people they intend to gauge. We citizens have propped up a failing economy done in by liars and thieves of all sorts. We have had no bailouts. But we are expected to carry the burden for those that eat better and live better than we can afford to do.

And now we get more arguments from these profiteers that suggest that we should give up EVEN MORE by relinquishing the only consumer protection that keeps our Internet access open equally to all destinations.

Our money is worthless. And it’s business that has most of it anyway. So they can pay out to build for us. It’s not like we haven’t paid, gone without health care, gotten evicted from our homes, and been denied educations so that corporate America can profit.

It’s our time now. More and more people are waking up to the constant line bull shit being spewed on us and we aren’t accepting it any more. The many posts on this subject alone should be an indicator of this.C

Posted by Benny Acosta | Report as abusive

What an awful article. You basically just pose questions and make conclusions without showing any proof, or even any theories to support your arguments. This is just a terribly written article.

And your argument sucks and is stupid.

Posted by steve | Report as abusive

I hope the author got a good payout from whatever ISP or TelCOM company he chugs pole for.

One of the biggest factors in “broadband” becoming cheaper is the definition is being changed, but the author prefers to mislead people.

Basically instead of everyone getting access to cheap cable modems, which is what people think of as broadband, jerkoff corporations try to define DSL and other crap internet that are slightly better then dial up, as broadband.

Nice work around.

Watch out too because McCain is trying to destroy net neutrality as well.

Posted by Moose | Report as abusive

This is a vast oversimplification of the forces at play here. The author acts as if allowing ISPs to regulate the content will leave the internet as it normally is. In Australia we already have metered bandwidth, with certain sites not counting towards that bandwidth in an attempt to encourage them. It blows.

Posted by Aussiemoo | Report as abusive

Telcos/isps are actually lobbying politicians to stop net neutrality from seeing the light of day: rprise_mccain_biggest_beneficiary_of_tel coisp_lobby_money.html

This is from a guy who doesn’t even know how to use a computer.

How is it best for people if there is no regulation of the big boys? We’ve already seen what a “market failure” is with the banking industry. Regulations were ripped down; the destruction of the Glass-Steagall is a prime example of this. Contrary to popular belief (this fallacy is also mentioned in the article) the FED is not government body; it is a privately owned organization owned by private banks. Alan Greenspan has admitted to this.

Check your facts Pethokoukis.

Posted by Bob Zinger | Report as abusive

Article author is a corporate shill, otherwise the article makes no sense.

Posted by Teacher | Report as abusive

I have to admit that I have read Mr. Pethokoukis’ blog several times to try to understand his points. His statements show a lack of understanding of the issues as well as not understanding of how business models are changing due to the Internet.

The issue at hand is the ability of service providers to use technology to control the consumer’s experience while using the Internet. For example, certain providers slow down their competitors Internet Phone (VoIP) service using what is know as “traffic management”. While there are benefits to “traffic management”, the issue at hand is that it needs to be applied in a way that is service provider neutral.

Mr. Pethokoukis refers to consumer choices. While having choice among who delivers your Internet connection is certainly good, it is choice of content that is the focal point of this discussion and in fact the value of the Internet is to enable consumers to access a diverse set of content.

The telecom business has evolved over the past 100 years to meet changing consumer demands and competition. This has meant that telecoms needed to evolve their business models to adjust to geometric rises in demand, predatory pricing strategies and changing network traffic from voice to data.

Having spent most of my career building networks and developing business models for networks, I will say that keeping the Internet open will not lead to all the doom that we hear and read from people like Mr. Pethokoukis. I will say that telecoms will need to evolve to compete; otherwise they will be relegated to become just a low margin utility that passes high margin content over their “network plumbing”.

But, of course this is not the first time the telecoms have faced this challenge and they have been bruised a bit but still remain in business and very profitable.

Posted by Tom Golway | Report as abusive