Parks Associates Blog

Wednesday, April 07, 2010

FCC and the Thin Line of Net Neutrality

A federal appeals court has determined that the FCC does not have the authority to enforce net neutrality. Who wins and who loses? In theory, the broadband communications service providers are the big winners here – enabling them to adopt tiered pricing such that heavy video or media users will likely pay more for broadband than grandma, who typically uses broadband to check email, perform some light surfing, or occasionally download a few photos. Tiered pricing will cause the big users to pay more when they receive more and will provide incentives for communications providers to build larger pipes to feed the big users. It seems that this will create more profits, more competition and eventually more tax revenues. To me it sounds like the ”invisible hand” fast at work.

The downside, of course, is that grandma’s YouTube or Hulu usage experience may be compromised, causing her to think poorly of media rich sites which may jitter, download slowly, or be simply off limits unless she is willing to pay a premium fee. Looming larger, however, is the increasing digital divide, limiting access to markets, information, research and entertainment by those without the means to buy higher speed broadband.

Free markets, most of us agree, require some degree of regulation. The FCC must have some power to require subsidized service to rural markets or to provide basic, low-cost broadband access to the economically disadvantaged or to those that simply don’t want more. Perhaps this week’s court ruling is merely just a redrawing of the fine line between free enterprise and limited regulation. Proposing a re-classification of broadband as "telecommunications" under Title II of the Telecommunications Act of 1996 is simply gerrymandering.

We the People have determined that it is the inalienable right of every U.S. citizen to vote, to have a public education and now health insurance. Is it every American’s right to have low-cost access to high-speed, high-quality Internet video?

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