Internet Public Policy Issues - The American Consumer Institute

Today’s DC appellate decision on “Net Neutrality” is a victory for Internet users.  After years of regulatory interference, today’s court decision takes a consumer perspective by allowing Internet service providers (ISPs) to treat different levels of bandwidth consumption differently.  ISPs are now free to re-engineer Internet services to accommodate customers’ radically different needs for performance and speed, and to price them accordingly.

The majority of Internet customers have simple needs such as to check their email, browse recent news, interact on social networks, or do a little shopping online.  Given their modest needs for bandwidth and their low throughput volume, they are rightfully irritated by slow downloads and prices that don’t reflect their modest use.  Indeed, on today’s Internet service, slowdowns are likely caused by users who demand massively more bandwidth and throughput than all the regular users.

There are classes of Internet users who want premium, hyper-fast services attuned to movie downloads, or engineered for employee intranets, or ideal for massive multiplayer online games.  Engineering a network that better accommodates premium services like those will cost more than setting up a conventional network.  And it costs more just to keep those who demand massive bandwidth from damaging the experience of those with modest needs.  

Until the DC Appeals Court’s decision, an FCC rule prevented pricing of services according to the level of bandwidth and throughput that they consume.  Since the ISPs were barred from recovering the cost of premium Internet services, almost none were built.  That will change.

It is unclear why the FCC hung onto its anti-innovation position favoring Net Neutrality.  It is unclear clear why the FCC rule was favored by those using the Internet to deliver massive bandwidth products and “spamalot” operations without regard to the effect on Internet experience for everyone else.

Now let’s hope the FCC does not make any further attempts to regulate broadband services, particularly with 1930s-era style common carrier regulation.  That result would only further stifle innovation and investment, and leave consumers much worse off in the end. 

Alan Daley is a retired businessman who writes for the American Consumer Institute Center for Citizen Research