In Print

Tightening the Net

By Kevin Steel ⋅ June 19, 2006 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

The U.S. Congress aims to put limits on the Internet’s free market model

Every year it gets bigger. Last year, the global online population of the web grew another five per cent, according to an Ipsos Reid report in March. In 2004, it leaped 20 per cent. Everywhere, people are warming to the web for business, shopping, entertainment and communication. The best part? Nearly all of it’s happened without any government involvement. Of course, it couldn’t last.

On May 26, a U.S. House of Representatives committee approved the Internet Freedom and Nondiscrimination Act, which is now awaiting action from Congress. The bill aims to put limits on the Internet’s free market model, by requiring broadband providers (the folks who own all the transmission lines) to exercise “Net neutrality.” If that happens, AT&T, Alcatel and other telecom owners will be forced to treat all websites the same–from biggies, such as Amazon.com, to your sister-in-law’s David Caruso fansite–when it comes to charging for access to their wires.

In just a few years, Internet users have gone from downloading primarily text-based pages to huge music and video files, and even using the Internet to make phone calls, while cable and phone companies have been running bigger wires to keep up. Instead of passing the whole cost on to consumers, some firms want to charge the e-corporations benefiting from those networks’ higher prices for better service–similar to the way grocery stores charge manufacturers to get better shelf space. As Ed Whitacre, CEO of SBC Telecommunications (which owns AT&T), asked Business Week in November, if Vonage wants to sell a phone service over the Internet, “Why should they be allowed to use my pipes?”

But advocates for Net neutrality say that if some sites end up buying better service, others will, naturally, receive poorer service, hurting the small e-businessman. “The Internet is the best example of the free market that we have,” says Maura Corbett, spokesperson for the It’s Our Net coalition based in Washington, D.C. “So anyone with a great idea could go on the Internet and then the users decide–as a free market should work–whether the stuff’s good or not.”

But cable and phone companies built the infrastructure that permitted such small upstarts as EBay and Google to prosper in the first place, argues Chris Wolf, a Washington-based Internet lawyer and co-chair of Hands Off the Internet, a coalition of cable and phone companies. “Don’t hamstring the people who are going to build up the Internet at the starting gate, because the unintended consequences may be a delay in the build out or the entire cost being borne by consumers,” says Wolf. Besides, he adds, “The government is not equipped to architect, manage traffic on, or price the Internet.” Maybe. But that’s never stopped politicians from trying to manage industry before.

[This article appeared in the June 19, 2006 issue of the Western Standard.]