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Eyes in their ankles - the congressional view of network neutrality

By Scott Bradner

For quite a while I have been baffled by the inability of too many members of congress to understand the importance of the network neutrality discussion. I'm not satisfied that I know for sure but I think I may be getting closer.

Let me start out by saying that I'm not all that much of a fan of regulations for the sake of regulations. I believe there are cases where regulations are warranted, prescription drugs for example, but many other cases where regulations have proven to stop any meaningful progress. Most of the regulations empowering AT&T when it was a monopoly were of the latter type. But I feel that regulations requiring carriers to treat their customers fairly are likely to increase progress rather than limit it.

Some of the people who object to what the FCC is doing claim that the FCC does not have the authority under the law to make any rules about Internet network neutrality. I think this is a legitimate objection. (see http://www.networkworld.com/columnists/2009/102809-bradner.html)

Others claim that there is not a problem to fix since all the carriers, telephone and cable, have been exemplary Internet citizens and have not done anything anyone would call bad. This is demonstrably wrong - see http://www.networkworld.com/columnists/2007/103007-bradner.html and http://www.networkworld.com/columnists/2008/040108bradner.html)

But these are not the reactions I'm most concerned with. Too many in congress, and elsewhere, see that any attempt at ensuring network neutrality will, in the words of Sen. John McCain (R-AZ) "stifle innovation, in turn slowing our economic turnaround and further depressing an already anemic job market." (see http://www.dailyfinance.com/story/net-neutrality-john-mccain-says-no-glenn-beck-sees-a-marxist-p/19206288/) This type of reaction only makes sense if someone has absolutely no idea how the Internet works or what it is used for.

The only way such an objection makes sense if you only look at the carriers and assume that they will be worse off if they cannot get a piece of the action for the business that is done over their networks. So, the argument must go, let the carriers control everything and they will create jobs and expand the economy.

Lets look at some actual data from the US Census Department. (http://www.census.gov/econ/estats/) Total US commerce in 2008 (the latest year reported on) was about $22 T. Of this about $3.7 T was in the form of e-commerce, mostly over the Internet. Most of this (92%) was business to business. Doing business over the Internet depends on the Internet working and working fairly. What about the carriers? The National Cable & Telecommunications Association reports that the total cable company customer revenue for 2008 was about $85B (see http://www.ncta.com/Stats/CustomerRevenue.aspx) and the FCC reports that total US telecommunications industry revenues for 2008 was $297B. (see http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-301407A1.pdf ) Thus, total carrier (cable + telephone) revenue was about $382B or about 10% of the value of the business done over the Internet. Commentators that focus on the wellbeing of the carriers are ignoring the vast majority of the value of the Internet. They want to penalize the 90% to benefit the 10%.

This is an inability to see the value riding over the net - which is the same thing as having your eyes in your ankles pointing down so they can only see strips of asphalt and miss the cars and trucks riding on the asphalt. But the main problem may be that many of these people can only see "things." They see physical wires and cables but cannot see, so do not recognize, the non-physical traffic using those wires and supporting close to 20% of US commerce. They focus on the jobs in the carriers installing the wires but ignore the vastly greater number of jobs created by those using the wires because they cannot see the communications flying by.

If you work at a company that uses the Internet to sell to customers or to buy from suppliers you should care about the net neutrality discussion.

disclaimer: Harvard uses the net a lot but, as far as I know, does not have ankles to house its eyes, or for that matter, eyes to be housed so the above is my own guess about virtual blindness.