Justice Department: We don't Need No Stinkin' Network Neturality

15 Comments

The Department of Justice, normally a staid, even boring department of the U.S. government, is not known for issuing colorful press releases. But today, the DOJ issued a press note in which it came out against network neutrality and argued that the broadband service providers can charge extra for prioritizing web traffic. The DOJ also filed a late notice to this effect with the Federal Communications Commission.

“Consumers and the economy are benefitting from the innovative and dynamic nature of the Internet,” said Thomas O. Barnett, assistant attorney general in charge of the DOJ’s antitrust division. “Regulators should be careful not to impose regulations that could limit consumer choice and investment in broadband facilities.”

It is strange logic — most believe that the U.S. broadband duopoly is one of the main reasons why some of the more innovative and dynamic services aren’t coming to market. The seemingly politically motivated arguments being made by DOJ’s Barnett read oddly:

The Department also noted that differentiating service levels and pricing is a common and often efficient way of allocating scarce resources and satisfying consumer demand. The U.S. Postal Service, for example, allows consumers to send packages with a variety of different delivery guarantees and speeds, from bulk mail to overnight delivery. These differentiated services respond to market demand and expand consumer choice.

Yes, but there are other options — namely DHL, FedEx (FDX) and UPS (UPS). And we are free to choose. (I wonder if the U.S. Postal Service would have delivered different service tiers had there been no free market competition.) I think the whole broadband and network neutrality argument should be viewed from the prism of competition.

Cynthia Brumfield sums up this press offensive best.

It’s possible that the inherently free-market thinkers that typically populate the antitrust division find the imposition of regulations in the absence of any evidence of market harm so loathsome that DOJ feels it necessary to skip all the tedious intellectual back-and-forth. That’s understandable, but somewhat disappointing.

15 Comments

Robert Berger

For those of you who think there is a “choice” in broadband markets, I say “Ha!”. (and then I start sobbing)

I live in Saratoga, CA. Part of Silicon Valley. I and my neighbors can not get ANY DSL or ANY Cable Modem service, No consumer wired/fiber option at all. Zilch. And this is in Silicon Valley, CA USA.

The triumph of tha TelcoCable RIAA-MPAACo Military Post-Industrial Complex is almost complete. Ultimate Power is within their grasp. The complete control of media and thus the world of iedas of the masses. Are we going to let them get away with it?

batman

Thomas,

The electric utility is a good comparison. Perhaps this models the situation in which case the solution could be a legislative compromise in which the ISPs and the tier 1 backbone providers are only allowed to charge for the quantity of packets uploaded and downloaded but not allowed to charge for the identiy of the packets. We’re on a slippery slope with the current legislation opening the door to outright blockage of any URL according to political whim. That is the real danger here. Lets adopt that compromise and avoid outright packet censorship.

Thomas

The idea that carriers won’t invest in networks if they can’t charge exorbitant rates for them is false. Look at Japan and other Asian countries where very high broadband speeds are made available for $14/mo(ish). The reality is that broadband access should be a utility just like electricity, water and roads. The value to society goes up with making it freely and widely available; it does not go up by corralling all monetary benefits to a few carriers.
Broadband is not rocket science. There are a lot of technology providers willing to provide the technology at a reasonable price. What we need is real competition. Right now, I can only get broadband from AT&T or Comcast; and this duopoly has been raising my prices for years.

Jesse Kopelman

Tom Coseven, I hope you know better and are just joking. Don’t you remember what the USPS was like prior to emergence of FedEX and UPS?

Josefritz

I’ve come to accept the fact that the current administation at each decisive junture will select the position that causes the greatest reduction in freedom, happiness, and civil liberties possible. They are diametrically opposed to the values that make net 2.0 work: equal access and consumer involvement.

LookMaNoHands

Larry Dignan has this about right at ZDNet: “All the DOJ said is that imposing Net neutrality could deter investment in networks. If there’s no profit motive why would you bother building a Wimax network, FiOS or any other broadband service?”

And this is good too: “When it comes to Net neutrality repeat after me: Congress will screw it up–big time. It’s a given. … Trust the FCC and DOJ to do its job until proven otherwise. Fixing a problem that doesn’t exist is a disaster waiting to happen.”

I work with the Hands Off coalition — we have a blog post on this at our site (linked behind my handle) as well. The DoJ is right — antitrust regulation is enough to handle any problems, and what few issues there have been, the FCC has slapped down. And there’s something to be said for public shame.

Andrew Z

Moritz’s comparison is right. Net neutrality boils down to not discriminating on whose packets are being transferred, not the level of service for transferring those packets.

Either the government is deliberately obfuscating the issue, or the free-market ideologues are in charge. I suspect it is both.

Moritz

Tmiothy, what do you want to say with that?
Do you think it is the fault of Net Neutrality that broadband networks in Russia are not yet that well developed?
Why would developing countries be good examples for net neutrality?

Net Neutrality as a principle has been basically adhered to by all providers up to now. Thanks to net neutrality a massive number of small companies can develop new services. If ISPs actually start to treat traffic by its content expect thing to happen like:

  • New search site being incredibly slow on your ISP for no reason
  • One ISP only supporting Skype, the other doesn’t support Skype at all
    -ISP wants to make money with his own IPTV service -> blocks Zattoo and similar services

etc. etc.

Timothy Post

You want “net neutrality?” Move to Russia (or any other developing country for that matter).

Here’s my choices.

Get unlimited bandwidth usage with super slow 128K speeds.

Get broadband speed but pay for bandwidth usage through the nose (e.g. pay a couple bucks for a 10 minute Skype video call. Skype is considered a download. Pay almost as much in bandwidth for an iTunes download as the cost of the song…. think about that for a moment. YouTube? Forget about it.).

This set-up not only puts a big crimp in my surfing habits but ultimately depressing the web industry here. What’s the point in developing a Flickr if nobody can afford to use it.

Perhaps the only silver lining to the implementation of net neutrality is that it would make the profit opportunities that much higher for wi-max.

Please say it’s all just a bad dream.

Will Wheeler

If anyone has any doubts about why we need net neutrality, they need to look at Verizon Wireless’ terms of service.

For a long time they sold “unlimited” access over their evdo cards. However in the fine print it said if you go over 5GB per month we ASSUME you are using it for prohibited purposes. Namely streaming video, audio, downloading music, and web hosting.

Now, Verizon also sold access to their videos and audio delivered over the same network. So, if you want to access other content besides what we supply you have to pay more.

Do you people really want this for your internet? If you don’t you better get out there and support net neutrality.

Moritz Mihatsch

Well. But is that really the point?
I think the point should go something like this:

Consumers already have the choice of getting their packets overnight (broadband) or bulk (modem). And the same goes for companies and they can get a lot of bandwidth for their servers or abstain.

Net Neutrality for the postal system means that if I pay for overnight I get my letter delivered overnight no matter if it is a personal note or a business letter. The same I expect from the series of tubes called internet. If I have a broadband connection I should get any IPTV offering at the speed I pay for, not at the speed my ISP chooses.

Tom Coseven

Om, do you really believe that the USPS would not be allowed to ship priority if UPS and FEDEX didn’t exist? I think you know better.

Chris

How many broadband options do you have where you are located right now? My guess is you have far more options for broadband then you have for shipping packages. I know sitting in Salem, Oregon population 150K that is the case.

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