Blog Post

Silicon Valley, Wake Up and Smell the Net Neutrality

Susan Crawford

The issues of network neutrality and broadband reclassification are big ones for Silicon Valley, but you’d never know it given the head-in-the-sand response from certain executives whose very livelihood depends on their ability to send whatever content they develop to millions of consumers over broadband pipes. Admittedly there are some ardent supporters of network neutrality who think having regulations that forbid ISPs from discriminating against lawful traffic is a good thing, but overall, the region’s response to net neutrality is pretty lame. And few even understand the current efforts to neuter the FCC through the broadband reclassification fight.

Yet interacting with the government, however flawed it may be, is important. The interests of telecommunications and cable firms is not in innovation — it’s in milking big profits out of their existing infrastructure while making minimal investments. That’s the antithesis of innovation. These guys have read the “Innovator’s Dilemma” and realized they didn’t have a dilemma because they own expensive infrastructure that others can’t easily duplicate. Their response didn’t have to be innovate or die, because if push comes to shove, they can kill problematic services through pricing, lawsuits or obsfucation.

And I can assure you the telcos are treating net neutrality and the reclassification debate it as if they were at war. Which means that if Silicon Valley doesn’t show up to fight, Washington is going to buckle. Susan Crawford, a professor at the University of Michigan Law School who co-led the FCC Agency Review team for the Obama-Biden transition team, spoke on the topic last week. She detailed the lobbying spending by ISPs and the impact of the Comcast (s cmcsa) merger with NBC (s ge) on online video, and begged Silicon Valley to not take open Internet access for granted. It won’t be the last time you hear you someone do that.

Want to get educated on the topic? Here’s a good list of stories to help:

Comcast vs. FCC: Federal Court Questions FCC’s Ability to Regulate Broadband

How the FCC Plans to Regulate Broadband

Why Net Neutrality Is Too Important to Leave Up to the ISPs

The New Net-Neutrality Debate: What’s the Best Way to Discriminate? (GigaOM Pro sub req’d)

16 Responses to “Silicon Valley, Wake Up and Smell the Net Neutrality”

  1. The Communications Act is the legislation in which the Congress directs the FCC regarding its duties. It’s interesting to note that nowhere does the Act tell the FCC to go forth and regulation Internet services or broadband networks. Don’t take my word for it, go read it yourself:

    Search for words like “broadband,” “DSL,” and “Internet” if you don’t have time for a full read. The search results will show why the Congress needs to act BEFORE the FCC goes nuts with new methods of broadband Internet regulation.

  2. Despite the old saying, “I’m from the government and I’m here to help you,” Americans need help from Congress before the Federal Communications Commission makes a huge mistake and reclassifies broadband as a “telecommunication service,” leading the way for disaster. Internet innovation would be hurt, some Americans would not be able to get good broadband service, and the pricing would go through the roof. Congress should be involved in this decision that will so vastly affect our nation.

  3. Silicon Valley content creators should absolutely get involved in the Net Neutrality debate; however, they should do so in an informed manner. Cable and Telecom companies invest a significant amount of money, multiples of what the government has been able to contribute, to improve the infrastructure so that users can connect with content. Further, while I agree that some oversight of the Internet is necessary, rather than going forward with an uncertain reclassification approach, Congress should settle the issue by granting the FCC limited authority to regulate the Internet.

  4. I think these few comments suggest why valley guys don’t talk much about the issue. Net regulation or lack of regulation has been defined as a political or financial issue divorced from the reality of the underlying infrastructure.

    Plus what’s with these guys here that seem to equate ISPs solely with the wireless carriers. Yes, the wireless guys are making big capital expenditures currently but if wireless transmission is expensive then the service is priced accordingly, nuff’ said.

  5. I am a bit torn on this issue — subscriber’s need to be protected that should never be debated. The question then becomes — how is the subscriber protected without smothering the internet service providers or the communications service providers with bureaucracy?

    It is sad that Silicon Valley does not seem to be taking this issue more seriously but how then would they? There would need to be an organized effort amounts not only all of Silicon Valley but Silicon Alley and any other tech company. That is a fairly monumental task

    ISPs have a leg up in this fight — deep pockets, a long history of lobbing Washington and now the newly formed broadband technical advisory group.

  6. Jonathan

    ‘Net Neutrality” is insanity. I don’t see how you can possibly believe that adding massive bureaucratic oversite to mobile and internet services is going to make them faster, cheaper, or better. The very innovation and risk-taking that thee industries thrive on is anathema to bureaucracy in general and government bureaucracy in particular.
    If you want to guarantee that “the way it is done today” is set in stone for all time just get the government involved.


  7. The problem is how you define “net neutrality”.

    If you mean open pipes that prevent an ISP from discriminating against certain data, then I am all for that. However, the Obama administration has co-opted the term net neutrality with the intent of implementing a fairness doctrine on the Internet. If I had to choose between the two visions, I would prefer pricier throttled Internet to an FCC regulated Internet.

  8. “The interests of telecommunications and cable firms is not in innovation — it’s in milking big profits out of their existing infrastructure while making minimal investments.”

    This sentence’s logic is as bad as its grammar. The money that comes out of business is related to the money and innovation that goes into it. Granted, the networks aren’t nearly as profitable as the ad sellers, but they’re certainly not shy about investing in their networks. In 2008, the mobile operators invested $20B in upgrades and spent another $20B on spectrum licenses. That’s not small potatoes in anybody’s cook book.

  9. Shawn

    Would you call 19 billion in Auction 73, billions in acquisitions, and billions more in the construction of HSPA +, Wimax, and LTE infrastructures a minimal investment? I believe carriers are in a difficult position to amoritize their previous investments because they just forked up the funds for 3G and now demand is pushing them to 4G.

    You stating the carriers are making the minimal investment with the only objective of profits is brainless pandering. There has been more innovation and growth in this industry than any other industry in this country.

    Net Neutrality will only stiffle private investment in wireless infrastructure and will make tackling the present issues of data demand extremely difficult. Furthermore, discriminating against “lawful traffic”, or in other words, preventing carriers from deciding who they want to do business with isn’t just potentially damaging to networks, but it also contradicts the basic property rights we take for granted. The solution is less regulatory interaction and one or two more strong competitors in the market that will spread the subscribers out.

  10. This is a good wake-up call, a good call to arms.

    I will commit to write 5 messages to my elected representatives over the next 2 weeks. Anyone else?