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Originally published Saturday, May 3, 2014 at 8:02 PM

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Why net neutrality matters to the little guy

The open Internet has been critical to fair play in an environment where most companies and individual customers are at the mercy of de-facto monopolies


Special to The Seattle Times

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@pdc What will fix this regulatory issue is not allowing former industry lobbyists like Tom Wheeler to head the FCC. ... MORE
Unless you own a lot of stock in one of the major ISPs, net neutrality will only benefit you. Seriously! MORE
Wait a minute!!!! Are you suggesting that the largest, most profitable companies in the U.S. might NOT be truly... MORE

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Imagine if the mid-1960s television series “The Time Tunnel” had represented reality.

The scientists of 1964 could have snatched an office worker from 1914 and placed him in a similar environment 50 years hence. There would have been more women there, but otherwise our time traveler wouldn’t have been very disoriented.

Typewriters still ruled, although many would have been electric. Communication was handled much the same way as in 1914. Yes, telephones now had dials but the U.S. Post Office was still the backbone of transmitting information. Important messages still came by telegram, sometimes still sent from the Western Union offices at railroad depots.

Memos were often written by hand. Large corporations used computers, but they were room-sized affairs. Average businesses did double-entry accounting by hand on ledger books. Plans for advanced machines still originated with the hand-drafted plans of engineers.

But a time traveler from 1964 transported to today, even armed with all her science, would be at sea.

She would find cellphones that had as much computing power as that huge machine of a half century before. All the functions of the office, commerce, research, development and design are built around the Internet, or the “series of tubes,” as the late Alaska Sen. Ted Stevens put it.

Many of her new co-workers are more likely to shop, interact with friends and find entertainment online as with physical stores or on network TV, much less with what they call “snail mail.”

This is why the issue of net neutrality, or the open Internet, is of such critical importance. That it is under siege from powerful companies that want to change the system for their own profits is about much more than nerdy esoterica. It cuts to issues that range from rising inequality and regulators captured by the oligarchy to the slow-growing economy.

Late last month, documents were leaked to The New York Times indicating that the Federal Communications Commission (FCC) plans to propose rules that will change the Internet as we know it. If enacted, they would essentially let big Internet service providers (ISP) charge preferred content providers and other customers for faster service.

Thus, websites with deep pockets (think Amazon) would get the fast lane while others languish at slower speeds. Netflix is signing an agreement with Verizon for direct access through its network because it fears just such an outcome.

The news upon which an informed citizenry depends could be affected, too. One outlet could pay more for exclusive priority while others load much more slowly.

FCC Chairman Tom Wheeler has vehemently denied that the proposed rules would be anti-open Internet. They must be rewritten after earlier ones were botched and struck down by a federal court.

There is reason to be skeptical. Wheeler is a former president and CEO of the National Cable and Telecommunications Association (NCTA). He also led the Cellular Telecommunications and Internet Association. Both are powerful industry-lobbying groups.

Michael Powell, FCC chairman under George W. Bush, is now leader of the NCTA and has vowed ”World War III” if the regulators attempted to classify broadband as a common carrier telecommunications service.

It is a war worth fighting.

The open Internet has been critical to fair play in an environment where most companies and individual customers are at the mercy of de-facto monopolies, such as Comcast, AT&T, Time Warner Cable and Verizon. Comcast is proposing to acquire Time Warner Cable, locking up even more power.

A warning of unfettered monopoly is shown in the fact that the United States has only the world’s 14th fastest broadband service, according to a report last year from Akamai Technologies. Hong Kong is No. 1, followed by South Korea, Japan, Latvia and Romania. American exceptionalism, indeed.

Americans pay more and get less, a point argued by Susan Crawford, of Harvard, and author of “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.” The monopolists have also fought efforts by cities to build their own broadband.

The Internet was developed in part with heavy investment by American taxpayers, even though the wonder-boy libertarians in Silicon Valley believe they thought it up.

As shown in the thought experiment above, it has become essential to every aspect of American life. Yet a few service providers have a chokehold.

Wheeler’s promise that the ISPs would be held to ”commercially reasonable” tolls, at least for a time, is not reassuring. Least of all to a startup on a shoe string.

The time travelers would understand the situation. It happened with railroads and electrical utilities. Both argued that they had built their systems and should be constrained only by market forces. But monopolists don’t operate in a free market. They spend their influence and treasure to ensure a gamed one.

Both railroads and utilities were eventually regulated for the common good.

This battle encapsulates much that challenges America today: highly concentrated industries with comfortable dominance and high entry costs against real competition. Job creation, innovation and competition suffer, and with it the dynamism that would ease inequality.

There’s also the unseemly revolving door between industry and regulators that produces a toxic, self-serving elite.

This would be a good time for President Obama to make good on his 2008 campaign pledge to Internet neutrality. If he fails, we won’t be able to travel back in time to undo the damage.

You may reach Jon Talton at jtalton@seattletimes.com



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About Jon Talton

Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest
jtalton@seattletimes.com

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