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The Argument Against Net Neutrality


Why Washington should leave the Internet to the market.

The Federal Communications Commission is expected to vote Thursday to draft "net neutrality" rules that would prohibit Internet service providers from slowing or blocking content on their networks.

The Consumer Federation of America and Consumers Union, publisher of Consumer Reports magazine, say the new rules are needed because Internet providers "will constantly invent excuses to exercise their market power to undermine competition and limit the freedom of speech."

In a furious lobbying war, the proposed rules have pitted service providers such as AT&T (T), Comcast (CMCSA), and Verizon (VZ) against companies like Google (GOOG), eBay (EBAY), and privately held Craigslist. But Microsoft (MSFT) and Yahoo (YHOO) have withdrawn from a group that was formed about two years ago to push the proposal, and signed deals with phone and cable companies.

FCC Chairman Julius Genachowski says the agency would become the "smart cop on the beat" and act to maintain an "open and robust Internet." Without governmental oversight, Genachowski says, "We could see the Internet's doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised."

That's unlikely. In any case, Genachowski is arguing for the policy of his choice. What's unclear is how the federal agency would respond to a lawsuit and how the proposed rules would withstand judicial review.

But what's clear is that the proposed FCC rules are a horrendously bad idea because governmental interference in the Internet would almost certainly limit profits and therefore reduce future investment in broadband, degrading the Internet for all users.

The idea for net neutrality dates back to the days when operators placed telephone calls by hand. The country's long-time phone monopoly, know affectionately as "Ma Bell," and its regional successors were prevented from giving preference to the handling of any public phone call. During the 1990's Internet boom, most Internet content traveled over phone lines and the concept of network neutrality survived Democratic and Republican administrations in the absence of a better idea.
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