Monday, May 19, 2014

FCC and net neutrality

The FCC made news last week when it issued a new set of regulatory guidelines that would allow broadband companies to charge content providers for faster access to customers.  In the "I could not make this up if I tried department," the proposal blocks the Comcasts and AT&Ts of the world from blocking or slowing down any website.  In other words, it is ok to shake companies down for money but you cannot block them out of pure meanness.

It is hard to find anyone who is happy with the proposal.  The hard-core net neutrality crowd is displeased because they want the internet to be the same speed for all.  They do not spend too much time thinking about what incentives Comcast and its ilk would have to build and maintain the bandwidth necessary to make that happen.  Moving 180 degrees to the other side of the political spectrum, any hint of regulation has stirred concerns that the FCC will impose 1970s style telephone regulation.

There is one basic point that is getting lost in this discussion -- as more broadband hungry services become available, someone's gotta pay for the pipes.  Either Netflix, HuLu and other heavy-duty video providers start charging their customers higher rates (to reflect the payments they will have to make to Comcast and Verizon) or the internet providers themselves will have to start directly charging heavy-duty video consumers more.  Hopefully the FCC can remember this simple fact before adopting final regulations.

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