Questions, Answers & More - Net neutrality

If you haven't heard of "net neutrality" or the Save The Internet campaign, you eventually will because the Internet is driving a convergence of the telecommunications sector.

Very soon we will not only use the Internet for online communication but also for all other communication including entertainment. This convergence will potentially result in more competition, new services and new products.

On one level this is great news for the consumer, but on another level it also spells a potential danger as highlighted by the Save The Internet campaign.

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The Save the Internet campaign, initiated by FreePress.org, was sparked by comments by representatives of the large broadband provider sector signalling their intention to take more control over the Internet traffic that passes through their pipes and gateways.

At the moment there is little or no discrimination. Content originating from a mega corporation has the same priority as the latest garage start-up. In other words, we have a relatively neutral Internet, which has given rise to the term "net neutrality".

The telcos argue that Internet Service Providers (ISP) should be able to discriminate between content for commercial reasons. This is the only way, they argue, they can achieve their profit objectives and attract the necessary capital to maintain and grow the infrastructure.

Grassroots organisations like Save the Internet argue that such control would create a tiered Internet where those who can afford the tolls, like the established mega-corporations, will have not only priority access to the Internet, but also will start to exert control over content to enhance their commercial ends.

The whole Internet, they argue, could become like Cable TV where the content is carefully controlled to maximize profit. This would undermine the free-flowing nature of the Internet, stifle innovation and even undermine democratic processes because such control over such a pervasive media could be used for political ends.

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Both the opponents and proponents of net neutrality agree that the goal is an Internet which is flexible, inclusive, affordable and democratic as possible. They differ in the method how to achieve this goal.

The opponents of net neutrality argue that the best way to achieve the above is by an unfettered free market. They argue the opportunity for profit and competition will result in the best outcome for all.

Proponents of net neutrality believe we need to have an additional safeguard in the form of government regulation. This is driven, in part, by concerns about how free markets tend to consolidate resulting in monopolies and oligopolies. Without this safeguard, they argue, the Internet will follow the same path to consolidation as banking, finance, oil and energy and traditional media.

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One of the key arguments is that government regulation tends to result in unnecessary complexity, increased costs and a bureaucracy, which by its very nature is backward looking. This last aspect in particular concerns those who see regulation as not just stifling innovation in general, but also stifling the development of technologies that could provide solutions to the very problems highlighted by the net neutrality debate.

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It provides the most direct and effective way to create and maintain a level playing field in a market so heavily dominated by large corporations.

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The threat to online freedom is not so much the corporations wanting to take control of the Internet; the real threat is an apathetic public.

The current grassroots campaign has raised awareness, but all campaigns eventually fizzle out. The proposed legislation, in isolation, may not provide the necessary safeguards and, if seen as a "set and forget" solution, will most certainly be at the mercy of the powerful lobby groups.

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The optimum solution lies in augmenting the proposed legislation with a strategy to convert this high awareness into a market segment which demands online freedom.

This market segment can only come into being once people start to act on their needs. Copowi provides this opportunity for action.

If people start to actively switch to ISPs who provide net neutrality guarantees, it will encourage other ISPs to offer similar guarantees. This will not only raise immediate but also ongoing awareness because it will become an integral part of the features and benefits of ISPs.

It also provides a fail-safe should the legislative approach falter or not achieve the desired result.

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The independent ISP sector has shrunk from about 7,000 ISPs in 2001 to about 3,500 ISPs in 2006. Nevertheless they still provide Internet access to about 10 million users and employ approximately 30,000 people.

The grassroots campaign could rejuvenate the independent ISP sector rejuvenating competition in the process.

In addition, potentially 10 million more people will become aware of the need to keep the Internet open and fair.

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In theory, nothing. In practice, it depends on demand. If the demand for wholesale services is sufficiently attractive, market forces will compel the telcos and cable companies to compete to meet that demand.

If they all cease providing wholesale services where demand clearly exists, then it can be argued that collusion exists and hence market failure. Regulation will then be inevitable, but that point, according to the FTC, has not yet been reached.

We currently have the classic carrot and stick situation. The stick of regulation has been effectively waved, all we need now is the carrot of a large and growing market segment to be dangled to complete the picture.

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No. While we believe that a market-based solution has emerged, it may not be realized without some regulatory safeguards to maintain the necessary level playing field. Carefully drafted legislation in tandem with support for a market-based approach may be the ideal way to preserve the freedoms of the Internet.

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