Tuesday, May 13, 2008
A coalition of big-name tech companies -- Microsoft, Amazon, eBay and others -- wants the feds to make sure that cable companies don't ruin the broadband Internet.
Aug 12, 2003 | When you ask Gerry Waldron, a prominent Washington attorney, why he's pushing hard to have the government regulate cable Internet services, he presents you with a comical hypothetical situation. "Imagine if you called 1-800-L.L.-Bean and your phone company said, 'Sorry, we're not going to connect your call because we have a deal with Land's End.'" For telephone service, that would be preposterous; the phone company is prevented both by laws and by customer outrage from limiting your calls to specific phone numbers.
But Waldron says that on the broadband Internet, customers enjoy no such protections. If your cable company decides it wants to sign a deal with Land's End and stop you from visiting L.L. Bean's Web site, it's free to do so -- what are you going to do, find a new cable company? "And that situation gets us worried that the Internet that we've grown up with, the Internet that has been characterized by consumers' ability to go wherever they want -- that may not continue in the broadband age," says Waldron.
Waldron isn't expressing just his own personal worry; he's channeling the anxieties of some of the biggest corporations in the country -- including Microsoft, Amazon, Yahoo, eBay, Disney, Apple, and Earthlink. Late last year, these firms joined together with a few consumer groups to form the Coalition of Broadband Users and Innovators, a lobby that aims to prevent cable companies from shaping the future of the Internet. "A cable company is used to operating in the cable world, and it's routine for them to pick and choose content," says Waldron, who represents the coalition. "In the broadband world there's no need to pick and choose" -- but what if the cable companies do so anyway, giving some Internet content preferred status on their network, and banishing other stuff altogether?
The issue of cable's influence over the Internet is set to become a hot potato for policy circles in Washington. The Coalition and several of its member firms, acting separately, have already submitted to the Federal Communications Commission a number of proposals intended to bring to the broadband world a concept the Coalition calls "net neutrality." Proponents of the neutrality rules describe them as simple and straightforward: if the proposals are enacted, broadband providers would essentially be prohibited from "discriminating" between the various types of content that come into your home. Under the rules, your cable company could not force you to visit Barnes and Noble instead of Amazon, or prevent you from using Microsoft's online game system while allowing you to use AOL's games, or exact a surcharge when you download videos that aren't in the QuickTime format -- the kinds of seemingly arbitrary practices that the Coalition says cable firms are itching to put into place.
Cable firms say there is precious little evidence to suggest that the industry wants to interfere with what people download from the Web; in the five or so years since cable modems were introduced, there hasn't been a single recorded instance of a cable company arbitrarily cutting off customers from legal Internet content. There may be no rules preventing firms from doing so, but "the whole point of broadband services is to go anywhere on the Net faster," says Howard Symons, an attorney for the National Cable & Telecommunications Association, the main cable industry trade group. "If they turn the Internet experience into something that it's not, people will go to the many alternatives that are available to them."
Faced with a unified assault from some of the leading lights of the tech industry, the cable firms have also been privately suggesting that members of the Coalition harbor base ulterior motives for regulating cable. Certainly, cable companies say, the neutrality rules will benefit members of the Coalition. Microsoft, for instance, might want the rule to prevent cable systems from signing special deals with competitors to its X-Box Live online gaming system (such as Sony's Playstation). The same goes for Amazon, Disney, and others -- they could all stanch the power of rivals by preventing the sort of contracts that cable companies say will lead to faster adoption of broadband services. Moreover, cable firms complain that it's hypocritical for Microsoft -- which, during its long battle with the Justice Department, made clear its antipathy to government-imposed strictures on business -- to be calling for regulations on potential rivals now.
"You have to ask how much of this might be blatant regulatory gaming of the system," says Adam Thierer, a telecommunications analyst at the Cato Institute. "Yahoo, Microsoft, Amazon -- if they can push any regulatory mandate that benefits them in the long run, they're going to do it."
It's perhaps telling, though, that many of the people who've come to the defense of the cable industry in this fight are, like Thierer, of the libertarian school of telecom policy -- folks who believe that all regulations are bad regulations, certain to do more harm than good. Indeed, the cable industry's main argument is a paean to a live-and-let-live broadband marketplace -- a world in which regular market forces prevent cable company mischief. We won't do anything terrible, the cable firms say, because our customers would leave us if we did.
Can we trust your cable company -- and the free market -- to let us do what we want on the Internet? So far, there's no reason not to. But Gerry Waldron points out that the cable firms have both the technical capability and the financial incentive to block some things on the Internet and to feature others. And at least for now, the broadband world does not resemble a very free market; if customers get sick of their cable firm, most people have little choice to go elsewhere. What's the problem, therefore, with adopting a simple rule? "You told us you're not going to drive over 100 miles per hour," Waldron says. "So what's the harm in having a rule that says, 'Don't go over 100 miles per hour?'"
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