What Would Net Neutrality Look Like?

Now the net neutrality debate is spreading across the pond to Europe, even as it continues to be batted around in Congress. Personally I’ve been wrestling with the net neutrality question for some time now and it’s not an easy one for me to nail down. On the one hand, there’s a certain libertarian, “Fight The Man” side of me that immediately gravitates toward it. We want the little guy to have the same chance to stand up and be heard right along with the power brokers of the day. We like online shopping and desire all the options possible. (Personally, I shop online far more than in any brick and mortar stores these days.) The whole concept sounds like the very essence of equality and democracy, right? But how well does this characterization stand up under scrutiny and what would federally mandated net neutrality really mean to us?

Some have argued that keeping a “free range” internet is key to expanding high tech jobs, clearly a subject of great concern given the current unemployment numbers. However, as this Entropy Economics study found, federally mandated net neutrality restrictions would actually have the opposite effect, depressing job growth in the geek sectors. While some free wheeling supporters of the concept may disagree, it seems that webonomics follows the same sorts of rules as old school businesses in standard economics. They just do it more quickly.

Arguments have also been put forth that a lack of NN regulations would make conditions “unfair” to smaller entrepreneurs trying to get started in e-commerce who might not have the resources to compete with the heavily financed big boys. I suppose that’s a fair point, but the sad reality is that the business world frequently isn’t fair. It would be nice if every person who opens a donut shop could succeed, but let’s face it… if you open your store two blocks from a Krispy Kreme, you’re probably going to get clobbered. Regulations of this sort, when you stop to think about it, are pretty much the complete antithesis of the free market that drives our capitalist society. This was one of the points driven home by Representative Marsha Blackburn when she introduced HR-3924 earlier this year.

“But wait!” some NN proponents protest. “In the real world it’s true that we all have our choice of which store to shop at, but we all use the same public roads to get there. The net should work the same way.”

On the surface that looks like an appealing argument in favor of making sure everyone as the same information highway “road” leading to their business. But again, the analogy breaks down a bit upon closer inspection. In the “real world” not all roads are equal either. Well financed stores can afford to set up in prime spots in or near the mall, for example, where there will be a lot more casual traffic and eyeballs on your display. If you have less money to invest, you may wind up out in the sticks where you can afford the cheaper real estate costs, taxes, etc. You still get to have your store, but the traffic will simply not be the same. In this way, restrictions on bandwidth, web access, etc. seem to function the same way.

As I said, I’m still not entirely settled on this question and look forward to hearing opinions on both sides. There’s a definite emotional appeal to the idea of net neutrality and a free market for ideas, goods and services on the web. But the reality of it is troubling on a number of levels.