Friday, November 03, 2006

Now Net Neutrality Will Ban Ad-Based Network Business Models?

From Techdirt:
We've been dismayed at some of the really questionable or outright dishonest statements made by those paid by the telco industry on the issue of net neutrality. They keep distorting the debate -- which is disappointing, because there are reasonable arguments against net neutrality legislation. We just don't seem to hear them from the think tankers and the shills (sometimes, though not always, they're the same thing). The latest is a long piece by Haney Hance, who is certainly quite knowledgeable and experienced on the topic, but who writes up a long post explaining why enforcing net neutrality as a condition of the AT&T/BellSouth merger will make it that much more difficult for the US to have "world-class internet infrastructure." Amusingly, he points to the situations in South Korea and Japan as evidence of why the US needs better, cheaper broadband, failing to include the bit about how heavily state-supported both of these efforts were. Considering that he's warning about how it will stifle growth here to have the government involved, it's pretty bad to see him raise up those examples as reasons why we need less government regulation. He also says that AT&T/BellSouth wouldn't block web sites or degrade service, despite the fact that they've said they wanted to in the past. Hance, instead, says it's no problem since AT&T's CEO has promised he'd never do that (going against his own earlier statements). Of course, we've seen the telcos go back on their promises before -- so forgive us for being skeptical.

However, the meat of his piece is to suggest that if network neutrality rules were put in place, it would mean that telcos would be unable to experiment with business models that involved using advertising as a subsidy. Of course, he leaves out the part where he explains why this is. He just states it as true, when there's simply no evidence to support that being the case. A non-discrimination clause (while problematic in other ways), would not limit a telco from offering broadband service that's supported by advertising -- and there were even attempts (which failed miserably) to offer such services in the past. He even makes it sound like Google and Yahoo are somehow taking money out of the telcos hands by being able to advertise without having to give up a piece of it to the telcos ("content providers like Google, Yahoo and eBay get to keep every dollar spent on online advertising.") That's because those providers already pay the telcos for their bandwidth and provide the actual pages on which the advertisers advertise. What they do with it, is none of the telcos concern -- which is the point the network neutrality folks keep trying to get across. While I'm still worried about any new legislation that gives the government more power to regulate the internet, it's disturbing to see the continued batch of bad arguments coming out in favor of the telco position. It doesn't help their cause at all. It just makes it look like they don't have a real argument.

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