Has The Free Market Failed The US When It Comes To Broadband?
from the something-to-think-about dept
As the network neutrality debate has gone on and on, there are some aspects that are very troubling. The tech world is notorious for having what’s basically a libertarian/free market approach to the world — and applying that to the network neutrality debate gives plenty of good and convincing reasons why letting Congress regulate on this now will create problems down the road. Those are some of the reasons why I agree that legislation right now would be a dangerous move (especially as some of the laws are written). It’s tough (if not impossible) for Congress to understand how this technology will evolve — and trying to regulate it could stifle perfectly reasonable uses. At the same time, even if the laws seem reasonable, the companies in the space will likely figure out loopholes or other ways to use the regulations to their advantage. However, at the same time, it’s really troublesome to see the telcos mostly ignoring that very reasonable line of argument, preferring to trot out made up horror stories and outright lies to try to make their point. It certainly raises questions about what they’re trying to hide. If you’re right, you should be able to make your point without resorting to disingenuous arguments.
Meanwhile, what’s interesting to note is how uncomfortable some of the supporters of network neutrality legislation have appeared, noting that they usually fall into the libertarian/no-regulation-please camp, but support regulation in this case (even if they claim the regulation is designed to make the market more open). However, in the last few days, there’s been a growing push to explore whether or not the free market has failed when it comes to US broadband policy. Broadband expert Dave Burstein notes that all of the world leaders in broadband have come from highly regulated environments, leading folks like Kevin Werbach to ask “Why does unregulated competition in telecom work so well in theory, but so poorly in practice?” It certainly deserves at least some head-scratching.
As it stands now, there are two potential answers that I see. The first, is that an unregulated telecom/broadband market is fundamentally not competitive. As we’ve emphasized ad nauseum, the real issue in the network neutrality debate is the lack of real competition in the space — which is still a problem no matter what some people claim. This could be because broadband is a natural monopoly, like the highway system, where it simply does not make sense for there to be competition between different infrastructure projects. It’s wasteful and, in some cases, damaging. Instead, it makes more sense to set a single platform, and push for competition within the infrastructure. This is exactly what has happened in France, and has helped build a thriving competitive broadband market there.
A second answer, however, may be that this is a race we shouldn’t call yet. We have not hit the finish line yet, and there certainly is the potential that the infrastructure choices made within regulated environments may prove to be a legacy albatross down the road. For an example of this, just look at the race for HDTV from 15 to 20 years ago. There was a huge worry in the US that we were falling behind Japan and Europe in this technology, where their regulated approach allowed them to take a quick headstart, and achieve certain technology milestones that looked great and worried policy makers in the US. However, in the long run, the regulated approach proved problematic and inflexible, causing a lot of problems that the US avoided. To be honest, I’m still not convinced which scenario is the most fitting for US broadband policy, and can make arguments supporting either one. Hopefully, we’ll get some interesting discussions going based on this, but it does seem useful to raise the level of discussion to actual disagreement points such as this one, rather than the ridiculous “this is the end of the internet as we know it” level both official “sides” in the network neutrality debate have taken.