Say No to "Net Neutrality" Rules

Why stricter regulation of the Internet is unnecessary and could discourage broadband investment

Editor's Note: BusinessWeek Online published a viewpoint by U.S. Representative Rick Boucher (D, Va.) (see BW Online, 3/7/06, "Beware of a Two-Lane Internet") that argued in favor of rules that, in the author's opinion, would foster fair access to the Internet. An alternate view follows.

Congress should say no to those encouraging it to impose regulation on the Internet and a new set of requirements on America's broadband networks. This effort -- cloaked in the phrase "Net neutrality" -- is an attempt to fix a hypothetical problem that does not exist. These new Internet regulations are not only unnecessary, they pose a danger to the future of high-speed wireline broadband deployment in the U.S. at the very moment such investment is taking root.

The problem, say some Net neutrality activists, is that companies that build and operate broadband networks may, at some point, try to block access to the Internet or "crowd out" competing content from applications providers. Fortunately, that is not a problem people have to worry about. Clearly, at Verizon (VZ), we have no plans to limit consumer access to the Internet or offer one company that relies on the Internet unfair advantage over its competitors.


  Verizon's policy is a direct reflection of our business strategy. Our company is in the network business. We're investing billions of dollars to build the most robust broadband network being deployed anywhere in America.

With its unsurpassed capacity and functionality, our fiber network can provide customers with super-fast Internet access at speeds of 5-, 15-, and 30-megabits per second upstream, with even higher speeds on the horizon. Our network also has the bandwidth to enable us to provide video services and offer customers more choice and competition in the market for subscription TV.

Our ability to continue to invest in this advanced fiber-optic network rests on the revenue streams we get from offering our own services, in addition to those of others, over our own networks. Net neutrality regulation could put any future investment in advanced broadband networks in serious jeopardy.


  At a recent Senate Commerce Committee hearing on Internet neutrality it became apparent, despite the Sturm und Drang created by a few advocates, that there is an emerging consensus on some important points about Internet neutrality.

First, the Net neutrality principles endorsed by Federal Communications Commission Chairman Kevin Martin and his fellow commissioners are working in the marketplace right now. In fact, they are similar to connectivity principles issued by the High-Tech Broadband Coalition several years ago. Both state that consumers should have full access to any legal content on the Internet using any device or application, and should receive accurate information about any limitation on their Internet access services. Verizon supports and abides by these principles.

Second, if an industry player does not live up to the Internet neutrality principles, that company is sure to be quickly held accountable. Not only does the FCC monitor the situation to protect consumer and company interests, it will act where appropriate, as it did in the case of a small company last year that tried to block Internet voice calls. And the public and media outrage was severe, as it should have been, demonstrating again that market forces do work.


  Third, the push for Net neutrality legislation is a classic example of anticipatory regulation -- the kind of legislative and regulatory overreach that can freeze a dynamic marketplace and slow innovation and investment. No one -- not Congress, not the FCC, not those of us in the broadband industry -- can predict the future. Consumers, technology, and the marketplace will decide what works and what doesn't. If there are bad actors in the future, they will be dealt with appropriately.

What if we had allowed wireless to be regulated, as some advocated? What if the urge to regulate the instant-messaging market a couple of years ago had not been successfully resisted? It's unlikely that wireless and IM would be the vibrant services they are today. Instead, we allowed the market to work, and the results speak for themselves.

Washington should not now try to decide ahead of time what tomorrow's Internet will look like.


  Not only is an open and accessible public Internet the right public policy, it's smart business. Clearly, Verizon would lose customers if it didn't provide them access to what they wanted. Consumers deserve complete confidence that they will always have the full Internet access they pay for, and it is in consumers' and the industry's interests that potential bad actors know they are severely outnumbered.

As we observe with dismay what happens in other world markets -- China, for one -- when governments try to control the Internet, we can be thankful that Congress' hands-off approach to the Internet and broadband has created a thriving marketplace in which the consumer is in charge and businesses compete and innovate. There is nothing on the horizon that will change any of this, unless Washington gets in the way.

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