The topic of
“Net Neutrality” has been fiercely debated recently, with the left lining up on
the side of heavy government regulation and the right opting for free market
forces. Who is right?
Who knows. Only
time will tell. But here is a little background for your consideration.
First, let’s
start with a little history. The topic is human communication, and let’s
arbitrarily begin with the Pony Express, a mail delivery service started in 1860
and operating for 19 months until October, 1861. At that time, California was a
new state, and had a burgeoning population and economy. The gold rush was in
full bloom and economic opportunities were enormous. There was an extreme
demand to reduce the time of communication between the east and west coasts,
and the Pony Express was a business started to meet that need.
Using relays
of riders on fast ponies, the service promised to reduce the time to deliver
mail between St. Joseph, Missouri, and Sacramento, California, to only 10 days.
This was unheard of in those days, and the business was immensely successful.
But then a
curious thing happened.
Simultaneously,
a new technology, the telegraph, was being established. Stations were being
built, poles planted and lines stretched, and messages transmitted by Morse
code over hundreds of miles instantly. In October 24, 1861, the final connection
was made and messages could be sent nearly instantaneously from coast to coast.
The Pony Express ceased operation two days later, no longer economically
competitive. This was no accident. An early example of technological disruption.
Fast forward
to the 1990s. AT&T was the dominant telecommunications provider in the country.
Voice, data, and fax traffic were distributed over their huge network of
circuits. Intelligence was engineered into the network, with such things as voicemail,
call waiting, call routing, and calling card charging all handled by the network.
The end devices (telephones, fax machines), were dumb. Profits were huge and
phone bills correspondingly large.
But then
another disruption – computers and smart telephones that were capable of
providing services that demanded only transport of the network.
AT&T’s
business model was forced to change – there was no profit in providing
intelligence in the network when the end devices were capable of doing it
themselves. The network was reduced to simply routing packets of information
from endpoint to endpoint, each of which was intelligent and could provide all
of the functions that the customer wanted. The network became stupid, but the
customers were happy with their smart devices.
Another leap
in time, to 2017. We have evolved an economic landscape of wireline Internet
Service Providers (such as Comcast, Cox, Charter) which provide cable or fiber
internet access to our homes. At the same time, there are a number of wireless (mobile)
providers (such as AT&T, Verizon, Sprint, T Mobile) who provide mobile cellular
data services. Our high data demands (TV viewing or streaming) are met by the
wireline (cable) providers. Our mobile needs (phone calls, light data needs)
are provided by the wireless providers. But another technological disruption is
underway.
The next
generation of wireless technology, termed 5G, is soon upon us. It promises to offer
high speed data access competitive with the cable providers. All of a sudden,
the wireless and wireline providers will become equally capable of streaming
Netflix or Sneaky Pete to your TV. The difference is that the wireline guys will
be anchored to your home while the wireless ones will be able to follow you
around, providing cellphone service and TV streaming wherever you like, at your
pleasure. The amount of competition will increase substantially.
A recent
political cartoon summed up the position of the “Net Neutrality” proponents. If
we don’t opt for heavy government regulation, we will suffer from lack of
access to the information we want, we will be unable to share ideas, dissent
will be squashed, network speed will be sacrificed, and diversity will be out
the window. This is all possible.
But not
likely. In an era where social media can dethrone a Harvey Weinstein, how much
chance does a nefarious ISP have to abuse us?
If the free
market is allowed to function, the force of customer demand will shape the
market, providing the services we want at the prices we feel are fair.
After all,
it works with widgets. Why not for data packets?
Only time will
tell.
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