McCain is right; Internet regulation will stifle innovation and investment
On Oct. 22, the Federal Communications Commission voted to take a big step toward regulating the Internet. The same day, Senator John McCain introduced legislation designed to stop the FCC's heavy-handed move, and he made the following statements to the Washington Times:
“[T]he Federal Communications Commission will vote on whether to regulate the historically open architecture and free flow of the Internet. The commission will seek to impose "net neutrality" rules …. This government takeover of the Internet will stifle innovation, which will in turn hinder job creation.”
Senator McCain is right; the FCC is wrong. The Internet has been lightly regulated and today anyone is free to access any lawful content. That’s true net neutrality.
Now “net neutrality” has to be put in quotes because the term has been hijacked by those who favor strong federal regulation. Their push for heavy regulation is based on scare tactics and sound bites, NOT fact.
The FCC should focus on Internet buildout, so that it’s available to every home. Regulation will hinder investment and growth. Senator McCain is correct, and he deserves public support on this issue.
Action Alert: “Join the discussion” and urge the FCC to use caution as it considers whether to regulate the Internet.
Action Alert: Contact the FCC Today |
The CCW encourages you to “Join the Discussion” by visiting the FCC’s website openinternet.gov clicking on the “Join the Discussion” link. The FCC needs to hear that you want them to carefully consider before adopting any additional regulation to the Internet, which might discourage investment and innovation. |
On October 22, 2009, the Federal Communications Commission (FCC) will consider possible new regulations regarding “Net Neutrality.” Every CCW member should be aware of this issue and urge the FCC to move cautiously.
In 2005, the Federal Communications Commission (FCC) established Net Neutrality when it adopted its ‘Internet Policy Statement,’ which outlined four principles to “encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet.” The Commission adopted the following principles:
- [C]onsumers are entitled to access the lawful Internet content of their choice.
- [C]onsumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.
- [C]onsumers are entitled to connect their choice of legal devices that do not harm the network.
- [C]onsumers are entitled to competition among network providers, application and service providers, and content providers.
Today, the term “Net Neutrality” has been hijacked by people who want to substantially expand these principles and turn them into regulations that could seriously jeopardize innovation and investment for years to come.
It is worth noting that this is clearly not a Republican issue or a Democrat issue. In recent days a very diverse group of elected leaders has asked the FCC to slow down and avoid imposing regulations that could hinder the progress and potential of the Internet.
That is why Republican and Democrat lawmakers are urging the FCC to be careful to avoid the unintended consequences of government regulation.
A letter sent by 72 House Democrats urged the FCC to “carefully consider the full range of potential consequences that government action may have on network investment.” Furthermore the letter added, “we would urge you to avoid tentative conclusions which favor government regulation” and that “we remain suspicious of conclusions based on slogans rather than substance and of policies that restrict and inhibit the very innovation and growth that we all seek to achieve.”
Democrat Representatives from CCW states who signed the letter include: Ed Pastor (AZ-4), Ed Perlmutter (CO-7), and Jared Polis (CO-2).
According to the Wall Street Journal, at last count, there have been 11 letters from governors (a mix of Republicans and Democrats), 18 Republican Senators, House minority leadership and 72 House Democrats, which includes 18 members of the Congressional Black Caucus, 31 Blue Dog Democrats and 10 members of the House Energy & Commerce Committee, which has jurisdiction over the FCC.
Join the Discussion: Contact the FCC and your elected officials and let them know to keep their hands off the Internet.
The CCW encourages you to “Join the Discussion” by visiting the FCC blog at “openinternet.gov” and submitting your own comments to the FCC. Let them know that you want them to carefully consider before adding any additional regulation to the Internet, and avoid any decisions that might discourage investment and innovation.
Also, be sure to contact your elected federal representative and encourage them to oppose any burdensome regulations on the Internet.
Here are a few talking points for your consideration:
1) Competition and innovation are thriving without additional regulations
For the past 20 years people have been sending a clear message to government regulators: “Keep your hands off the Internet.” And for 20 years government regulators have done just that, which has allowed for unprecedented opportunity and innovation. Why threaten that now when there is no clear evidence of any problem with the way Internet service is managed?
2) Applying Net Neutrality to Wireless Broadband will have serious consequences
US wireless consumers enjoy the broadest array of innovative services and devices, the highest usage levels, the lowest prices, and the most competitive choices in the world. However, wireless networks are a shared resource. If wireless providers are not permitted to manage the network then one heavy user on a cell site sector could prevent any other user from accessing the sector. Click here to see how imposing Net Neutrality on wireless could affect your wireless experience.
3) Network investment will suffer if additional Net Neutrality regulations are imposed by the FCC
A recent report by Cisco notes that the amount of traffic on the Internet in 2012 will be 75 times greater than in 2002. Internet traffic will generate 28 exabytes of data per month in 2012. You may be asking, “What exactly is an “exabyte?” One exabyte of data converted to DVD quality video would take 50,000 years to watch. Total Internet traffic in 2012 will be six times greater than it was in 2007, and four times larger than last year. It will already take substantial investment in broadband networks to keep up with this increased demand. Now the FCC wants to prevent service providers from effectively managing their networks. Such regulation will discourage investment and prevent expansion of broadband networks.
Additionally, in a a recent report, the FCC stated it could take up to $350 billion to achieve universal broadband. Why would the FCC consider imposing regulations that would not only discourage private investment but insure ineffective management of the broadband network?
Network companies have to be able to manage their networks to ensure the most economical and efficient use of bandwidth, and provide affordable broadband services for all users. Network management is essential for consumers to enjoy the benefits of new quality-sensitive applications and services. The FCC should not adopt rules that could stop the promise of life-changing, cost-saving services such as telemedicine that depend on a managed network.
Analysts predict gloomy future for ISPs
By Brad Reed
Network World – 5/22/08
NEW YORK – There has been a lot of speculation in recent weeks about whether global oil demand could soon outstrip global production capacity. During a panel discussion sponsored by the Internet Innovation Alliance today, several experts pondered whether something similar could soon happen with bandwidth.
The panel, dubbed “The Cost of the Exaflood,” addressed problems that ISPs could experience as they try to keep up with the increased global bandwidth demand currently being driven by high-bandwidth applications such as peer-to-peer transfers and HD video streaming.
Craig Moffett, a senior analyst for U.S. cable and satellite broadcasting for Sanford Bernstein, made the gloomiest predictions by saying that it was inevitable that major ISPs and content providers would experience significant losses in revenues as a result of increased bandwidth demand.
We’ve got all kinds of stresses on the system right now, and I suspect that… we’re going to see some pretty significant blow ups over the next few years,” he said. “The rhetoric around this doesn’t remotely match the economics.”
Gary Smith, CEO of network infrastructure vendor Ciena, agreed with many of Moffett’s points and said carriers would have to consider new pricing models that differ from the current model in which users pay a flat rate for a certain amount of bandwidth. Instead, he recommended that carriers begin charging users rates in direct proportion to the amount of bandwidth they consume.
“We’re seeing a tremendous expansion of applications,” he said. “The issue is, who pays for it and over what period of time are people going to get returns from that? Part of that responsibility goes to end users… We’re going to have to get to a point where people pay for usage in some way. You can’t continue to have a system where someone who uses just a small amount of bandwidth pays the same amount as someone who is streaming video for 24 hours a day.”
Panelist Johna Till Johnson, CEO of Nemertes Research and a Network World columnist, agreed with the other panelists that ISPs would face some major challenges in making sufficient revenues as they upgraded their networks to handle increased bandwidth demand. The big problem, she said, was that while Web traffic has been growing at an exponential rate, the access capacity has been growing linearly. Thus, unless something changes in either traffic demand or access supply, Johnson predicts that there will not be enough bandwidth to meet global demand.
But unlike Smith or Moffett, Johnson did not explicitly endorse a tiered system of charging consumers rates that are directly proportional with the bandwidth they consume. Instead, she said no one currently has enough concrete knowledge about traffic growth and access capacity, and recommended that the government encourage ISPs to more openly disclose their traffic data so that researchers could get an accurate picture of how much bandwidth demand is growing.
Beyond this, Johnson said any national broadband policy to help mitigate the bandwidth crunch would have to consider trade-offs between ubiquitous access and innovation. For instance, if the government were to pay for access to rural areas that ISPs can’t provide because of revenue constraints, then she said those connections would very likely become inferior to other connections within a matter of years.
“If your overall goal is ubiquitous connectivity, you’re basically doing that at the expense of some level of innovation,” she said. “For instance, consider what happened after the government took over the subway system after private subway companies went bankrupt during the Great Depression. The good news is we still have a pretty good subway system today. The bad news is I don’t think we’ve actually changed and updated and innovated much about it for years.”
Nemertes Research first started sounding alarm bells about the potential pitfalls of exponentially increasing bandwidth demand last year when it released a study claiming that the Internet could overload and lead to brown-outs in two years unless backbone providers invest billions of dollars in new infrastructure. Net neutrality advocates have typically derided concerns about an upcoming “exaflood” as exaggerated, and point to research conducted by the Minnesota Internet Traffic Studies project showing that while overall traffic has grown year over year, the actual rate of traffic growth has slowed in recent years.
http://www.networkworld.com/news/2008/052208-isp-gloomy-future.html
Exaflood Video
What is “exaflood” anyway? “Exaflood” stems from the term exabyte, or 1.074 billion gigabytes. Two exabytes equal the total volume of information generated in 1999. The Internet currently handles one exabyte of data every hour.
This mushrooming amalgamation of data is pushing the Internet to its limits. In other words, the exponential explosion of digital content on the Internet, while useful if not necessary day to day, is posing some interesting challenges.
YouTube alone consumes as much bandwidth today as the entire Internet consumed in 2000. Users upload 65,000 new videos every day and download 100 million files daily, a 1,000 percent increase from just one year ago. The market research firm IDC predicts that this year the amount of information created will surpass, for the first time, the storage capacity available.
Interested to learn more about the exaflood? Take a look at this short video from Fiber To The Home about the issue.