Tech & Telecom

Yesterday, the Brookings Institute held a panel that purported to discuss “Fostering Internet Competition”. But who is to do the fostering? Federal regulators, of course. The three panelists, Susan Crawford, Spencer Waller, and Douglas Rushkoff, rehashed familiar arguments aimed at policy scarecrows by would-be regulators when discussing tech and telecom regulation.

Unless government steps in, the argument goes, walled gardens will trample the net. Deserving Americans will never get Internet access. They’ll be dependent on cruel, monopolistic ISPs who dispense access like a feudal lord dispensing his favor. Innovation and experimentation will end.

A lot of this seems like a big panic—a “technopanic,” as Adam Thierer, telecommunications policy expert at the Mercatus Center, puts it. It seems to derive from the technoscenti’s realization the median Internet user today, besides being completely ignorant of even the simplest technical aspects of the net, just doesn’t care much about the things many early adopters hold dear. Calls for government protection of the values of the net’s early days are a response to the ever starker realities of the Eternal September.

If a successful Internet-based platform looks like a walled garden, chances are Crawford wants to stop it. So what if users like the functionality and ease of use that comes with carefully cultivated app stores? Such ecosystems undermine the very core of the net. God forbid an ISP experiment with new pricing arrangements or data policies. Anti-competitive practices like that destroy the global forum’s fundamental end-to-end nature! If something looks kinda-sorta like it maybe, just might be close to running afoul of some FTC or FCC regulations—including regulations that exist solely in academics’ minds—we must pounce on it to preserve the open Internet.

For an event about “fostering Internet competition,” there was hardly any talk of reducing barriers to entry, of freeing copper-based providers of the onerous regulations that hamstring their ability to compete with cable- and fiber-based providers, of the changing nature of broadband markets, or of the desperate need for humility when, with the clumsy tools we have, we think about further regulating such a vital sector.

The panelists realize mobile broadband adoption is exploding an amazing rate but demand we extend wired connections to those without. Could it be mobile broadband providers actually may be competing with wired broadband providers?

The panelists also tout universal broadband service as a necessary step to securing American dominance in information technology but also demand regulators make markets more competitive. But wasn’t it the desire for universal service that helped justify Bell’s consolidation and monopolization of the telephone market in the first place? And don’t the biggest telecom firms reap the bulk of universal service dollars? Achieving universal broadband service while “fostering” competition can happen only if we reinvigorate dying “open access” rules – which, by the way, are a main reason DSL isn’t the competitor Susan Crawford wishes it were.

Like many Internet users, I’m sympathetic to the panel’s stated intentions. I like “the open Internet.” I like to collaborate and to share  information with millions of strangers all over the world.

But I don’t think differential pricing or vertical integration between ISPs and content providers spell doom for the open Internet. Rather, these developments can add to our experience. If they’re tested in a vibrant marketplace, they’ll succeed or fail on their own. The real danger is inviting the government in to regulate, to control the market and pick winners and losers. Although yesterday’s panelists talked a good game about defending Schumpeterian creative destruction, they assumed today’s dominant players didn’t emerge out of this cycle. But if policy makers and academics think they can outsmart market processes, their efforts to defend them will surely fail.