Net Neutrality and Its Unintended Consequences
Net neutrality is often portrayed as a consumer-friendly policy designed to maintain “freedom” in the Internet ecosystem. Unfortunately, when put into practice, net neutrality can produce results that actually harm Internet consumer choice. The term has been given many meanings but at a basic level, net neutrality disapproves of any restrictions or other interference by Internet service providers or governments on consumers' access to internet destinations. In 2010, The FCC developed its version of network neutrality through a series of broad principles.
This week, an article in The New York Times recommended expanding net neutrality in the bit cap context.
“Net neutrality has broad consumer and voter support,” Netflix chief Reed Hastings said in an interview. “It is important for the sake of public access that the rules apply equally.” “If I watch last night’s ‘S.N.L.’ episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all,” Mr. Hastings wrote on his Facebook page. “In what way is this neutral?”
Richard Bennett, an ITIF Senior Research Fellow who specializes in broadband networking and Internet policy, disagrees with Mr. Hastings and described just why in a piece for The Innovation Files. Many policies and entitlements have broad consumer appeal and support, but that does not dictate it is either a smart or sound policy decision. Furthermore, most consumers have no idea what net neutrality means or why they should care about it.
Mr. Hastings’ “S.N.L.” example illustrates a confusion about the technology that’s contained in The New York Times article. The article mixes up video-on-demand delivery with over the top video services. In the first case, the customer has already paid for delivery to the Xbox as part of its video subscription, just as she had paid for video-on-demand delivery to the traditional TV receiver. In the other case, the subscriber is entering into a new business arrangement with an over-the-top video provider who is providing (for pay, or for free with separate advertising support) an unrelated service, even if the content is similar. In the name of “neutrality”, Mr. Hastings would have cable subscribers pay twice, just to be able to watch a program on-demand on a more convenient screen. It is just such results that make “network neutrality” an unreliable compass in directing Internet public policy.
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