Singularity Law

“Network neutrality” is a highly charged issue amongst Internet lawyers, business executives, users and government officials. During the formative years of the Internet, the question of whether companies that provided Internet connectivity should treat all users and websites equally was not an issue. It was assumed that they would. Just like the telephone companies treat all users equally – not getting involved in what kind of business is using a telephone, what kinds of conversations are taking place, and even whether the phone system was being used for illegal purposes – bookmaking, extortion, etc.That was (and is) none of the telephone provider’s business. And so it was on the Internet – until recently.

In exchange for the “hands off” approach by the providers of the ‘Net’s infrastructure, the government in turn took a generally “hands off” approach to the Internet as a whole — at least during most of the 1990s. The argument was that the government should not regulate the Internet when it did not know exactly how the Internet was going to develop. Premature regulation might kill off or prevent innovative uses of the Internet from developing, particularly in the e-commerce area. Ironically, it was the Democrats in the White House and Congress – who are generally thought to favor government regulation for the “public good” – who were some of the strongest advocates of minimal Internet regulation.

In the last eight years, under a Republican administration – which is generally seen to favor the free market over government regulation — we have seen a significant increase in government oversight of certain aspects of the Internet. But until recently we did not see any regulation in the area of the pipes themselves. The federal government continued to let the “market” regulate the provision of Internet access – and it worked exceedingly well.

However, in the last several years, we have seen a significant change in the philosophy of those telephone and cable companies that control Internet access for virtually every person, corporation, and website operator in the United States (and elsewhere in the world). These companies have realized that they can control use of these “pipes” to their own economic advantage – and have begun to take action to carry that out, all to the detriment of the public.

Comcast was the first to come under scrutiny by federal regulators, and a recent FCC decision sought to limit Comcast’s ability to discriminate against online competitors in the video-on-demand market in favor of its own cable video-on-demand services. Other telephone and cable companies are beginning to discriminate between various classes of customers, and are blocking access to entire areas of the Internet (for example user access to Usenet groups), while others are considering ways to charge websites for “preferred” access to their networks.

The recent FCC action against Comcast has raised the perennial political struggle – should government regulate the Internet or should it leave the ‘Net to free market forces. In light of the history of the Internet, which until recently was able to self-regulate itself, one would be tempted to argue in favor of continued, minimal government regulation. However, recent catastrophic failures on Wall Street and the banking industry, which were the result of eight years of deregulation of those industries, augers against the notion that the free market will “fix” any problems that arise.

While in the 1990s, the Internet was a useful, but not essential, part of our society, the same can’t be said today. It is just as unimaginable to think about living without the Internet (or even with an Internet controlled by a few bottleneck access providers), than to think about trying to live without a reliable financial sector. The looming economic depression that has been thrust upon us as a direct result of deregulation (or perhaps more correctly a concerted decision to not regulate) of the banking and financial sector shows how poorly free market forces work when a few companies control an entire industry. We cannot allow the same thing to happen to the Internet.