Hank Hultquist’s Net Neutrality Takeaway from Fox-Cablevision Talks – Proposed Regulations Miss the Point

by Mike Wendy on October 20, 2010

AT&T’s Hank Hultquist, discussing the Fox – Cablevision negotiations, makes an interesting Net Neutrality observation:

… On the unregulated Internet, we’ve got the opposite situation.  Cablevision (the local phone company in this analogy) has no tariffing power, and Fox and presumably other content providers (the long distance companies in this analogy) appear ready to block the transmission of content when they think it’s in their business interest to do so.  By the way, this same type of thing occurs every day when ESPN blocks certain premium content for Internet users whose ISPs don’t pay ESPN for the privilege of accessing that content.  Far from being the victims of a terminating monopoly as some pro-regulation advocates predicted, these content providers clearly see themselves as possessors of an “originating monopoly.”

The demise of the “terminating monopoly” school of thought has profound implications for the debate over net neutrality.  If content providers can collect “tolls” on the Internet and ISPs don’t have the unilateral power to force third parties to pay to “use their pipes,” then what is the point of the net neutrality debate anyway?

Retransmission and Must Carry regulations are in desperate need of policy reform, no doubt.  That said, let’s let the market players sort this one out.  Let’s also understand that Net Neutrality regulation – its “limited” but “necessary” regulatory reach (as sold by the special interests, as well as FCC Chairman Genachowski) – are regulations that already look outdated and toothless.   And they’re not even yet codified (let’s hope it stays that way).

Sadly, once Net Neutrality regulatory powers sit in the Commission’s “benevolent” hands, they will expand.  Already, groups like Public Knowledge – seeing Fox briefly pull its Internet content during the dispute last weekend – are urging policymakers to further engorge the Commission’s “open Internet” quiver.  Says PK’s Art Brodsky, “If one values the open Internet, however, there should be rules against that sort of thing, whether the blocking is done by the ISP or by a content provider.”

But the Net Neutrality / Reclassification regulations, as pushed for by PK, and Free Press, and every other special interest they associate with, were designed to stop the “evil” network provider only.

Now they have to go further, the anti-private property radicals urge.  Consumers have a “right” to the indentured servitude of content providers when they dare place their highly valued content on the Internet.  Private property, free speech and contract law be damned.  That content is now the People’s.

It never ends.  That is, unless we put an end to this regulatory Maginot Line.

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