Net Neutrality Debate Over Internet Regulation

TECH: President Sees Telecommunications Act As Enforcement Tool

By Brad Graves
San Diego Business Journal

Volume 35, Number 47

CEO Lori Steele Contorer sometimes reaches for the term “utility” when describing the Internet. In a way, it’s similar to electricity or phone service.

But that figure of speech only goes so far. The chief executive of Everyone Counts Inc. said she is “not excited” about the prospect of the Internet being regulated like a utility — which is the subject of a renewed national debate.

Contorer said government officials need to think through the ramifications of their actions, including how regulation might affect innovation and access to information.

For Contorer, it’s more of a philosophical issue than a fear that change will hurt her business. Everyone Counts helps government clients hold Internet-based elections. Election data “is very, very low bandwidth,” Contorer said. By contrast, Internet traffic is increasingly shifting toward video, which takes up much more room in the metaphorical Internet pipes.

A large amount of Internet traffic in the pipes may raise questions over which traffic has priority. That issue goes to the heart of something called net neutrality — which means that a phone or cable company should treat all Internet traffic equally.

The Phone Call

Earlier this month, the White House suggested that the Federal Communications Commission should place the Internet under Telecommunications Act rules. President Barack Obama said that in order to maintain net neutrality, the government ought to regulate consumer broadband service like a utility — specifically, under Title II of the Telecommunications Act. He raised the specter of Internet service providers playing favorites with certain traffic.

“We cannot allow Internet service providers ... to restrict the best access or to pick winners and losers in the online marketplace for services and ideas,” the president said in a statement Nov. 10. Obama’s statement hinted at the possibility of corporate censorship.

Obama called for no “throttling” — speeding up some content or slowing down other — and no payments to Internet carriers to send certain content on a priority schedule.

Businesses and advocacy groups reacted to the proposal in different ways.

"In plain language, the president came out in support of real net neutrality..." said a statement from New Media Rights, a San Diego organization led by attorney Art Neill.

Small business operator Tim Caulfield said he is uncomfortable with different classes of service for different people. While he usually opposes Obama on policies, the president's thought process here is correct, said Caulfield, CEO of The Antara Group, a management consulting firm with six employees.

Reid Carr, president of Red Door Interactive downtown, expressed concerns that large businesses might be able to "squash" small businesses without net neutrality. Maintaining net neutrality ultimately affects his business, he added, because it affects how well his workforce will be educated.

Cox Communications Inc., a cable provider with 6 million customers, is not happy with the White House proposal.

"Increased government control could threaten the network investment, innovation and job creation" behind the Internet, said a statement from Cox, which declined to make an executive available for an interview.

The Atlanta-based cable provider "supports the net neutrality principles of no blocking, nondiscrimination and transparency," said the statement from Sam Attisha, the company's vice president of public affairs in California.

However, placing the Internet under "outdated, 80-year-old telecom regulation" would increase mandates, discourage network investment and innovation, and potentially raise prices, the statement said, adding that the government has other legal options besides Title II.

Cox added that regulating the Internet under Title II would invite "years of litigation."

Innovation Inhibitor

A CEO with a smaller business said he didn't like the idea of the FCC regulating the information-sharing network, saying it would affect innovation and fair trade.

"Regulation will unlevel the playing field," said Greg Rollet, CEO of AIS Data Centers of San Diego and Phoenix.

Not surprisingly, Rep. Darrell Issa, one of Obama's biggest critics in Congress, says he opposes the White House proposal.

"The Internet works because there is competition," Issa said in a statement released Nov. 12. "The Internet works because they innovate. ...

"There isn't an example in which government got involved in something and increased the speed of innovation."