Just An Online Minute... FTC Warns Against Net Neutrality Laws

by Wendy Davis, Jun 28, 2007, 1:47 PM

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The Federal Trade Commission has dealt a blow to net neutrality advocates, who have been clamoring for new laws that would prohibit Internet access providers from discriminating against publishers by blocking access to particular Web sites or degrading service.

In a 170-page report issued yesterday, the agency argued that legislators should tread carefully before passing any new legislation.

"We recommend that policy makers proceed with caution in evaluating proposals to enact regulation in the area of broadband Internet access," states the FTC. "The primary reason for caution is simply that we do not know what the net effects of potential conduct by broadband providers will be on all consumers, including, among other things, the prices that consumers may pay for Internet access, the quality of Internet access and other services that will be offered, and the choices of content and applications that may be available to consumers in the marketplace."

The report argues that the "relatively young and dynamic" broadband industry appears to be "moving in the direction of more competition" -- an assertion that's debatable, to say the least. In fact, one of the main arguments put forward by net neutrality advocates is that many consumers have, at most, a choice between two broadband service providers.

The FTC also says that there's no need for new laws because broadband companies aren't currently blocking Web sites. "To date, we are unaware of any significant market failure or demonstrated consumer harm from conduct by broadband providers. Policy makers should be wary of enacting regulation solely to prevent prospective harm to consumer welfare," states the report.

But this argument doesn't take into account that broadband companies surely know that Congress is currently considering legislation. Most of these companies are too savvy to start interfering with people's access to the Web now, while the issue is top of mind for consumer advocates and legislators.

In fact, late last year, AT&T agreed to implement net neutrality principles for two years to convince the FCC to approve a merger with Bell South. Certainly that deal sent a message to other broadband companies that violating net neutrality now would risk political disaster. At the time, the concession was seen as setting a de facto standard for at least the next two years, on the theory that other broadband companies would follow its lead.

But that doesn't mean they intend to follow net neutrality principles beyond next year. Consider, Verizon senior vice president John Thorpe complained to the Washington Post in February that Google was getting a "free lunch" because consumers spent so much time, and bandwidth, on the service.

As things now stand, it's not at all clear that Internet service providers plan to maintain net neutrality in the future.

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