Network neutrality and the false idol of innovation

by Andy Oram

Virtual sirens have gone off around the country, and the digital ramparts are swarming with thousands of new recruits protesting plans by the telephone industry to levy new fees on Internet sites. The industry wants to charge extra for preferential treatment, so that sites that stream audio and video have more chance of giving their users a pleasing experience. The debate has excited public fury way more than any issue I've seen during the fifteen years I've been following the telecom industry.

Telephone companies are trying to hold off government regulation by invoking the perennial American worship of innovation. But if there's anything the industry hates more than government regulation, it's government investment. Surely--say the CEOs, along with a battery of academic economists wielding standard financial models--government moves too slow and has too many vested interests to pick the right technologies. In a fast-moving culture of technology, innovation would be crushed.

And the industry pulls out the same mantra in attacking municipalities who invest in copper, fiber, and wireless networks. Government investment? Must be inimical to innovation.

But my analysis suggests just the opposite. Government investment in networks will promote innovation. It's time to smash the idols. This article explains why.


1 Comments

Tom Adelstein
2006-05-17 11:31:38
Outstanding work.