I was excited to learn that my first column here at iMedia Connection was to be about Net Neutrality. It seems that -- now that major brands have entered our space -- the companies that manage the transmission and delivery of our bits and bytes see the future, and they want more of it.
On June 8, the House of Representatives overwhelmingly passed a Bill that would allow telephone companies to offer competitive, bundled packages of telecommunications services in new markets, but it rejected the Net Neutrality provision which would ensure equal access to online content to all customers. The Bill now heads to the Senate for hearings. Analysts claim it likely will not be addressed with a vote during this Congress, though some amendments may find their way into a larger telecommunications bill. That's where this will probably reside, ultimately, in more comprehensive legislation.
This activity represents the first major telecommunications legislation to hit Congress since the Telecom Reform Act of 1996, which was signed into law in February of that year and is what brought me (and ultimately, most of you) into this nutty business in the first place. See, without the Telecom Reform Act of 1996, much of the investment that paved the way for the web explosion in the ensuing years would not have occurred.
Let that be your first hint as to the direction of telecom legislation in most recent decades. Suddenly, after the passage of this 1996 law there was a lot of money free to be invested. Why was this? Because it lifted constraints in media and transmission ownership and investing.
That law was the first major telecom law passed by Congress since 1934, but it probably wasn't as important as the breakup of AT&T by a Federal Judge in 1982. What has been termed the "Modified Final Judgment" (MFJ) by those in telephony is regarded as the beginning of modern telephony policy in the United States, if not -- ironically -- the end of modern telephony advances.
What has happened since the passage of the MFJ is that companies in regulated industries have expanded and contracted their numbers and market breadth as it has fit their top-line revenue models. AT&T became the seven RBOCs, or Regional Bell Operating Companies (remember NYNEX, PAC Bell and Bell Atlantic?). And then there was talk about convergence with the cable companies, who had something called a "wide pipe."
Since then, AT&T, which stockpiled outrageous gobs of cash despite having inferior mobile service and having to deeply discount its premier offering -- long distance -- due to more competition, has taken over Cingular through its majority ownership of Bell South.
How did AT&T, which seemingly everyone thought was the loser in the MFJ and the Telecom Reform Act, become the owner of one of the largest mobile phone brands in the US?
They did so because there is such a ridiculous amount of money in telecom. Major telecom in this country implies regulated profits for the largest providers for more than 30 years. Has it brought us the very best service? Has it implied better telephony in the United States than abroad?
Well, no. It hasn't done so across the board, especially when compared to the all-digital service enjoyed in some far eastern countries, or compared to the mobile service that costs a whole lot less and works better in, say, Brazil than it does here. Does that rankle you?
The fact that ours is not the most advanced broadband backbone is being used as the defense for charging more to some users than others by the companies who own and maintain this "wide pipe." So, while they're making billions of regulated dollars anyway, they say that they aren't making enough for the R&D efforts necessary to keep ours the most modern system.
Who are the companies who were happy with the lopsided vote in the House against Net Neutrality? It's AT&T, Verizon, Comcast and companies who provide the pipe and access to it who want Congress to eliminate Net Neutrality. Who are for Net Neutrality? Every content organization in the world -- from Google to Yahoo! to MSN to the Christian Coalition to MoveOn.Org -- they all want it.
There is very little chance that anything on Net Neutrality is going to move through this Congress prior to mid-term elections in November. So, while this early, lopsided vote is perhaps alarming, it's really more of a clarion call to opponents than anything else. Now these broadening coalitions can get their act together on Capitol Hill, because an increasing number of the people who depend on the internet (which was, by the way, initially created with Department of Defense dollars) have begun to understand that the democratic internet would be in danger if Net Neutrality was legislated out of existence.
Have you ever wondered why your basic cable bill is $45/month or so when regular TV used to be free-- and there are more commercials now than there were 20 years ago? I know-- I'm in the advertising business, too. The media landscape has changed dramatically in our lifetimes. But, adding a fee-based structure to the internet would stratify our media just as it is really growing. While that may be good for the top-tier sites and advertisers among us in the short term, I think it would be bad for our medium as a whole in the long term. I also wonder how good it would be for the top-tiered sites anyway.
Take a look at that list of those above who want Net Neutrality left alone. Sure, they use a ton of bandwidth and are perhaps among those who would be subject to a fee structure in a stratified internet. But, they can bring serious advocacy among a broad cross-section of media types. And they understand what that hint I referenced earlier is about.
Rather than freeing up constraints, and therefore capital for investment, defeating Net Neutrality would create a toll-zone for the better services the cable and telecom companies should have been developing-- and have claimed to be developing all along.
As Lawrence Lessig and Robert W. McChesney wrote in the Washington Post on the day of the vote, and John Battelle published in his blog, "Congress is about to cast a historic vote on the future of the internet. It will decide whether the internet remains a free and open technology fostering innovation, economic growth and democratic communication, or instead becomes the property of cable and phone companies that can put toll booths at every on-ramp and exit on the information superhighway."
Our federal regulatory and judicial environments today are far different from what they were in 1934, or even in 1974. Both the MFJ and The Telecom Reform Act demonstrated federal resolve to free up ratepayer dollars for private enterprise. As income disparity in the country gets measurably worse, so would the basic services that pretty much anyone reading this column takes for granted on a day-to-day basis. Net Neutrality is a guard against that disparity getting worse. If it goes away legislatively, so will much of what is best about our medium for the consumers we've learned to reach better than anyone else.
Mark Naples is Managing Partner for WIT Strategy, a strategic communications consultancy that serves clients who do business on the web in the United States, Europe and Latin America. Read full bio here.
