Department Of Justice Sides With Big Networks On Net Neutrality

Sep 6th, 2007 | By | Category: General

The Department of Justice today spoke out against the idea of Net Neutrality, cautioning against “regulations that could hamper the development of the Internet and related services”. In its filing the Department said that some regulatory proposals offered by various companies and organizations in the name of ‚Äúnet neutrality‚Äù could deter broadband Internet providers from upgrading and expanding their networks to reach more Americans.

Net neutrality is the idea that Internet providers will let you get content, such as Internet videos, from anybody, and it will be delivered with equal priority. Internet service providers would like to cut deals with big companies to deliver their content with higher priority than other Internet traffic. This could mean, for example, that a major television network could deliver content to users much more quickly, and with greater reliability, than a vlogger could.

The Department stated that precluding broadband providers from charging content and application providers directly for faster or more reliable service “could shift the entire burden of implementing costly network expansions and improvements onto consumers.” If the average consumer is unwilling or unable to pay more for broadband Internet access, the result could be to reduce or delay critical network expansion and improvement.

The Department said in its filing that it may make economic sense for content providers who want a higher quality of service to pay for the Internet upgrades necessary to provide such service, arguing that “any regulation that prohibits this type of pricing may leave broadband providers unable to raise the capital necessary to fund these investments.”

“Consumers and the economy are benefitting from the innovative and dynamic nature of the Internet,”said Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division. “Regulators should be careful not to impose regulations that could limit consumer choice and investment in broadband facilities.”

The concept of net neutrality is becoming more and more important as television, and the ad dollars associated with it, shifts to the Web. Indie content providers currently have a fairly level playing field for many types of Internet audio and video content. Giving big television networks prioritized traffic could mean that the work of podcasters, vloggers and indie video podcasters would be delivered slower and less reliably, creating a competitive disadvantage.

The Department also today argued that differentiating service levels and pricing is a common and often efficient way of allocating scarce resources and satisfying consumer demand. The U.S. Postal Service, for example, allows consumers to send packages with a variety of different delivery guarantees and speeds, from bulk mail to overnight delivery. These differentiated services respond to market demand and expand consumer choice.

“No one challenges the benefits to society of these differentiated products,” the Department stated in its filing. “Whether or not the same type of differentiated products and services will develop on the Internet should be determined by market forces, not regulatory intervention.” Despite the FCC’s call for specific information on harmful broadband activities, the Department noted that comments filed in response to this Notice of Inquiry did not provide evidence that would suggest the existence of a widespread problem that needs to be addressed. In addition, there is no consensus on what “net neutrality” means or what should be prohibited in the name of “neutrality.”

“Even assuming that a potential danger exists, the ambiguity of what conduct needs to be prohibited raises a real possibility that regulation would prohibit some conduct that is beneficial, while failing to stop other conduct that may be harmful,” the Department stated.

“The FCC should be highly skeptical of calls to substitute special economic regulation of the Internet for free and open competition enforced by the antitrust laws,” the Department said in its filing. “Marketplace restrictions proposed by some proponents of ‘net neutrality’ could in fact prevent, rather than promote, optimal investment and innovation in the Internet, with significant negative effects for the economy and consumers.”

While cautioning against premature regulation of the Internet, the Department noted its authority to enforce the antitrust laws. “Anticompetitive conduct about which the proponents of regulation are concerned will remain subject to the antitrust laws and enforcement actions by government as well as private plaintiffs, and the Department will continue to monitor developments, taking enforcement action where appropriate to ensure a competitive broadband Internet access market,” the Department stated.

One Response to “Department Of Justice Sides With Big Networks On Net Neutrality”

  1. That is on biased headline! Could it be that the DOJ sided with keeping government regulations away from ruining Internet access in the U.S.?

    I, for one, would rather not have the same people that brought you the I.R.S., the D.M.V. and the F.C.C. responsible for overseeing Internet access. Let the free markets be free.

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