es and applications offered by search engine companies, online content providers, and Internet portals.

The fundamental fact of the U.S. broadband capabilities is that we have a landline duopoly consisting of the cable companies and the “telephone” facilities—cable data and DSL. Each member of the duopoly is expanding their physical plant—both are evolving to fiber to either the home or close to the home and both are targeting a complete set of subscriber services from phone to video to data. In the long run there is no obvious winner in terms of technology and maybe even in terms of services offered. In the short run the competition between these duopolies encourages the modernization of their physical plants and the enhancement of their services.

All this sounds great for all. So where is the problem? The issue of Net neutrality first arose in the public’s view in a remark by one of the carriers—SBC (now the “new ATT”) —that services that use the facilities provided to reach their customers should pay a fee to the carriers for the use of their facilities. This trial balloon raised a firestorm with Internet-based companies such as Google who essentially argued that their customers were paying their Internet access fees in order to gain access to Google’s services and that Google was paying the terminating carrier directly for high-speed access. They and others demanded that the U.S. Congress pass laws requiring essentially open access to the data networks on an equal-ser-vice-to-all basis. They asked the FCC to exercise their regulatory powers to require this in the absence of any specific Congressional actions.

there is one constant
about the Internet:
it has continued
to evolve and change,
often in ways
none of us would
have predicted.
I am concerned that
we may succumb
to fears about
possible dangers
to the Internet’s
future and react
with proposals to
legislate or regulate
its operations.

In both cases the cure might be worse that the disease. The ability of the U.S. Congress to pass effective legislation in the telecommunications area is open to question. The Telecommunications Act of 1996 was an attempt to provide unbundled access to the last-mile wire loop in order to allow and encourage the rise of alternative data carriers. Experience has shown that this portion of the bill was worse than ineffective. Those companies who believed the law would be effective lost a lot of money as the incumbents resisted and were forced to the courts. The incumbents argued that the existence of these unbundling obligations undermined the incentives for the incumbents or anyone else to make the heavy investment required for building new next-generation broadband networks. Counting on the FCC has yielded mixed results. Like Congress, its decisions are subject to influence by political considerations and special interest goups as administrations come and go. The FCC has a minimum amount of technical knowledge about the Internet and thus even when it acts, often misses the mark and can end up in lengthy court actions that an innovative new company cannot survive.

Recently there have been a number of activities that have been attacked, sometimes validly, as being against the public good and against the FCC guidelines. The result of this was an FCC action telling Comcast to stop a particular form of network action being used by them for network management, There were public hearings prior to the ac-

tion during which time there was a mix of technical input and public discussion, all informal—that is, not sworn testimony as required in formal hearings. I will not argue the validity of the criticism, except to say technique used seemed not to actually work but I would comment that the procedure, such as was used, most likely is not an effective way of gathering critical technical information and is all too easily turned into a political show. It is also possibly illegal but the courts will eventually determine that when someone sues.

One of the major dangers that face the future of Internet business is whether those who control our access to the Net will implement procedures under the guise of managing the Net that will discourage competition to those services they offer—such as video over the Internet competing with the cable delivery of the cable operator.

In an Op-Ed article in the Washington Post in January 2007, Michael Katz, Christopher Yoo, Gerald Faulhaber, and I argued: “Public policy should intervene where anticompetitive actions can reliably be identified and the cure will not be worse than the disease. Policymakers must tread carefully, however, because it can be difficult, if not impossible, to determine in advance whether a particular practice promotes or harms competition. Current antitrust law generally solves this problem by taking a case-by-case approach under which private parties or public agencies can challenge business practices and the courts require proof of harm to competition before declaring a practice illegal. This is a sound approach that has served our economy well.”^a

Today, innovation and enhancements can occur at all levels of the Internet. Network providers, applications providers, portals, search engines, and content providers can all innovate in various ways and make needed improvements that can benefit the Internet’s evolution. We should encourage this innovation, while preserving the other core strengths of the Internet: its cooperative spirit and openness to en-

a Farber, D., Katz, M. Hold off on Net neutrality.

Washington Post (Jan. 19, 2007), A19; http:// www.washingtonpost.com/wp-dyn/content/ article/2007/01/18/ AR2007011801508.html.

feBRuaRY 2009 | vol. 52 | No. 2 | CommunICatIons of the aCm

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