By comparison, even Verizon FIOS looks like dialup.

You Can’t Regulate
Innovation—
or Can You?
When the FCC announced plans
to increase its minimum definition
of broadband from 200Kbps to
768Kbps, opponents of regulation
fumed. To be clear, the FCC does

ing relationships with the ISP or its partners? And if an ISP can do these things, is it obligated to tell its customers that it’s doing them?

Several of these questions are being tested in the case of cable ISP Comcast, who was found to be blocking Bit Torrent file-sharing traffic. Despite initial claims that said traffic was being blocked during periods of high-traffic,

achieve a greater good than perhaps the market could produce purely on its own.

In a non-free market like broadband, innovation is not going to magically materialize on the goodwill of executives and shareholders. The two options are to increase competition or increase regulation. Fortunately, the two need not be mutually exclusive.

IN A NON-FREE MARKET LIKE BROADBAND, INNOVATION
IS NOT GOING TO MAGICALLY MATERIALIZE ON
THE GOODWILL OF EXECUTIVES AND SHAREHOLDERS.

not require providers to meet a minimum service level, but the FCC does need some metric to define the very meaning of “broadband.”

In 2007 the National Telecommunications and Information Administration reported on progress toward George W. Bush’s promise to achieve “ universal” broadband by that year. Their conclusion: mission accomplished. Never mind that 200Kbps is hardly worth being considered broadband in any first world nation, and that a single resident with “broadband” in a ZIP code was counted as valid for every resident.

Perhaps the most well-known battle over Internet regulation is the subject of “net neutrality.” Does an ISP have the right to manage network traffic in any way that it wants? Can an ISP block a particular protocol or network service because it consumes a lot of bandwidth? What about blocking or slowing down traffic to sites that have compet-

tests eventually proved that the blocking was in fact continuous. Moreover, Comcast originally denied blocking at all—effectively taking customers’ money for “Internet access” while in practice, secretly inhibiting their ability to fully access the Internet. The FCC has found Comcast in violation of network neutrality principles, but lacking a strong regulatory framework enshrining these in law, the agency has limited recourse.

It is commonly said by anti-reg-ulationists that “you can’t regulate innovation.” True enough—we can’t force a business to innovate. But we can add incentives that work against complacency and stagnation. After all, we have regulations for voice communications for a reason—at one time, we accepted that a robust voice network was vital to the country’s social and economic well-being. We regulate fuel efficiency standards for vehicles because we accept that this is necessary to

Competition in the broadband market is slowly improving, thanks to enhanced technologies like wireless, but realistically it will be years until truly vibrant competition might exist nationwide. Policies which encourage competition—such as legislation that opens more wireless spectrum— are welcome. In the meanwhile, there is a case to be made that regulations, which push broadband providers to provide open access with minimum service levels, might prevent our information sector from resembling the wheel of Swiss cheese that is rapidly becoming the insufficien~tly regu- _{lated world of finance.}

DOI: 10.1145/1435535.1435545

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