Allowing ISPs to sell your bandwidth to someone else is not economic freedom

by Steve Blum • , , ,

The American Enterprise Institute (AEI) – the Washington, D.C. consulting group that ate the brain of beamed down to the Federal Communications Commission as the Trump administration prepared to take office – is sounding off about paid prioritisation (h/t to the Baller, Stokes & Lide list for the pointer). The fight over that particular concept is shaping up to be the front line of the network neutrality battle as it shifts from the FCC to the courts, congress and the states.

Monopoly telephone and cable companies disingenuously say they are willing to forgo blocking and throttling your Internet traffic, so long as they can prioritise it based how much money they’re getting from content companies. But allowing one particular video platform to stream on ahead means holding back – blocking and throttling – all the others.

AEI’s case on their behalf begins with the idea that prioritisation is sometimes a good thing – video is more sensitive to network congestion than, say, email. Fair enough. But its argument starts to wobble when it dismisses out of hand the idea of prioritising potentially fragile traffic, such as video, on a neutral basis – all video gets equal priority – and then collapses completely when it claims that the only fair way to do it is by selling the place at the head of the line to the highest bidder.

The debate over paid prioritisation isn’t about consumer choice. It’s about whether monopoly broadband providers can sell the bandwidth you’ve already paid for to someone else. In a competitive marketplace, that wouldn’t be of much of an issue – if consumers had the information and freedom to switch between neutral and sponsored bandwidth at competitive prices, the decision would be theirs. But when all that’s on the table is take it or leave offers from monopoly providers, there’s no choice at all.

Broadband, as it’s offered today in the U.S., is a classic example of a common carrier service. When it repealed net neutrality rules, the FCC deliberately ignored that simple truth. Fortunately, it has not yet had the final word.