Best Web Regulator Not Necessarily Net Neutrality

Market forces have served the Web’s development well, without the heavy hand of regulators

By Greg Ip of the WSJ. Excerpts: 

The new regulations "will enable it [the FCC] to ban a practice known as “paid prioritization”—basically, price discrimination by another name."

"the pipes that carry Internet traffic are overwhelmingly owned and operated by heavily regulated telephone and cable companies. Yet those companies are largely left alone to decide how to handle, and charge for, that traffic.

To date, however, they haven’t charged content providers fees in exchange for moving their data more rapidly over their network. Net neutrality advocates fear if paid prioritization is allowed, deep-pocketed companies like Netflix, Google and Amazon would buy access to the fast lane while cash-strapped startups and nonprofits are relegated to the Internet’s darker, congested corners."

"Nicholas Economides, an economics professor at New York University, says paid prioritization would let ISPs pick the Internet’s winners, which would naturally be the richest players."

"Yet a blanket ban on paid prioritization could also do damage. Instead of Netflix and its customers bearing the cost of the congestion they create on the Internet, all users would."

"“Somebody has to pay for the infrastructure,” said Hal Singer, a consultant and scholar at the Progressive Policy Institute. If ISPs can’t charge content providers, they’ll charge consumers, who generally are more price-sensitive, and the result will be less usage.

A ban on paid prioritization could also kill off experimentation with new business models, such as letting content providers sponsor customers’ access in return for preferential delivery of their content, as Facebook does over wireless networks in many lower-income markets."

"as capacity rises, content providers have less incentive to pay for priority.

Reclassifying broadband Internet would empower the FCC to not just impose net neutrality, but to regulate prices and access to ISPs’ networks."

"Regulating an ISP like a monopoly could undermine the incentive to invest in new capacity and different technology."