(Steve Forbes is chairman and editor-in-chief of Forbes Media.
The opinions expressed are his own.)
By Steve Forbes
June 9 Special-interest groups are calling for
public-utility regulations to be placed on the Internet - the
most innovative and society-shaping deregulatory success story
of our time. These people are trying to exert control over the
Internet through "net neutrality" regulations that will likely
benefit only a few huge Internet companies and the top 1 percent
of Internet users.
Net neutrality was developed to ensure that Internet users
had the freedom to view all the legal content they wanted.
Recently, however, there has been a shift in focus: Some of the
largest Internet companies are citing "net neutrality" as a
reason to enshrine specific privileges that largely benefit
If these content companies get their way - and the Federal
Communications Commission is now deliberating this - Americans
will be forced to shoulder the costs for the high-speed networks
and infrastructure upgrades needed to support high-volume
Internet traffic generators, such as Netflix.
Whether they use those services or not.
The math is simple. As a network carries more traffic, it
has to grow or it will become congested. To expand a network
requires significant investment and expense - tens of billions
of dollars a year in the case of Internet service providers
These costs can be recovered in two ways: Either by charging
all consumers equally or by having the large companies that use
far more of the network resources pay their fair share.
In the real world it is reasonable and even expected that
people pay more for a resource they use more than others. Under
the guise of net neutrality, however, the large companies want
everyone to pay more so that they and their users - the people
consuming the bulk of the resources - do not have to.
Net neutrality advocates claim they are doing this for the
good of the Internet and to protect future startups. But neither
claim stands up to even the faintest scrutiny. They are both a
cover for a bold-faced attempt to force the many to subsidize
the powerful few.
The only way the Internet can thrive is if all parties have
incentives to improve - and more efficiently use - our
high-speed networks. If Internet service providers are forced to
serve as mere intermediaries, carrying content for other large
companies, there will be little motivation for them to invest in
their networks and foster innovation. Similarly, there will be
no incentive for the heavy-traffic-generating companies to
develop new ways to reach their consumers.
As for the small companies and startups that the proponents
of Internet regulation are allegedly trying to protect, they are
the ones who benefit from the kinds of creative network
arrangements now available in the absence of Internet
regulations. These arrangements differentiate them from the
larger, more established companies who have developed their own
ways to provide faster service to their consumers built on
existing service provider networks.
No startup or new-market entrant can afford to spend
considerable resources on their own global networks. That's why
the arguments from the large-content providers are self-serving:
They have preferred access to consumers and want to keep it that
Contrary to the claims from those who are now most vocal in
calling for 1930s "common carrier" regulations - dating from the
age of the telephone-monopoly - be placed on the modern
Internet, their true aim is to ensure that a small handful of
companies do not pay their share.
Though that may be a successful, if questionable, business
model for them, they risk subjecting the Internet to stifling
regulations that will deter the long-term investments needed to
power our Internet economy.
Regulators at the FCC and those on Capitol Hill who support
the large content companies should be able to recognize this
masquerade - and abandon any effort to impose public utility
regulations on the Internet.