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Net Neutrality: Who’s David? Who’s Goliath?

- June 6, 2006 - 0 Comments

SAN JOSE, CA – This net neutrality issue is vexing to me. It isn’t consistent. First, the Internet’s success has been largely because it has been an unregulated communications tool that has benefited everyone. The companies that are advocating the hardest for so-called “net neutrality” principles are actually advocating to regulate the internet and have the government intercede in what is at its core a market issue. Yet, they are somehow being viewed as the good-guys and for the little guy. How were they successful in defining the debate this way? I guess since they really only care about one side of the value chain of the Internet – the side that touches the users – they are viewed as representing the “little guy,” the end-user, the consumer. In reality, they are using their market power and big business lobbying oomph (that is a technical term) to shape the debate so that they can benefit from the network but don’t have to invest in it. The “other” side of the debate, mainly the service providers, are trying not to get their hands tied in developing next generation networks with speeds and feeds that will be able to support all the high-bandwidth consumer and business applications that are coming down the pike. They actually care deeply about consumers as well, which is why they are seeking help from their large users (see pro-net-neutrality advocates above) to pay for differentiated services and quality of service which will help offset the huge cost of their infrastructure investment. Otherwise, you know where those costs will go? Bingo. The consumer. So, in a real way, the pro-net neutrality crowd while claiming to represent the best interest of the consumer is really just trying to have the consumer pay for their right to ride the service provider networks.I also did a little math on the companies that are involved in this debate since it really does seem to be viewed as a “David” (Pro-Net Neutrality) versus “Goliath” (Anti-Net Neutrality) debate. Those big, bad service providers are trying to make the little, ol, start-up companies pay to send their huge applications to consumers that consumers wouldn’t normally be able to access with their basic broadband package. Wait a second? Who are the big, bad companies here? In mid-market trading today, the top 6 PRO-net neutrality companies had a market capitalization of $547 Billion (GOOG, YHOO, AMZN, MSFT, INTC, EBAY). The service providers and anti-regulation, so-called anti-net neutrality crowd has a market capitization of $448 Billion (ATT, Q, CSCO, TWX, Comcast, BellSouth). So, who’s the David and who’s the Goliath? To be sure, this is all big business. I’m just not sure why those who have benefited so greatly from light-touch regulation of the Internet to begin with would be so strongly advocating regulation now. Could they have dollar-signs in their eyes?

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