IP Democracy: We Really Do Want our Internet

Mike Bookey, a friend of mine who recently published a book called “America at the Internet Crossroads: Choosing the road to innovation, wealth, and a supercharged economy,” likes to say that, before we start debating the details of Internet policy, we need to step back and ask ourselves (as individual citizens, as participants in a debate, and as a society) what kind of an Internet we want in the future. Without some shared sense of that, parties in an Internet policy debate have no common frame of reference and will tend to talk past each other, especially if they come to the debate with different ideologies, biases or political agendas. It may not always be easy to agree on one or more key goals, but I think Mike’s right that this is an important first step in any debate related to Internet policy.

Mike also contends that, rather than think of how the Internet best fits into our economic system, it’s becoming more appropriate to think in terms of how our economic system fits within the Internet. My interpretation of Mike’s point is that the Internet is emerging as the “nervous system” that supports 21st century economic, political and social systems. It is not simply another sector of the economy to be regulated (or deregulated) in the usual manner, where vested interests in related sectors engage in an invitation-only dance of lobbying and horse-trading artfully choreographed by well-paid legal minds to balance each other’s mix of pain and gain. It’s too fundamental and important for that.

I think an appreciation of this latter point is fueling what seems to be growing and often passionate grassroots support for the principles of network neutrality (if not always agreement on whether we need net neutrality rules or what they should be), as well as the accelerating rise of local Community Internet (a.k.a. muni-broadband) initiatives in cities large and small around the country.

I’d argue that these two trends reflect an increasingly widespread appreciation for both of Mike’s points, which together speak to the critical importance of Internet policy and favor creation of a next-generation broadband Internet that offers virtually unlimited, ubiquitous, symmetrical bandwidth, with access to the content and services this bandwidth can deliver controlled by end users, not by pipe-owners.

The latter, of course, should be paid enough by users to finance the network’s costs, but that’s a separate issue from having pipe-owners provide different levels of speed or quality to different service providers based on their business relationship (or lack thereof) with them.

In an “Internet-based” economy, users willing to pay for enough bandwidth to receive a stream of HD video should be able to freely choose which provider of HD streams deliver content to them using the bandwidth they’ve paid for. Of course, a provider of HD content would be wise to make sure they can deliver HD-quality to the local access point-of-presence, at least if they want to have satisfied customers. But the choice of how that local access bandwidth gets used is made by the end-user who pays for that level of bandwidth, not by the company that provides the bandwidth.

Of course, the role of “high-capacity, low-cost, ‘stupid-network’ bit-delivery” is a pretty radical and unwelcome departure from the traditional cable TV model, and also from the two-tiered Internet vision apparently embraced by both telephone and cable companies (though the latter prefer to let telcos do the talking and take the heat).

But, it seems to me that this really is the vision of the Internet that the vast majority of American citizens, companies and public institutions share, including web-based service providers, the financial industry and both new and established content providers, virtually all of whom are experimenting with direct-to-consumer distribution via the Internet. In a column discussing the growing number of “over-the-top” (personally, I dislike that label) content initiatives, CED magazine editor Jeff Baumgartner quotes Les Moonves:

“With this broadband channel, we’ve essentially bypassed cable and created a general entertainment outlet utilizing existing creative and content resources,” said CBS President & CEO Leslie Moonves.

I don’t claim to be a very good reader of Congress, but I’m beginning to believe that more and more of its members are sensing the reality that the vast majority of their constituents—cable and telephone companies being the notable exception—share key elements of a common vision of the Internet’s future, a vision built around fully retaining the principle of network neutrality, while also encouraging investment in networks that can put the U.S. back in the lead in terms of availability, bandwidth and service innovation.

Appreciation of this reality within the halls of Congress seemed evident in: comments and questions from both sides of the aisle at recent hearings held by members of the House Judiciary committee; the shift in vote balance on Markey’s net neutrality amendment as it went from subcommittee to committee and; the fact that, in some House races, net neutrality appears to be emerging as a campaign issue in a season when control of the House is potentially up for grabs.

Public support for an “open” Internet is also apparent in the growing number of Community Internet initiatives being considered around the country. The message to cable and telephone companies from the country at large is beginning to sound like “work with us to create the Internet we want and know is possible, or get out of the way and we’ll do it without you”—either on our own as a local community, or with the help of Internet-based service providers like Earthlink and Google and/or vendors that see muni-broadband projects as an emerging business opportunity.

There have recently been signs that incumbent access providers are starting to bid on Community Internet projects, though its not clear yet to what extent they will end up being involved in such projects. They certainly could bring assets to the table. But it remains to be seen whether local communities and incumbents can develop win-win strategies that balance the latter’s business priorities with the former’s goals for a next-generation broadband Internet. And, in many communities, there may a fair amount of distrust between the parties, as well as a preference among community leaders to avoid becoming dependent on incumbents, whose participation they may perceive as having ulterior motives and potentially conflicting priorities.

It’s my sense that Wall Street analysts largely ignore the significance of Community Internet initiatives when they model cable and telco valuations. Should that change, it could increase the pressure incumbents feel to address this potential threat to their existing business models and valuations, either through a ramping up of efforts to block these initiatives at the local, state and/or national levels, or by developing strategies for adapting their business strategies to what may be an emerging reality—that they stand pretty much alone when it comes to their vision of tomorrow’s Internet.

Posted by Mitch Shapiro on May 9, 2006 4:55 PM to IP Democracy