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Obamacare for the Internet?

November 11, 2014

When prospective Republican Presidential nominee Ted Cruz was searching for an insult to describe President Obama’s clear support of the Neutral Netters he spat out “It’s Obamacare for the Internet”.

That’s a phrase guaranteed to jar like fingernails down a blackboard over here in Europe. We (in the UK and the US) are two nations ‘separated by a common language’ and a fundamental failure to understand each other’s attitudes to the dignity (or indignity from the other point of view) of access to universal health care or universal access to handguns.

Be that as it may, does Cruz have a point, however crassly expressed? The Internet is not healthcare; the lack of access to it will not make you sick (not physically anyway) and it will not kill you. Indeed, the whole argument might be better employed to lay bear the unedifying sense of priority our societies and political establishments have alighted upon.

But Obama (nor Cruz presumably) isn’t really saying the Internet is like healthcare. But Obama is saying it is a utility like water or electricity. First, life without the Internet isn’t impossible. It is getting more difficult but not as difficult as without water or power. These are utilities that are close to a Human Right in all developed countries, though that doesn’t stop them being cut off if you don’t pay. Otherwise, they would be a tax funded public utility free for all to use and paid for those who make enough to pay tax. Very un-American.

Utility services these days are most often provided on infrastructures built by taxes then privatised or built by companies with exclusive territories – like cable companies. But the ‘content’ – gas, power, water, is sold over that infrastructure by competing packagers. And they are all metered – the consumer pays for the amount used and the wholesale provider feeds in the amount of product needed in aggregate by all the retailers’ customers. There aren’t unregulated retailers getting on ‘the network’ on top of the ‘authorised’ retailers and reaching customers without paying the wholesaler or infrastructure landlord.

On the other hand, in all developed markets regulators ensure no one can be denied these basics. If you have a property and you want them, they must connect you to the water, gas, power. It should certainly be the same with the Internet; no one should be denied access and an adequate, efficient service should be provided at reasonable – regulated if necessary – prices.

But if I want super high-pressure water in my house I pay for a load of pumps. If I want super hi-speed Internet because I want reliable hi-def video should I pay something for that or forgo it? Or should the network be capable of that speed for everyone, no matter how much it costs?

It seems there are several potential outcomes here. Networks are completely neutral and there’s no premium charging allowed; providers lay-off investing in speed because there’s reduced return, content continues to expand and everyone’s quality of service goes down. Or, providers do invest in speed and pass all that cost on to all users – whether they are users of heavy traffic or not – basically the tax model.

Net neutrality is not Obamacare, or any kind of healthcare. It is insulting to pretend it’s that important. And that goes for both sides of the debate. There are strong arguments for regulating for access rights (for content providers and consumers) and for pricing controls to prevent quasi-monopolisitic network providers profiteering. But equally why should investors in infrastructure – or all of their customers – have to effectively subsidise the aggressive retail pricing of multi-billion dollar content companies? This blindingly obvious point has been accepted by the courts twice already and that isn’t going to change in a hurry, President Obama not withstanding. Of all the things a hemmed in President could draw a line in the sand on, this, it seems to me, should have been a lot further down the ‘to do’ list and, preferably not on it at all.



Categories: Blogs, Broadband, Business, Cable, Nick Snow, OTT, Pay TV, Policy, Regulation