Obama backs net neutrality

The Herald reports:

US President Barack Obama has embraced a radical change in how the government treats Internet service, coming down on the side of consumer activists who fear slower download speeds and higher costs but angering Republicans and the nation’s cable giants who say the plan would kill jobs.

Obama called on the Federal Communications Commission to more heavily regulate Internet providers and treat broadband much as it would any other public utility. He said the FCC should explicitly prohibit Internet providers like Verizon and AT&T from charging data hogs like Netflix extra to move their content more quickly. The announcement sent cable stocks tumbling.

The FCC, an independent regulatory body led by political appointees, is nearing a decision on whether broadband providers should be allowed to cut deals with the content providers but is stumbling over the legal complexities.

“We are stunned the president would abandon the longstanding, bipartisan policy of lightly regulating the Internet and calling for extreme” regulation, said Michael Powell, president and CEO of the National Cable and Telecommunications Association, the primary lobbying arm of the cable industry, which supplies much of the nation’s Internet access.

This “tectonic shift in national policy, should it be adopted, would create devastating results,” Powell added.

Netflix swung behind Obama, posting to its Facebook page that “consumers should pick winners and losers on the Internet, not broadband gatekeepers.”

“Net neutrality” is the idea that Internet service providers shouldn’t block, slow or manipulate data moving across its networks. As long as content isn’t against the law, such as child pornography or pirated music, a file or video posted on one site will load generally at the same speed as a similarly sized file or video on another site.

This will be interesting to see how it resolves. I back the principle that ISPs should not deliver some content to customers slower, unless the content host pays a surcharge.  But the Government should only intervene if there is a serious problem that the market doesn’t solve. The best solution is to have a competitive access market, so that if an access provider tries to charge more to speed up content, customers go elsewhere.