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Net Neutrality: Lessons from the Past

An Internet without net neutrality might become as fragmented as U.S. mobile phone networks, say some observers. But history may hold even richer lessons.

By Wade Roush

Thursday, August 03, 2006

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Critics claim that without net neutrality, the Internet will be plagued by the same problems as the cell-phone networks: an oligopoly will emerge, innovators will be edged out, and technology will stagnate.

But some experts say history offers even more compelling lessons for those envisioning an Internet where content providers can pay to get their messages to customers as fast as possible.

Transformations in the telegraph industry in the mid-19th century provide one scenario for what can happen when owners of large networks extend their influence. During the Civil War, Western Union began controlling telegraph trunk lines across the country, and, by acquiring competing companies, achieved a near-monopoly by 1866. Rivals continued to rise up -- even the U.S. Post Office stepped forward, proposing to run telegraph lines to underserved communities along postal roads. But Western Union simply bought up its rivals, and manipulated prices to undercut popular and Congressional support for a postal telegraph system. While the company continued to expand its telegraph network throughout the 1870s and 1880s, it focused on serving business customers, forgoing innovations that would have made it more affordable for the press or private citizens to communicate by telegraph.

"There does seem to me to be a historical analogy" with the current telecommunications marketplace, says Paul Starr, a social historian at Princeton University, who wrote about telegraphy and other early forms of telecommunications in his 2005 book, The Creation of the Media. "In both cases, the incumbents that dominate networks have tried to exploit their existing position rather than innovating."

The current net neutrality debate stems from a similar tension between open innovation and monopolistic control. Under a principle dating to the beginning of the Internet, all bits are created equal. Your friend's blog is delivered to you over the same connections, and at the same speed, as the home page of the New York Times; and startups have the same ability to reach potential customers as big business.

But the companies that own the main Internet connections in the United States, including AT&T, Verizon, the other Baby Bells, and cable TV providers, want to offer businesses access to faster, private connections for a premium.

All cellular connections occur over privately owned networks, of course, so the analogy between a non-neutral Internet and the mobile-phone network is a provocative one. The comparison has drawn plenty of discussion on the Internet since July 21, when an anonymous essay attacking the telecom industry appeared on NewsForge, a site for user-contributed news. The writer used the pseudonym "James Glass" and called himself a discouraged developer of software applications for mobile phones. He argued that the cellular carriers -- who control which handsets consumers can buy, what software can run on those handsets, and how data gets to them -- are so protective of their networks, and impose so many arbitrary requirements on outside developers trying to make their software available to cellular subscribers, that many innovators walk away in frustration.

"It doesn't take much imagination to imagine Verizon treating their Internet property just like their cell phone network -- short-sightedly milking it for all it's worth, at great expense to the public, and to the future," Glass wrote.

Mark Donovan, a senior analyst at M:Metrics, a Seattle market research firm that monitors mobile commerce, agrees. "The cable and long-distance companies would like to look a little more like mobile phone companies, in terms of their ability to control traffic on the Internet," he says.

How would that change the way the average Web surfer experiences the Internet? Donovan gives one example: "In a world where the Internet looked like the mobile phone world, Google might be really fast on Comcast's cable Internet service, but would no longer be a 'premium' experience on a network where they don't have a commercial arrangement."

Comments

  • [no subject]
    Telecom companies certainly have an absolute right to their private property, intellectual or otherwise. But experience has shown that, given unfettered expression of that right, the overall right of the rest of the population to develop new private property is deliberately hampered. On the basis of what is fair and just, and the relevant history being what it is, I vote for net neutrality.
    Rate this comment: 12345
    Guest (The Teacher)
    08/03/2006
    Posts:1
  • Net Neutrality -- no need for lessons from the past
    No examination of Western Union's practices a century and a half ago is necessary.  One need only look to the practices of Comcast and the rest of the cable television providers.  Nonetheless -- for the record -- the practice of buying up the competition ala' Western Union rather than innovating and competing certainly hasn't been lost on today's telephone/cellular oligopolies.  And -- hey -- aren't they largely the same companies lobbying against net neutrality?
    Rate this comment: 12345
    Guest (Richard Tedrow)
    08/03/2006
    Posts:1
  • Radio Neutrality
    Sadly, it seems that nothing ever gets resolved.

    Back in the day when radio was still fairly new, Marconi and then RCA-equiped stations were only allowed to communicate with other Marconi or RCA stations.  This was an attempt to control the market, obviously.

    It's a fairly good analogy for the current debate, because they weren't using different standards than anyone else.
    Rate this comment: 12345
    Guest (Steve)
    08/03/2006
    Posts:1
  • umm...of course the federal government had granted monopoly status to AT&T...
    I don't know much about Western Union and government's role in the 1800s... it's a shame though that we've had no innovation and that we're still sending the same telegrams around.
    Rate this comment: 12345
    Guest (Robert Johnson)
    08/03/2006
    Posts:1
    • innovation?
      The way that monopoly (telegraph) was broken was when a whole new technology (telephone) came along.
      Of course, that eventually developed its own monopoly.

      What new technology might come along to replace the internet?
      Rate this comment: 12345
      Guest (mjc)
      08/03/2006
      Posts:1
  • Consumers will determine the future of net neutrality
    The mantra of cable companies and telcos has long been that they want to be more than purveyors of dumb fat pipes. However, you don't need to look very far back in history to see why tiered service will not work. Compuserve, AOL, Prodigy, Excite@Home are all examples of failed tiered services and demonstrate how telcos and cable companies have no idea what consumers want when it comes to content. At the end of the day, consumers want a reliable fast pipe and they want the ability to get to whatever services they choose. If I can not get Skype, Google, Youtube, P2P, IM whatever in a fast and reliable way, I will switch providers. For example, a major Canadian broadband provider recently shut down access to P2P file sharing services due to the high bandwidth usuage. They lost 10% of their broadband customer base in 3 months.

    What sounds like a great strategy in a telco board room will not, in my opinion, work in the real world.
    Rate this comment: 12345
    Guest (Stuart Lombard)
    08/03/2006
    Posts:1
    • Re: Consumers will determine the future of net neutrality
      What you are saying is true but in many parts of the country there are a very limited number of broadband providers to choose from. Where I live there is only one, Time-Warner. I could switch to DSL but again I would only have one provider available.
      Rate this comment: 12345

      freeflight
      09/03/2006
      Posts:1
  • Net-Neutrality or Net-Nepotism an important choice for US
    The USA is ranked 20th at best by some US/EU surveys in telecommunications (voice/data, infrastructure, services, cost...) of the developed countries. There may even be a third world country, which proportionately has better telecommunications infrastructure, services, and cost then the USA. This is today's reality for the USA and letting the tele/cable-cos and politicians destroy Net-Neutrality will further trash our economy and push US eventually in to a third world WMD super power.

    Corporate welfare [AKA: Corporatist Communism] is destroying capitalism and democracy. Net-Nepotism is more of the same corporatist communism.
    Rate this comment: 12345
    Guest (J.D.Bailey)
    08/03/2006
    Posts:1
  • Net Neutrality
    It took a massive assault by the Justice Dep't to break up the ATT monopoly; despite exemplary innovation at Bell Labs the public could only lease a black phone that would last forever, thereby assuring a robust stream of rental income. I suggest that the cell pnone companies' restrictive policies (especially over instruments) may invite the same scrutiny soon, if not now.
    Rate this comment: 12345
    Guest (A H Rosen)
    08/03/2006
    Posts:1
  • [no subject]
    Rate this comment: 12345
    Guest
    08/09/2006
    Posts:1

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