If you thought “net neutrality” is primarily about preventing telephone and cable companies from blocking access to particular web sites or degrading someone else’s services and applications, you would be wrong. AT&T and BellSouth, who are seeking approval from the Federal Communications Commission to complete their merger, will voluntarily commit not to do those things. Consumer groups, however, want the FCC to impose an “additional fifth principle of non-discrimination” on AT&T and BellSouth as a condition of their merger.

If you’re keeping track, here are the four principles that are no longer subject to debate:

(1) consumers are entitled to access the lawful Internet content of their choice;
(2) consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement;
(3) consumers are entitled to connect their choice of legal devices that do not harm the network; and
(4) consumers are entitled to competition among network providers, application and service providers, and content providers.

If the FCC falls for this suggestion, to impose a non-discrimination requirement on network providers, it would outlaw the partnership, bundling and pricing strategies that are the basis for all advertising efforts. That would harm consumers, who benefit the most from advertising.

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I find it frustrating that advocates of network neutrality regulations are always so vague about what, exactly, they think the telecom companies would do if we preserve the status quo. Here’s the closest that Yochai Benkler has come (as of p. 240) in The Wealth of Networks to describing a specific threat:

As long as [broadband access is] open and neutral among uses, and are relatively cheap, the basic economics of nonmarket production described in part I should not change. Under oligopolistic conditions, however, there is a threat that the network will become too expensive to be neutral as among market and nonmarket production. If the basic upstream network connections, server space, and up-to-date reading and writing utilities become so expensive that one needs to adopt a commercial model to sustain them, then the basic economic characteristic that typifies the network information economy–the relatively large role of nonproprietary, nonmarket production–will have been reversed. However, the risk is not focused solely or even primarily on explicit pricing. One of the primary remaining scarce resources in the networked environment is user time and attention. As chapter 5 explained, owners of communications facilities can extract value from their users in ways that are more subtle than increasing price. In particular, they can make some sites and statements easier to reach and see–more prominently displayed on the screen, faster to load–and sell that relative ease to those who are willing to pay. In that environment, nonmarket sites are systematically disadvantaged irrespective of the quality of their content.

I’ve discussed the issue of blocking or slowing down sites here, so I won’t re-hash that discussion. I think the fear is overblown, but I can at least imagine how such a scheme might work. In contrast, his suggestion that a broadband ISP might make favored content “more prominently displayed on the screen” than non-favored content strikes me as fantastically implausible. I’m having trouble imagining an even halfway plausible scenario in which that might happen.

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