We’ve said before that “network neutrality” is a red herring. The real bottleneck is the cable television set-top box (STB). Silicon Valley continues to argue with the FCC, and with Comcast, AT&T and Verizon, about network neutrality, while saying nothing about the STB. The Courts have twice struck down FCC action on network neutrality, saying that the Communications Act is unclear as to the FCC’s authority to regulate the Internet. On the other hand, the Communications Act contains a clear statutory directive to the FCC to create an open market for STBs.
Most people get their broadband Internet connection from their cable TV company, i.e., Comcast, Time Warner, Charter, Cablevision, Cox, Verizon Fios or AT&T U-verse. Think of a cable TV system as a 50 lane highway. Now imagine that 2 lanes are devoted to the cable modem that provides you with your broadband Internet connection. What about the other 48 lanes? Those lanes are controlled by the cable company by virtue of its control of the STB.
Congress amended the Communications Act years ago and specifically directed the FCC to remove that roadblock, but years later, the FCC has failed to act. As a result, we read reports that Apple, for example, is forced to negotiate with Comcast and Time Warner to allow subscribers to use an Apple STB. But a consumer should be able to buy and use whatever STB she wants, from Apple, Google or Amazon. And that STB should give the consumer complete control over how she uses all 50 lanes.
If she needs more broadband, she should be able to use more lanes for bandwidth for the broadband services she wants, and fewer lanes for services she doesn’t watch. Huge broadband capacity is already coming into her home, both in the last mile and the transmission network. The problem is that the cable TV STB blocks off 48 lanes of traffic, and thereby stifles the innovation that Silicon Valley seeks to promote.
Silicon Valley is focused on the FCC proposal to allow broadband providers to charge for higher speed access. Some Silicon Valley commenters, like Mozilla, suggest the FCC should regulate the Internet like the FCC regulates common carrier telephone service under Title II of the Communications Act. This seems counter-intuitive to us.
Most people get their wireless Internet access from Verizon Wireless and AT&T Wireless, services that are already classified as a common carrier service. AT&T introduced sponsored data on AT&T Wireless (not AT&T U-verse) precisely because AT&T Wireless is a common carrier service. The fact is, common carriers are allowed to charge for service, so long as their charges are reasonable and non-discriminatory, and under this standard they historically have been allowed to charge more for heavy traffic than for light traffic. Like any market, price depends on supply and demand. What’s driving up the price is not demand, rather, it’s an artificial constraint on supply.
The supply choke point is the STB. A speed problem only appears to exist on the Internet because cable TV companies use the STB to block consumer choice over how the consumer uses what we’ve called 48 lanes of the 50 lane highway and squeeze “the Internet” on to 2 lanes (the reality is much worse than our simple example). The real way to achieve “network neutrality” is to get the FCC to enforce the law that is on the books, open the market for STBs and give consumers complete control over how they choose to use all 50 lanes of the digital highway that already comes into their homes.