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FCC Fail — Providing incentives for scarcity

There are many ways to boil down today’s upcoming FCC rejection of Net neutrality (which they did in the guise of supporting Net neutrality). Here’s one:

The end of Net neutrality means that those who provide access to the Internet — to our Internet, for it is ours, not theirs — have every economic incentive to keep access scarce. By not providing enough bandwidth, they can claim justification for charging users per bit (or per page, service, download, etc.), and justification for charging Net application/data providers for the right to cut ahead in line.

This is ironic — in the not-funny sense — since the access providers’ stated justification for opposing Net neutrality is because to do otherwise would discourage investment. But, why are they going to invest in providing more bits when they make more money by throttling access? (Competition? Sure, that’d be great. Let’s require them to rent out their lines. Oh, I forgot.) Abundance would turn access provision into a profitable commodity business, which is exactly what users want, and what would stimulate innovation and economic growth.

So, now that Net neutrality is going to be overturned, the access providers will make money by preventing access. Anyone want to bet that the U.S. is now going to climb the charts of average national broadband rates and of lowest average cost? Does anyone think that we haven’t just moved back by decades when we’ll have, say, gigabit access common across the country?

For shame, FCC.

[Later that day] The FCC has clarified some of what it means. For example, they are not going to allow access providers to charge companies for fast lane access. It seems that Commissioners Copps and Mignon nudged the regulations in the right direction. Thank you for that. (Also, see Harold Feld’s take.)

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