Net neutrality

June 30, 2005

THE SUPREME Court this week issued two decisions involving the Internet. The bigger headlines went to the ruling that made file-sharing services liable for users' copyright violations. But the other decision - saying cable systems don't have to share their lines with other Internet providers - may have the more profound impact.

This ruling hinged on whether cable broadband providers must be classified as telecommunications services by the Federal Communications Commission and thus must share with competitors their connections to households. The FCC, instead, had defined cable broadband as an "information service" not subject to the common-carrier requirement of the 1996 Telecommunications Act - and the Supreme Court on Monday backed the agency's authority to do so.

The ruling goes a long way toward creating a duopoly controlling the last mile of communications pipes to American households. Cable systems won't have to share their networks with competing broadband services. Phone companies, not directly addressed by this decision, are now likely to pressure the FCC to give their digital subscriber line (DSL) services the same protection from competition.

The likely outcome: Most Americans will have no more than two choices for broadband services, their cable company or their local heir to the former Bell monopoly, and that's virtually certain to mean sharply higher charges for high-speed Internet connections.

Moreover, cable and phone companies could block competing VOIP (Internet telephone service) providers or play favorites among Web sites, products and services. Like cable TV systems, cable and DSL Internet-access providers could end up defining what's available to consumers - violating the principle of network neutrality, i.e., treating all transmissions equally.

The best argument for this ruling is that cable and phone companies will now be encouraged to invest more heavily in making broadband more widely available. That is badly needed: America's relatively low degree of broadband penetration lags behind such world leaders as South Korea; sharply increasing this rate is needed for a more globally competitive economy.

But Americans' high-speed Internet-access fees are already sky-high compared with many other places in the world, and it's hard to see how more-expensive broadband will hasten its spread.

The fight over open access to the Internet now moves to Congress, where the almost 10-year-old Telecommunications Act is apt to be rewritten to account for the rise of high-speed Internet services. If consumer groups fail to make the case for open access and network neutrality there, the development of wide-area wireless services, by entrepreneurs and local political jurisdictions, is Americans' best hope for ensuring the competition that would provide affordable, open and neutral Internet access - which should be the national goal.

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