Net neutrality battle lines drawn

This is an editorial from the San Jose Mercury News:

President Barack Obama on Nov. 11 put the full weight of his administration behind the notion that all users of the Internet should be treated equally.

On Nov. 13 - surprise! - Republican leaders came out for precisely the opposite. They urged the Federal Communications Commission not to treat the net’s infrastructure providers as common carriers the same as power or water lines.

The tech industry is divided on this, but we come out on the side of equal access, known as net neutrality. Broadband companies would like to be able to charge higher prices to content providers for faster Internet access, setting out the prospect of a two-tiered Internet for large companies and start-ups. Companies like Netflix would be able to afford higher fees for high speed, passing them on to customers in their well established business. But higher fees would raise the barrier to entry for small companies and make it difficult to compete. This in turn would limit users’ access to information by discouraging providers or by having to deal with show speed access to sites they like or rely on.

Neither the president nor the majority in Congress has direct authority over what happens. But the president may have made his case harder to press by appointing cable industry lobbyist Tom Wheeler as chairman of the FCC - not a natural ally. Wheeler’s staff apparently has developed a plan for hybrid regulation, treating wholesale and retail traffic differently. We had hoped Obama’s signal from his bully pulpit would deep-six that idea, but Congressional Republicans may have rescued it, since it was intended to be a compromise.

Advocates of equal access argue that the government should regulate Internet service providers such as Verizon and Comcast and treat broadband as an essential public utility, classifying providers legally as common carriers. A U.S. appeals court ruling in January threw out a set of rules the FCC had tried to impose but said the common carrier classification would make the regulation legal.

Broadband providers are not a true monopoly, but they are a consolidating rather than expanding industry. The U.S. already is behind some other nations in having high-speed Internet at reasonable cost, and the likelihood of brand new providers popping up to offer price competition is just about nil. Meanwhile, Internet startups have fed much of the growth in our economy since the recession, particularly in San Jose and Silicon Valley.

Making it harder for them to hit profitability and inflating cost projections for new entries just seems wrong.