WSJ on Comcast's Network Management: “Markets Work” -- Internet regulation wouldn't

Kudos to the Wall Street Journal for a very wise editorial, “An alternative to net neutrality,” and for its clear conclusion and advice to the FCC: “that markets work.”

The Journal understands the facts and the real dynamic here -- that there is no longer much for the FCC to do now that market forces have solved the alleged problems raised against Comcast.

Simply, Comcast wisely, responsibly, and reasonably managed their network to favor quality-of-service for the vast majority of their customers, at the miniscule, intermittent expense of the biggest bandwidth hogs, who were hogging bandwidth on auto-pilot while not even attending their computers.

• Here’s a fun metaphysical question for the FCC: if a user is not attending their computer to recognize in real time when traffic bits are briefly delayed, was the user in fact delayed?
• Put another way, in instances of network traffic congestion, does the FCC place more priority on delivering quality-of-service to users/people actually at their computers personally using the Internet, or inanimate applications which run on auto-pilot for users who are not even personally online at the time of the traffic delay?
• I raise this point, because I fear some may have missed the relevant fact that Comcast was managing their traffic for the most legitimate reason – quality-of-service for most customers – and that it did its network management in the most-targeted, least-disruptive way it knew how -- by addressing only upstream traffic, only in congested neighborhoods/networks, and only with computers unattended by a person on auto-pilot-file-sharing.      

“Markets work.”

• The United States’ twelve-year-old policy for the Internet works too, because it is based on a strong bipartisan belief in free markets: “It is the policy of the United States, to preserve the vibrant and competitive free market that exists for the Internet… unfettered by Federal or State regulation.”
• The Internet “works” precisely because it is a free market and not a government-run utility like what “information commons” advocates like FreePress seek.
  
  • Trying to get the FCC to de facto regulate all broadband companies’ “reasonable network management” via the FreePress Comcast petition, is simply a deceptive and cynical attempt to get from the back door, what they repeatedly have been denied through the front door of our constitutional public policy process.  

At core, what were the Comcast network management complaints about? And haven’t market forces already addressed them? Yes they have.

• Petitioners claimed Comcast was not clearly disclosing its network management practices to its consumers. 
  
  • Comcast now has the most detailed network management practices disclosure in the broadband industry.
  • Markets work. Moot point. Nothing more for the FCC to do here.
• BitTorrent complained that they were not able to work with Comcast to address problems with their service.
  
  • Comcast has negotiated a mutually-agreeable market arrangement with BitTorrent, and Comcast is openly working with any other affected applications to better balance network management with the real world of an over-subscribed, finite-capacity Internet.
  • Markets work. Moot point.
  • The affected parties were able to address their problems quickly and effectively, without unintended consequences, and within a voluntary commercial negotiation process.
    
    • That free market process and outcome is vastly superior to the regulatory-driven process proposed by FreePress, which would result in delays in resolving problems, which would promote polarized extreme positions, which would force the FCC to choose from sub-optimal options, and where aggrieved parties would then seek legal redress in the courts – creating massive and unnecessary investment/business uncertainty for years.
  • Hopefully, the FCC appreciates that the quick, effective outcome produced by the marketplace in this instance, is vastly superior to any regulatory outcome the FCC could have devised or can devise.

 Bottom line: 

The reason that the FCC endorsed net neutrality policy principles and opposed pursuit of legally-binding regulation of the Internet in August 2005 was precisely to encourage market solutions like produced in this instance: Comcast’s adoption of new industry-leading disclosure of network management practices to consumers, and Comcast’s negotiating a win-win marketplace settlement with BitTorrent.

• The FCC should strongly endorse and encourage these types of market-negotiated win-win solutions and precedents so they continue to happen in the future, and strongly resist lose-lose legal action that removes incentives to reach market settlements and encourages polarizing legal strategies that serve no one.