Bret Swanson in his WSJ editorial over the weekend "The Coming Exaflood" provides a real service to the net neutrality debate -- he forces the discussion to focus more on how we must deal with the coming explosion of demand for capacity on the Internet.
- In a phrase, Swanson is saying to the net neutrality crowd: "It's the capacity stupid!"
Net neutrality is a classic liberal big government idea that is all about trying to carve up the pie of today to be more fair, while assuming that somebody else will always make more pie for them to carve up.
The insanity of the net neutrality position is that its advocates assume future capacity will be there magically. That capacity will be there, only if there is a functioning marketplace that allows those private network operators that carry the traffic that comprises the Internet are able to earn a return on their investment in new Internet capacity. Otherwise, the Government will have to tax and spend to subsidize it. There is no free lunch.
The insanity of the online giants' position with ItsOurNet, is that they believe they should get a free ride and that the consumer should have to shoulder the entire cost of increasing the capacity of the Internet.
- Why the should companies which have 80-90% gross profit margins and which are the single biggest generators of existing and new Internet traffic, be given corporate welfare and not pay their fair share?
The bottomline: The Internet must have massive network investment to keep up with the exploding demand for capacity. Meanwhile, net neutrality would essentially turn the entire broadband industry into a price regulated utility where competitive differentiation and diversity of consumer choice are outlawed. Without competition or consumer choice there won't be new private investment in the Internet and it will slow down to everyone's detriment.
