Competition Double Standard

The recent vote for net neutrality in the House Judiciary Committee was driven more by jurisdictional jealousy and turf protection than policy substance. In a frantic rush to catch up with the Commerce Committee bill, Judiciary did not conduct a substantive review of the facts or the policy repercussions of potentially reversing Congress decade-long pro-competition telecommunications policy. Net neutrality proponents played on the Committee's nostalgia of the glory days when Judiciary was in the telecom policy drivers seat in overseeing Judge Greene and the breakup of the former AT&T. When the only tool you have under your jurisdiction is a hammer -- all you see is nails. A recent letter I wrote to the Senate Commerce Committee on net neutrality is very relevant to the Judiciary vote. It highlights how one-sided and myopic the debate has become in examining the true economic interests driving net neutrality. Many think the broadband carriers are the only one with a dog in this fight. Not so. Microsoft, Google, Yahoo, eBay, Amazon and other ecommerce interests are bankrolling a gargantuan lobbying and PR effort to try and get net neutrality legislation passed. My letter exposes some of the real economic and anti-competition interests driving net neutrality. First, if one looks at this issue objectively, it is clear that the net neutrality stance of the ecommerce giants is not principled at all; it is classic self-serving legislation that would impose a convenient double standard. It would leave ecommerce giants free to converge, integrate and compete into communications, but would conveniently ban competitive entry by broadband players into ecommerce. How is that neutral? That is rigging the game to protect multi-billion markets from new competition that could greatly benefit consumers with savings, convenience and productivity.

• Would Microsoft, Google, Yahoo, eBay and Amazon be willing to apply the "principle" of net neutrality to themselves? Not a chance, because it would crush some of their most promising growth opportunities going forward.

Second, strip away the populist rhetoric and net neutrality looks like classic corporate welfare for Microsoft, Google, Yahoo, and eBay, who by the way, already enjoy market-leading 80-90% gross profit margins. These e-commerce giants, who use and benefit from the Internet more than anyone, want the government to legislate that they pay the least for it.