U.S. Commerce Secretary outlines Administration's network management policy principles

For those who missed or only caught a quote or two of Commerce Secretary Guitierrez' important speech at the NCTA this week, on the Administration's policy towards broadband network management -- I strongly urge you to read the pertinent excerpt of the speech below (as prepared for delivery), because it provides reasonable and important context for the network management issues pending at the FCC:

"...And that brings me to the issue of network management. As Internet use skyrockets, more bandwidth-intensive content becomes available, and methods of accessing the Internet multiply, managing this “information superhighway” has become a traffic nightmare. 

Think about this, according to one estimate, YouTube consumes more broadband capacity than the entire Internet did in 2000.

While that’s great for consumers—it’s also increasing the focus on network management—an issue gaining more attention from Congress, with increasing calls for legislation.

That’s why today, I would like to outline the core principals of this Administration’s network management policy.

The freedom of expression and the ability to innovate are fundamentals of our democracy, our economy and of our society. These same fundamentals have made the Internet an amazing success.

As we said in 2006, the Administration supports the FCC’s broadband policy statement, and the Administration believes the FCC currently has sufficient authority to address potential abuses in the marketplace.

We believe that preserving the ability of the Internet to support the free flow of information, support the advancement of democracy and spur innovation should be key Internet policy goals now—and for the future.

First, government should avoid overly prescriptive regulations that can’t keep pace with technological change.

The rapid pace of change makes it difficult to even define what constitutes “reasonable network management.

Network providers need flexibility to manage congestion quickly and effectively. A transparent, competitive market provides the best mechanism to ensure networks are managed reasonably, while meeting consumer demands.

Second, competitive pressures—not new regulation—provide the most effective discipline on broadband providers. Providers know that consumers who can’t get the service they need will go elsewhere.

Third, we believe providers should disclose management practices to consumers. An educated consumer is an empowered consumer.

Service and application providers are already working together to enhance disclosure of network management practices. We believe transparency promotes competition.

Finally, we must ensure that incentives remain in place to build new Internet capacity. Since 1996, your industry has invested more than $130 billion to upgrade your networks and to deploy broadband services to your customers.

To put this in perspective, the cost of building the interstate highway system in today’s dollars would be about $20 billion annually over 25 years.

But in 2007 alone, private companies invested more than $70 billion in communications infrastructure in North America.

While that investment is impressive—the continuing need for broadband growth will demand even more. Some estimate that broadband traffic will increase as much as 50 fold in the next seven years.

To keep pace, providers must develop new capacity and maintain the flexibility to manage their networks effectively and transparently.

Broad regulations that limit the ability of operators to price or manage their networks could actually deter and delay investment and innovation. The result would be fewer choices and higher prices for consumers.

In closing, these are tough questions we face—but imposing regulations, throwing up barriers and creating more hurdles for industry and consumers is not the right approach.

We believe that openness is central to our way of life, our economic strength, and our future. As we grapple with these questions broadly across our society, I believe it is critically important that we preserve the vibrant and competitive free market that exists for the Internet, unfettered by regulation. Thank you."

Extremely well said.