The ghosts of network neutrality?

How’s your Latin? “First, do no harm.” That’s the powerful adage new medical students learn as a precaution against jumping into curing illness before understanding the potential negative consequences of what they do. 

Talking with Akamai CEO Paul Sagan a few months ago for our upcoming book (more on that in a week or so), I asked him how he felt about the government’s involvement in the development of the network. “We need to find ways to encourage the fastest possible growth of broadband, particularly in the U.S. To do that we need to think about what the government can do, and to be very wary of what it shouldn’t to do retard growth.”

Well put. The regulatory mood in the U.S. has shifted following the financial crisis; we want government to do more to protect our society from excessive financial risk. With the appointment of a new chairman of the FCC and new rulemakings about the hot potato topic network neutrality on the horizon, it’s worth asking, is the U.S. government first doing no harm? 

Yankee Group regulatory expert Dianne Northfield is encouraged. “Genachowski is doing an effective job in changing the complexion of the Commission and there is a true sense of constructive dialog among the Commissioners. It’s refreshing.”

How does she regard the FCC’s latest efforts on net neutrality?  As much as network operators might hope the topic would just vaporize entirely, she says the most recent rulemaking the FCC has proposed is reasoned. It doesn’t suggest a blanket solution, and it recognizes that all 6 of the proposals it makes about neutrality should be subject to reasonable network management. The Commission also recognizes that its rules may apply differently to different types of networks, asking for comments on how and when its rules might apply to wired versus wireless networks, for instance. It’s also looking to understand appropriate exceptions from the rules. Finally, it has prudently set an unusually long time frame for comments, signalling that it does not intend to act without a thorough and detailed deliberation process. (For more, Yankee Group clients can see Dianne’s most recent report on network neutrality worldwide here.)

I believe the specter of unreasonable regulation has curtailed network investment in the U.S. as well as more efficient use of existing network capacity; operators have been frightened of courting more litigation or legislation from the application of very useful tools for managing their networks and creating differentiated pricing based on customer needs.

A thoughtful process to replace uncertainty about network neutrality with fair clarity will help the Anywhere Network grow.