Research Notes

10 reasons why journalists should not interest themselves with net neutrality rules being introduced in the EU and around the world to regulate the telecom industry

Many talk about net neutrality but few have spent the time needed to understand the complex topic. Not only are net neutrality rules being proposed around the world, but they are increasingly coupled with proposals for regulation of the internet and internet companies.

Strand Consult’s team of top academics has studied this issue in detail to produce a report “Understanding Net Neutrality and Stakeholders’ Arguments”, 340 pages that explore the issue in various countries around the world. To date, a number of media have covered the sensational aspects of the issue, but few have investigated the unintended consequences of the rules that could impact the entire internet ecosystem.

Most of the stories on net neutrality echo the same refrain, that rules are needed to keep telecom companies from abusing their customers. But less critical attention is brought to internet companies such as Google and Facebook, not to mention governments, which certainly have the capabilities to abuse their users.

It is easy to understand why revelations involving the NSA have stirred outrage about government surveillance and demands for such activities to stop. But strangely enough, net neutrality rules actually require, indeed legitimate, that governments monitor networks and users. This rulemaking lays the groundwork for governments to have increased involvement, if not control, of the internet.

Therefore it is not surprising that many politicians see net neutrality as the perfect issue to support: it creates an theoretical “enemy” (the telcos) while giving the government the de facto role as the “liberator”. The spillover benefit is that government gets the approval to monitor networks and users without even having to ask for it.

Strand Consult has observed that a number of so-called rogue states now pursue net neutrality with verve. Politicians can grandstand for a “free and open” internet while conveniently moving attention away from social problems, low standard of living, and embarrassing political misdeeds. They can piggyback on net neutrality rulemaking to enshrine increased regulation, control, and surveillance of the internet. Such an opportunity is just too good to pass up.

Strand Consult has an ongoing study of this net neutrality around the world and produces a variety of reports, research notes, and other materials. It has complied 10 reasons for journalists not to cover the issue:

1. Political and regulatory actors are reasonable and will not implement net neutrality rules without going into dialogue with the many stakeholders that will be impacted, including the telecom industry.

2. Telecom operators are well aware of net neutrality and can absorb the limitations and restrictions that net neutrality imposes on the products and services they offer customers.

3. The investor relations departments of telecom operators are fully informed about network neutrality and don’t believe that rules will impact their business negatively.

4. Telecom companies see their future as a a dumb pipe and don’t imagine selling intelligent services. They are happy with the standalone business of data transmission. Only actors such as Google, Facebook, and Netflix should sell enhanced and premium services to users. Furthermore it is ok for IT and software companies to build products based on network intelligence, but not the operators themselves.

5. Telecom CEOs know all about net neutrality, how it impacts their business, and can speak in a serious and intelligent manner about the issue to investors, the press, and politicians.

6. Telecom trade organizations have been successful to influence net neutrality regulation.

7. There is no value to write about alternative non-regulatory measures to net neutrality such as multi-stakeholder models. Such models have been used successfully for over 5 years in the Nordic countries, and no net neutrality violations are on record with the regulators in these countries.

8. Net neutrality rules won’t make it a disadvantage to build, own and operate telecommunications infrastructure on which society depends.

9. It’s not a problem that net neutrlaity can be made with little to no evidence, legal process, or academic agreement. That fringe political action groups can direct the political process, including writig the legislation, is not a concern The

10. media to date has made an accurate, objective and balanced appraisal of the net neutrality issue.

The EU’s Parliament’s recent and overwhelming adoption of strict net neutrality rules shows that many politicians have decided that the future of the telecom industry is to be a dumb pipe. The Council of Ministers still has to approve the rules, but there will be heavy lobbying in the meantime by net neutrality supporters who argue—without any evidence–that net neutrality supports consumers and innovation. The telecom package which was supposed to give the EU an economic reboot has deteriorated into feel good/sound good politics just in time for the election. There is no provision with net neutrality that will lower unemployment, increase broadband investment, or make the EU more competitive.

To be sure, Strand Consult supports rules against discrimination on the internet as long as they apply to all players. Creating a regime where only telcos have to adhere to the rules but where content/application providers such as Google, Facebook, and Apple get to deploy a number of non-neutral traffic management practices does not make for a level playing field. Creating an anti-discrimination framework in which just one party has to participate is discrimination in itself. It is digital apartheid.

The best thing for industry, consumers and innovation is to have the same rules for all players. This can be realized with an ex post competition regime. Indeed all the concerns about net neutrality can be addressed with existing competition and antitrust law. These statutes have been used successfully to prosecute abuse with internet companies when needed There is no reason why the same framework can’t work for telecom operators. Most important, by not making new rules that require network monitoring, the hands of government are kept off the internet.

The greater part of articles on net neutrality amount to editorializing by journalists. Critical questions are not asked, and many media take their cue from whatever Google, Facebook, or Netflix says. If this is what journalism is about, there is no more value to add on reporting about net neutrality.

Strand Consult’s valuable and global knowledge on this topic is gathered in “Understanding Net Neutrality and Stakeholders’ Arguments”. This report is in its 2nd edition updated with the status from countries around the world. To get more information on net neutrality, contact Strand Consult.

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