Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

We need competition not net neutrality otherwise Web 2.0 dies on the vine

Posted by Tom Foremski - June 22, 2006

463_logo.gifWednesday I managed to catch up with Sean Garrett, one of the co-founders of 463 Communications, an agency that represents tech firms in Washington D.C on tech policy issues. Obviously, net neutrality was a topic we discussed, and Mr Garrett mentioned that the telcos were out spending everyone by enormous amounts on the net neutrality issue.

But this issue is a red herring because there is no way that legislation can force a pipe owner to carry all packets, including its own, on an equal basis. As Mr Garrett pointed out, the real issue is competition, "If we had real competition then the whole net neutrality debate would go away."

That is very true, it's because our access as consumers to the Internet is controlled by the telephone or cable TV companies and we don't have any choice. Efforts by municipalities to provide WiFi for local residents have often been blocked by the telcos yet this is clearly blocking competition.

If we had a broad range of competitors we could choose, and choice is good for consumers, it's also good for the vendors of the infrastructure, Intel, Cisco Systems, Hewlett-Packard, Sun Microsystems etc.

Choice would be great news for the many hundreds/thousands of startups, the so called Web 2.0 companies that are based on the premise of equal access and equal performance on the Internet. Without this capability they will die on the vine--it will wipe out the promise of this next wave of innovation.

The net neutrality debate is bogus because there is no way to mandate/regulate that the communications network owners provide equal access and performance. Because the telcos and cable TV companies want to pump torrents of bits through their pipes in the form of their own services but more importantly, in the form of high definition (HD) TV/video.

HD will squeeze everyone else to the margins and marginalize the entire Web 2.0 generation. That means thousands of small startups, plus the many thousands of VCs and other investors in those companies, will be drastically affected by this net neutrality issue. But Mr Garrett says it is difficult to get the startups interested in political issues that affect their future, that has to change.

So how do we break the local duopoly? And it is a federally regulated duopoly which means the government is part of the barrier to competition.

WiMAX, the Wi-Fi technology on steroids that has a range that can be measured in tens of miles could vault over the walled gardens of local Internet providers. But that technology is not yet ready for commercial use and it might be couple/several more years before it is ready.

In the meantime, HD will kill the Web 2.0 generation by pushing them out of the pipes, IMHO.

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Please also see:

Tom Abate at The San Francisco Chronicle just finished the first in a series on net neutrality, over 200 hours of investigative work: Speed Bumps on the Information Highway

The 463 Blog: Inside Tech Policy which is also a good resource pointing to other good sources on tech policy issues.

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