The Net Neutrality Debate is Only Half
Having spent time both in the U.S. and in Europe, I believe the U.S. focused net neutrality debate tends to miss an important point. Net neutrality and open-based access models are interlinked. In the U.S., the debate centers around how to ensure equal and transparent treatment of services by the access providers. In Europe, the regulatory discussion is focused more on how the access player’s competition can be ensured in the long run.
Today EU is endorsing an open-based access model in an attempt to get more “fair” access to the local loop and Central Office spaces typically owned by the incumbent local exchange carrier (ILEC). The idea is to avoid the problem experienced in the copper-based world with a monopoly organization owning a key public infrastructure resource, and thereby defining the rules for competition with implications both on network services, prices and pace of service innovations. Without sound regulations, alternate multiplay service providers, CLECs, utilities companies, and municipalities would have been effectively locked out to offer broadband services on competitive grounds.
The U.S. is a country where free trade and strong competition are well recognized. The way the regulatory discussion in the U.S. is moving forward, it is limited to content and service transparency and equal treatment. The goal is to limit service providers’ freedom to filter and downgrade user experiences on applications like Peer-to-Peer download. This is an important dimension but I think ultimately customers will leave if the services beeing offered have too poor quality. That is, if there are competitive players around for the consumers to select from. In competitive markets, access service providers who have tried to downgrade user experiences on specific network services have faced strong churn and the brands have taken serious hits in the media as well.
To be effective, broadband stimulus should couple net neutrality with defined rules for open-based access. There are many real world cases where this model has successfully stimulated sound competition. If done right, competition will be healthy both on services being offered and for the access to the local loop and Central Office space footprint. This drives down price and increases the pace of innovation, pushing vendors and service providers alike to bring better technologies and services to market, all to the benefit of the consumer.
While the debates and the strengths of the different players vary between the U.S. and the European Union, both continents face similar challenges, and can learn from each other. Now is a good time to push for open-based access models and net neutrality. Broadband stimulus may add the necessary extra incentive to increase competition and avoid the new fiber access infrastructures currently being deployed from being locked into monopolies.
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