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Jonathan Spalter

Jonathan Spalter

Posted: September 21, 2009 04:53 PM

Wireless 'Net Neutrality' and the Law of Unintended Consequences

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FCC Chairman Julius Genachowski made news today announcing his intent to open a regulatory inquiry into the merits of imposing so-called 'net neutrality' rules on the wireless sector. The move adds another high-stakes conversation on top of a broad inquiry into the future of wireless and the methodical, inclusive march toward a national broadband plan.

At first glance, the announcement appears to be a populist slam-dunk. The term 'net neutrality' has no agreed-upon definition in policy circles. But in popular culture, it has become synonymous with free speech. And, whether you watch Fox News or read Huffington Post, that's one issue virtually all Americans can agree on.

Momentum is clearly building for greater regulation of wireless and broadband. But as we wade deeper into these issues and contemplate changing the environment that has led to such rapid and profound innovation today, it is worth thinking through the possible implications to consumers, innovators and our economy.

As we do so, here are three areas that should be foremost in policymakers' minds:

Consumer experience. The notion that all applications and websites are created equal has an appealing, egalitarian ring to it. It's proven a reasonably workable concept for wired broadband networks. But it poses the risk of potentially calamitous disruption to the wireless consumer experience.

Wireless and wired broadband networks are very different both technically and operationally. In fact, a primary reason mobile has exploded over the past decade is precisely because these networks are prudently managed. When's the last time, for example, your mobile device was overcome by viruses? Yes, many want mobile devices with endlessly customizable options - and the marketplace certainly delivers a wide array of choices - but most consumers also take the technology for granted and want to connect to people and information without a second thought.

In a world where streaming video is becoming more common, an 'all bits are created equal' decree could run a fairly extreme risk of degrading the wireless experience of many to accommodate the mobile content habits of a few. Available spectrum is finite. Capacity must continually be managed in a dynamic way. Do we really want the FCC to be not only the regulators of wireless networks, but also its engineers and network managers?

The Commission likely will carve out a few obvious exceptions. One would hope, for example, that we can agree that real-time health monitoring should take precedence over a neighbor's kid downloading the latest Hannah Montana movie. But the most exciting innovations often come from unexpected - and thus unanticipated - places. Who knew that the number of mobile applications downloaded on just one brand - iPhone - would exceed one billion in its very first year? Regulations can confine mobile's vast potential in ways we cannot easily predict today and will likely underestimate to our detriment.

Investment. We all know what happens when too many cars pile onto the freeway. One obvious solution is to build more lanes. This takes billions of dollars in investment. The most compelling argument I've heard on this front, came from a small Internet provider in Wyoming. 'I'm all for free speech,' he said, 'but I'm not for free beer.' His point: Given that we all are free to express ourselves on-line and off, any new regulations must carefully balance the broad public interest in keeping robust investment flowing into these networks. Free beer and free speech are both wildly populist notions. But only one makes for constructive, sustainable policy.

Of course, the stakes go well beyond the ISPs to consumers and the broader mobile innovation community. Both depend on robust, well-managed networks to deliver a quality experience that fuels demand for not only more bandwidth, but exciting new uses for it.

Innovation. One negative outcome would be regulations that are far from neutral. Let's be honest: vested interests exist on both sides of the net neutrality fence. The FCC needs to find a balanced path forward - one that ends the divisive debate about whether the government should allow innovation at the edge or in the networks. Clearly, we need both to keep pace with consumers and make the most of mobile innovation.

We are in a technology environment where the demands placed on wireless networks are increasing exponentially. This is a good thing for mobile innovation because it means we are delivering new and diverse consumer benefits on a much broader scale. To keep the innovation flowing, we need policies that clearly comprehend that network management is central to this ongoing progress.

Agree or disagree on this one divisive policy issue, I believe that all wireless stakeholders share a genuine commitment to encouraging innovation, investment, as well as diversity of content, services and applications. As we take a closer look at how we achieve these goals, we should resist a rush to judgment. Through 20-plus years of Democratic and Republican Administrations, entrepreneurs, innovators and consumers have driven mobile innovation and growth.

Increased and imprudent government intervention could cut short an extraordinary run that has delivered real consumer, social and economic benefits, and has the promise of doing even more in the days and months ahead. The risk of unintended consequences could derail so many positive advances and opportunities underway. Are we taking a constructive step forward or walking the plank on mobile innovation? Only time - and the quality, balanced nature of the coming deliberations - will tell.

Jonathan Spalter, chairman of Mobile Future, has been founding CEO of leading technology, media, and research companies, including Public Insight, Snocap, and Atmedica Worldwide. He served as an advisor to and spokesperson for Vice President Al Gore during the Clinton administration. www.mobilefuture.org

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