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Reason Foundation

Supply and Demand Trumps Neutrality

Steven Titch
May 23, 2007, 3:00pm

Richard Martin at InformationWeek reviews some of the obvious reasons why network neutrality is a bad idea. But what I liked best was his observation that some of the same regulators (FCC Commissioners Adelman and Copps come to mind) who insist marketplace rules of the supply and demand for Internet bandwidth shouldn't apply are the same regulators relying on the law of supply and demand to net as much as $20 billion for the U.S. Treasury in the next radio spectrum auction.
The Electronic Frontier Foundation argues that the companies who build and provision networks shouldn't be able to charge what the market will bear. Umm, last time I checked we still lived in a capitalistic society. "From a philosophical standpoint, network neutrality is to be strongly valued, EFF chairman Brad Templeton has said. "It's what built the Internet and made it what it is." This is nonsense. What made the Internet what it is was corporate America discovering it could make money on it, and ordinary people a) realizing that the Web could improve their lives, and b) being willing to pay for it. The demise of net neutrality wouldn't change that; it would just require heavy users to pay more. That's the American way. In the real world, for now and for the next few years, bandwidth is if not scarce, at least not infinite. (This is especially true in the mobile world, where just watching a half-hour "Simpsons" episode sucks major RF capacity.) If the opposite were the case, how come the U.S. government expects to make between $15 billion and $20 billion in the upcoming 700MHz spectrum auction? I, for one, would rather the big carriers make their money charging premium prices to major-league bandwidth hogs instead of jacking up my monthly home DSL fee.


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