What the U.S. can learn from international net neutrality, broadband policies

As the Obama administration begins to enact tech policy, two of its biggest challenges will be deciding how to deploy national broadband services and whether to impose strict net neutrality rules on American carriers.

If the administration decides to look abroad for answers, it will see that see that countries such as Japan, South Korea and France have developed faster and less expensive broadband networks, but have also refrained thus far from implementing strict net neutrality rules.  

One reason for this, some analysts say, is that these countries have retained the bandwidth-sharing rules for carriers that the United States discarded in 2005. Under the old common carrier rules in the United States, incumbent telecom companies such as Verizon and AT&T were required to allow ISPs such as Earthlink to buy space on their DSL broadband networks at discount prices. The idea was to have incumbents wholesale access to their networks to other ISPs that would compete with each other to sell Internet services to consumers and businesses.

Click to see: Bar chart showing country comparison of speed and cost of broadband

However, the incumbent telecom carriers successfully lobbied the FCC to revoke these rules in 2005 by arguing that rival cable companies weren't required to let other ISPs use their networks and thus had an unfair competitive advantage over the telcos. Harold Feld, the senior vice president for the open media advocacy group Media Access Project, says that the FCC's decision to revoke common carrier requirements sparked fears that ISPs could start blocking their competitors' content and services in order to give priority to their own.

This led many consumer advocacy groups and Internet companies to promote strict enforcement of net neutrality rules, the principle that ISPs should not be allowed to block or degrade Internet traffic from their competitors in order to speed up their own. The major telcos, meanwhile, have uniformly opposed net neutrality by arguing that such government intervention would take away ISPs' incentives to upgrade their networks, thus stalling the widespread deployment of broadband Internet.
While Feld supports implementing net neutrality regulations on ISPs in the United States, he concedes that it isn't an ideal situation.

"Network neutrality has always been a second-best option," Feld says. "Before 2005 we didn't need it because we had a separation rule where carriers had to sell access to their underlying network. AT&T and Verizon were never allowed to touch Earthlink's DSL operation."

Net neutrality or regulated competition?

Not only have many other countries kept their common carrier rules intact for their traditional telecom providers, but they have extended these policies to cable providers, thus ensuring that cable companies don't have an unfair competitive advantage over DSL providers.

"We're probably the only major country that never had legislation to extend common carrier obligations across other lines," says Mike Weisman, an attorney who specializes in telecom law and who has been a policy advisor for advocacy group Reclaim the Media. "When we settled the question of whether to extend common carrier rules to cable companies, we settled it the wrong way."