The FCC and the bandwidth wars

[Commentary] As a general rule, whenever you hear special-interest groups using near-hysterical language to warn that some proposal will destroy jobs, snuff out innovation and end free-market capitalism as we know it, you can generally assume that progress is being made.

So it is with the controversies swirling around Internet regulation. The debate over Internet regulation has long since morphed from a reasoned policy discussion to something akin to religious warfare. Crusaders for net neutrality are determined to stop abuses that don't exist, while cable companies and phone companies are equally determined to preserve their God-given right to manage their networks in ways they now say they have no intention of doing, or offer services sometime in the future that they can't yet identify. Precisely because this is a fight more about principles than about the real world, Federal Communications Commission Chairman Julius Genachowski is likely to be foiled in his effort to broker a consensus. At this point, it's not even clear that the public interest can be found in a compromise among these warring special interests.

The better course is to take the bull by the horns, push forward with a reasonable and effective policy, defend it vigorously in Congress and the courts, and let the chips fall where they may. As it did with earlier generations of "common carriers," the government should set minimum service standards for speed, reliability and equal access, including a "neutrality" requirement that traffic be managed on a first-come, first-served basis. Beyond the minimum standards, companies should be free to offer different tiers of service at different prices while managing their networks as they see fit, as long as prices and practices are clearly disclosed. Beyond that basic Internet service, companies should be free to use any spare capacity in their lines and networks to offer additional private services, including priority lanes for themselves or other businesses to offer enhanced services such as movie downloads, health monitoring, home security and the like.

To ensure that companies don't concentrate their investment in more-lucrative private services while letting the public Internet stagnate and degrade, the government should set a reasonable cap on the percentage of any network dedicated to private services. If the FCC were to promulgate such rules, of course, it would immediately be criticized by members of Congress for going too far, or not far enough, or simply for exceeding its authority. To accommodate that political reality, Genachowski should make the new rules effective Jan. 1, 2012, giving his congressional critics enough time to update the telecommunications statute and legislate their own Internet rules. If they don't, they'll be hard pressed to criticize the FCC for showing leadership where they could not.