Will the Dream of Net Neutrality Stand?

"And on the pedestal, these words appear:
My name is Ozymandias, King of Kings,
Look on my Works, ye Mighty, and despair!
Nothing beside remains."
-- From "Ozymandias" by Percy Bysshe Shelley, 1818

Thus spake Shelley to point out the impermanence of all things. Will the dream of an open Internet meet that same fate?

In 2008, the FCC was hard at work codifying open network access as an enforceable requirement. The dream was alive and well, and supported by information-dependent businesses like Google (Nasdaq: GOOG  ) and Amazon.com (Nasdaq: AMZN  ) .

However, at stake was how far the FCC would be able to go in order to enforce network providers like Verizon (NYSE: VZ  ) and AT&T (NYSE: T  ) when it came down to managing their Internet traffic. Service providers such as Comcast (Nasdaq: CMCSA  ) never felt comfortable with government agencies telling them how to run their network. Feelings aside, the FCC slapped a large fine on Comcast over the throttling of network traffic belonging to file-sharing applications, and was met by a Comcastic lawsuit in return.

The cable giant contended that the FCC had no right to impose a fine, and the best it could do was to give Internet service providers recommendations on how to handle excessive traffic loads. This week, a three-judge federal court agreed and slapped down the FCC fine.

"Comcast remains committed to the FCC's existing open Internet principles," says a company spokeswoman, "and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant Internet."

On the surface, that sounds a lot like Google's crusade for a faster network infrastructure. But really fixing issues of network congestion will require Comcast to throw a lot of money at switches from Juniper Networks (Nasdaq: JNPR  ) and fiber-optic cable from Corning (NYSE: GLW  ) , among other hardware providers. It's cheaper and easier to put restraints on customers and e-businesses instead -- and watch the rest of the world run circles around the American network infrastructure.

I hope that Comcast truly lives by its words and sees quality networks as a competitive advantage, rather than a problem. But without some legal muscle as motivation, I'm afraid that the digital future will be slow in coming to your neck of the woods. That's bad for Google and Amazon -- and for you and me.

Will two letters a day to your congressional representative do the trick? Discuss how to keep the U.S. Internet competitive in the comments below.

Fool contributor Anders Bylund owns shares in Netflix and Google, but he holds no other position in any of the companies discussed here. He loves to bring some poetry to Wall Street every April, because it's National Poetry Month. Google is a Motley Fool Rule Breakers pick. Amazon.com is a Motley Fool Stock Advisor choice. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 07, 2010, at 11:15 PM, captainfactoid wrote:

    Anders has this pegged right on the money. Nothing less than the freedom we Americans (e.g. me) say that we love above all else is at stake. We are in danger of losing our credibility in the defense of freedom.

    If we allow entities such as Comcast to set their own rules about what they will allow, how can we then turn to China and say that they shouldn't censor the web?

  • Report this Comment On April 08, 2010, at 8:46 AM, Stocklovr wrote:

    "It's cheaper and easier to put restraints on customers and e-businesses instead -- and watch the rest of the world continue to rapidly outpace the American network infrastructure."

    Please. Give me a break. I'm no Comcast lover but it seems to me that they did this to deal with abusers. If you are using so much bandwidth that you are affecting my connectivity then where are my rights? We should all have the right to the same throughput speeds even if my name isn't Google.

    How does slapping the companies with FCC fines or telling them that they need to spend to build out their networks to make them faster to accomodate folks who what to do whatever they want, help the situation?

    Do that and you truly will "watch the rest of the world continue to rapidly outpace the American network infrastructure" because you remove companies' incentives to build out their networks.

    -Slvr

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