Think tank forum: Net neutrality equals property theft

Laws prohibiting broadband providers from blocking or slowing service to competing Web sites or online applications would amount to government-sanctioned property theft, speakers said Thursday at a conservative think-tank forum.

Speakers affiliated with Progress and Freedom Foundation (PFF), promoting its own bill to deregulate broadband providers, criticized Net neutrality bills, which would prohibit broadband providers such as AT&T Inc. and Comcast Corp. from blocking or slowing services to competing services such as VOIP (voice over Internet Protocol).

"There's nothing neutral about Net neutrality," said Jeffrey Eisenach, chairman of the consulting firm CapAnalysis Group LLC and co-founder of PFF. "Net neutrality is, in fact, the theft of property rights from [broadband] infrastructure providers. It's simple regulatory theft -- the transfer of ownership from one group of people to another group of people."

A Net neutrality law isn't needed because large broadband providers haven't discriminated against competing Web content, added Kyle McSlarrow, president and chief executive officer of the National Cable and Telecommunications Association (NCTA), a trade group for cable television and broadband providers.

Many U.S. residents will soon have more broadband options, including Wi-Fi networks and broadband over power lines, allowing them to switch services, he said. "They're about to have a lot more choices around the corner," McSlarrow said.

Proponents of a Net neutrality law, including Internet companies such as Google Inc. and Yahoo Inc., say broadband providers will be tempted to discriminate against competing products without some regulation. BellSouth Corp. has proposed charging Internet companies extra to deliver faster customer access to their Web sites or applications, saying it needs to find new ways to pay for improvements to its broadband networks. Net neutrality proponents say such a business plan would create an Internet with toll booths.

Also, broadband providers today have few competitors -- about half of all U.S. residents have the choice of two broadband providers, and the rest have one or none, said Gigi Sohn, president and cofounder of Public Knowledge, a consumer advocacy group.

"If we're in a situation in the future where we're talking about four or five [competitors], maybe we don't need to talk about Net neutrality," she said. "We are so far from having competition."

PFF is pushing a bill, called the Digital Age Communications Act or DACA, that would deregulate telecom providers and take away most U.S. Federal Communications Commission (FCC) authority to create forward-looking rules for the telecom industry. The bill, largely written by PFF in 2005, would limit the FCC on Net neutrality issues to investigating consumer complaints about unfair competitive practices.

Senator Jim DeMint, a Republican from South Carolina, introduced DACA in December. On the other side, Senator Ron Wyden, an Oregon Democrat, on March 2 introduced a bill requiring Net neutrality and Democrats in the House of Representatives are pushing for Net neutrality provisions to be included in a House telecom reform bill.

Sohn, the lone advocate of Net neutrality on the PFF forum panel, called DACA's language allowing the FCC to investigation unfair competition "vague." She called on Congress to create some limited rules so broadband providers and customers know what to expect.

"They're just two different visions of the Internet," Sohn said. "I see the Internet as something that gives people the power, for the first time ever, to have a megaphone. These guys want to make a closed system."