New Net Neutrality legislation: Another unnecessary attempt to regulate the internet

Sen. Ron Wyden (D-OR) has introduced one more unnecessary, vaguely written piece of Net Neutrality legislation.

The bill prohibits internet service providers from allowing selected websites to circumvent their data caps. The only available recent example of an ISP actually showing data favoritism is Comcast letting its Xbox video streaming app circumvent its data cap. But Comcast isn’t currently enforcing its data cap at all. So this, once again, is an example of internet-regulating legislation that is A. bound to have unintended consequences, as all legislation does, and B. aimed at fixing a problem that doesn’t actually currently exist. Sounds like a lose-lose.

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The bill also mandates that ISP data caps “reasonably limit network congestion without unnecessarily restricting Internet use.” Words like reasonably and necessarily are rife for cronyism and legislative abuse. The legislation also allows the FCC to dictate how internet service providers price their tiered data plans. As Ryan Radia so eloquently put it in this Ars Technica interview, this kind of legislation amounts to “a price control based on discredited economic thinking.”

The legislation comes soon after a New America Foundation white paper revealed that ISPs use data caps to make money.

From Ars Technica:

The reason for this counterintuitive business model is that in the noncompetitive US marketplace, it is highly profitable.

Noncompetitive US marketplace. Exactly. The more we allow ISPs to compete via regulation (aka cronyism), the less they compete in the marketplace, meaning a crappier product for a higher price.

Data favoritism isn’t an actual problem that’s costing anyone any money. The problem is that ISPs charge way too much money for way too little service. The costs in transferring data have come way down, yet the prices for consumers haven’t.

The answer, of course, is a more competitive marketplace, which is the only thing that will motivate ISPs to figure out ways to make money by providing more data for fewer dollars.

Further reading:

Senator introduces bill to regulate data caps
Net Neutrality, Data-Cap Legislation Lands in Senate

Image via shyb

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