The argument that access to the internet via broadband networks should be regulated like a public utility sends society the wrong message about how information moves along the internet and that it is okay to devalue information, data, content along certain interconnection points when indeed the opposite should be happening; that for the value added at these interconnection points, added value should be reflected in the price mechanism. Access should not be priced at near zero on false premises of openness and privacy.
On the contrary, if the data consumer wants to keep the prying eyes of access providers or other data providers away from her activities, there should be an exchange of compensation that guarantees such activity won’t take place. Rather than regulate the internet as a “public utility”, let the parties in data transactions enter into contracts that spell out each party’s rights.
Unlike an electric utility where the product, electricity, flows for the most part one way (we’ll ignore distributed energy for now), data, content, information flows two ways. Electricity flows from an energy producer to an entity that coordinates the transmission of electricity flows to the distribution utilities that have been searching for the best price from the generators. Data, content, information flows at least two ways; from content creator/generator/aggregator to an end-user in response to the locational or other personal data the end-user provides to either her internet service provider or content provider.
The data end-user or consumer pays her broadband provider for access to the internet and may also an online entity for access to their content which may be located behind a paywall. In most cases the information the end-user seeks is offered by content providers free of charge. But if a public utility model is followed for participants in the data markets then consumers have been underpaying for their search activities and their bills should be adjusted upward to capture the major costs a utility incurs when delivering service.
A consumer’s utility rate includes the cost of generating electricity; transmitting electricity; and distributing electricity to its final stop. The utility consumer may also pay environmental compliance costs, nuclear construction costs recovery, a municipal franchise fee, and sales tax.
Broadband fees are another matter. What sticks out when you look at your broadband bill is that none of your fees and charges are related to the generation, transmission, or distribution of data, content, information. For broadband access you may pay state and local taxes and that’s it.
So while a utility’s rate reflects activities impacting the movement of product that end-users want to purchase, electricity, broadband rates, while reflecting the cost of access, include nothing else, not even the cost of generating and transmitting data, content, information. If progressive advocates for public utility-style regulation of internet access want their argument to have validity they will have to accept that along with the additional regulatory burdens they propose via Title II, customers should expect bills that capture all the costs involved in generating and sending their data, content, information to them. Broadband providers should pay every content provider that the broadband subscriber chooses as a source of data, content, information, and broadband providers should turn around and pass on these costs to the consumer so that her bills reflect these choices.
The benefits from such an approach is that it would give the markets a much more accurate view of which content providers are providing end-users with the most value. The net neutrality debate would end because consumers would choose content they value the most as a result of rates that reflect the cost of getting a near infinitesimal amount of data to the end-user.
That is, off course, if the FCC is really serious about regulating the internet like a utility.