In an opinion piece written for Forbes.com by Professor Warren Grimes of Southwestern Law School argues that there is a link between mergers in the telecommunications industry and net neutrality regulation. Specifically, Professor Grimes argues that:
“Large telecom providers usually favor mergers and oppose government regulation. Meanwhile, content providers and consumer groups typically hold opposite views: they oppose the mergers and favor the regulation. Sound policy requires more nuance. The public interest and the long term interests of industry participants are best served by limiting mergers and, as a direct result, minimizing the need for government regulation. Competition, not government regulation, is the best way to ensure that consumers receive what they want at a fair price. But this result is possible only if mergers do not create powerful firms that suppress competition and undermine consumer sovereignty.”
The premise that an alleged lack of competition for broadband access or content provision has a negative impact on net neutrality is faulty because net neutrality has nothing to do with either. Net neutrality is about content providers’desire to pay zero for sending traffic across a broadband provider’s last-mile network. Just look at Commercial Network Services’ complaint against Time Warner Cable that it should be allowed to interconnect with the broadband provider for free. To CNS, Time Warner Cable is “degrading its ability to exercise free expression.” And here we thought the “attack on democracy” argument was being used to advocate for consumer rights to internet traffic, not for corporations.
Do consumers really want a diverse amount of content? No, they don’t. Out of an average of 129 available cable channels, consumers watch an average of 17, according to an article in Arstechnica.com. And of the 961,554 active websites today, consumers visit less than ten a day for their news, entertainment, shopping, and other information. The British communications industry regulator, Ofcom, determined in 2012 that the average number of domains visited per month by an internet user was 82 in January 2012.
Mergers may be an appropriate way for less viewed sites to gain not only viewership but capital, especially if they have a niche brand that an acquiring firm wants to leverage for growth in market share. Writing off mergers on the false pretense that they stifle a competitive offering of content is the wrong approach. Instead, regulators should view mergers as strategic partnerships that help get little viewed content some more traction.
If net neutrality really has anything to do with treating all traffic equally then regulators should be interested in ensuring that content providers have an organizational structure that can best help a content provider get eyeballs to its traffic. Just saying traffic should be treated equally does not make traffic worthy of equal treatment by the market.