Net Neutrality Debate a Reminder that Content Was Never King

Media consumers are usually too busy paying attention to content to consider the channels through which it arrives. Yet the nature of those channels and the rules governing them have historically had a huge, unacknowledged role in creating and shaping what we read, watch and listen to.

The motion picture business was founded by people who owned tiny movie houses; the future moguls knew nothing about making films, but they owned the exhibition outlets, and needed content to sell tickets for. So they learned, and they shot, and they founded the studios. Channel preceded content, and gave birth to Hollywood.

Channel control has long prefigured media development. In the electronic age, wherever the creative artists went, the engineers had gotten there first.

Broadcasting started out as the late 1920s brainchild of people who made and sold radio sets. They wanted to give customers a reason to buy their receivers, so they then began making programs and transmitting them over the air. First came the distribution channels, content followed.

FM radio languished for 30 years until the 1960s, when regulators told station owners they could no longer fill the high-quality FM band with the same programs they were putting out on scratchy AM. Suddenly huge bandwidth opened up, perfect for audio engineered for clarity — and the revolution in alternative rock was born.

And the feds’ 1962 insistence that all TV sets be equipped to receive signals broadcast in the UHF range – another 60-some channels on top of the four or five that most consumers received — broke the network stranglehold on TV broadcasting and started the industry down the road to the multi-channel cable explosion.

That brief history lesson goes some way toward explaining why today’s controversy over so-called net neutrality matters.

Net neutrality is the policy that has barred the companies that furnish Internet connections from playing favorites. It means Internet

service providers (ISPs) cannot, for instance, offer one website faster and cleaner downloads to its customers just because it’s owned by an ISP or because it pays ISPs a premium.

Consider your telephone: It connects you to everybody just as quickly and clearly as anybody else, regardless of who it is, what they’re saying, and whether they’re in partnership—or in competition—with the people who own your local phone company.

Net neutrality really means channel neutrality, and has been hotly disputed for several years now. The telecom companies that dominate the ISP industry—behemoths like Comcast and Verizon—are insisting that their ability to stay profitable and technologically advanced requires that they customize their prices to the quality of their services.

That means ISPs could create toll-based fast lanes, and charge content providers accordingly. Top-shelf content companies like Google, Facebook, YouTube and Netflix would be charged at higher rates, presumably, which would leave few ordinary consumers in tears.

But it could also mean that watching online videos would become risky, with the quality depending on whether the companies that posted them are paying top dollar. As Delara Derakhshani of Consumers Union said: “It could create a tiered Internet where consumers either pay more for content and speed, or get left behind with fewer choices.”

Worse, for online entrepreneurs the ability to reach customers—and online audiences are notoriously impatient with delays and interconnect glitches—could be a huge drag on startups. As Cory Doctorow wrote memorably in the Guardian:

“If you think of a business idea that’s better than any that have come before – if you’re ready to do to Google what Google did to Altavista; if you’re ready to do to the iPod what the iPod did to the Walkman; if you’re ready to do to Netflix what Netflix did to cable TV – you have to start out with a bribery war chest that beats out the firms that clawed their way to the top back when there was a fairer playing-field.”

Net neutrality has been in play for several years, and in February, after the courts had tossed its latest effort, the Federal Communications Commission (FCC) said it would try for a third time to write rules. Its formal proposal is expected in mid-May.

Based on advance disclosures, the FCC will continue to exempt mobile applications (the most dynamic sector of the digital world) and will, to the dismay of open Internet supporters, support discriminatory pricing as long as it’s “commercially reasonable,”  something regulators would determine on a case-by-case basis.

How might the way Internet channels are ruled affect online content? Without question, it would consolidate privilege and rank, and benefit the have’s over the wanna-be’s. And it would authorize a long-term skim of Internet dollars to benefit the most leadenly industrial sector of the business—the utilities that rent out the pipes.

This comes at a time when the most brazen telecommunications merger proposal in decades is pending—the $45 billion marriage of Time Warner Cable and Comcast, which is already the country’s biggest provider of broadband links. The result would be a giant with control of 19 of 20 top markets, and 40 percent of Internet service nationwide.

A retreat from net neutrality would ramp up the pricing and service discretion this new colossus would exercise, as potential supplicants like Netflix—mindful that Comcast already owns NBC Universal—are pointing out in dismay.

And what about online content creators? It would be ironic if, at a time when they despair of ever devising durable ways to get paid by the consumers they serve, the most dramatic revenue innovation in the business would shunt money not to the content side, but to the delivery services they have no choice but to depend on.