"Nothing Bad Happens If Net Neutrality Fails"

There's a missing element in discussions about network neutrality, says Dan Frommer, Deputy Editor of Business Insider. "No one has convincingly and realistically explained what would happen that's so bad if ISPs were not forced to observe net neutrality, and if they were allowed to sell faster access to the highest bidders," Frommer says.

"The reality is that nothing really bad would happen," he maintains. Some think the internet access providers cannot be trusted. To be fair, everybody agrees with that, up to a point. The reason Adam Smith said we can rely on markets is that greedy, avaricious behavior by any actor is met in the market by offers from competitors who will offer a better deal. "Greed" is met by competition, and competition restrains greed.

Any ISP that behaves badly will quickly be met by a rival response from competitors eager to take that ISP's business and customers.

"If anything, things could get even more expensive for consumers if net neutrality is enforced," Frommer maintains. Why?

ISPs operate in competitive markets. They aren't perfectly competitive, only workably so, given the high barriers to entry.  If ISPs lose revenue opportunities because of net neutrality, they certainly will look elsewhere for new revenues, and raising effective prices is an obvious path to take.

There is an argument that if quality-assured tiers of service are allowed (something the Google-Verizon deal precludes), better-capitalized firms will be able to pay, and start-ups will not. That's mostly true.

But bandwidth costs are not the major cost item for new software upstarts. To the extent that "more bandwidth" fixes some latency issues, even real-time services can continue to use the best-effort Internet as bandwidths continue to climb.

The vast majority of Internet businesses won't pay for priority bandwidth, if it's ever available. And the ones who do will figure it into their costs of doing business, the same way they do with rent, staff and health insurance, for example.

Some will not agree. Market power is an issue in business. But competition is the natural restraint. Innovation will occur in the presence of, or despite, network neutrality rules. And the Google-Verizon agreement ensures that all application providers have exactly the same prospects in the Internet access part of the ecosystem.

If other ISPs adopt the same framework, fixed network access will remain a "best effort" service offering no advantages to any single application provider.

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