Can the Wireless Internet Be Neutral?

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However the FCC chooses to define Net neutrality, Chiang says the specter of regulation hangs heavy over wireless Internet businesses. "As with other industries, uncertainty is worse than anything," he says. "Deploying towers, digging up roads, and standardizing new equipment is a very long-term, capital-intensive thing. If people don't know what is going to happen until litigation sets precedents, that will be a big deterrent to capital expenditures, and that generally is a concern."

The idea of Net neutrality itself is not new. In 2005 the FCC issued principles--but not formal regulations--saying consumers have a right to access legal Internet content and services of their choice. But the matter came to a head last year when Comcast started slowing some customers' peer-to-peer traffic--that is, the bandwidth-slurping exchange of music and video directly between computer-users' hard-drives. The FCC ruled that Comcast had to stop the practice. Comcast sued, challenging the FCC's authority to act in the absence of formal regulations.

In response to the Genachowski speech, the wireless industry was quick to assert there is no problem to solve. AT&T suggested that the highly competitive wireless market--five carriers with more than 10 million customers and 10 carriers with four million or more--provides state-of-the-art service. "Today, American consumers enjoy the broadest array of innovative services and devices, the highest usage levels, the lowest prices, and the most competitive choices of any wireless market in the world," a company statement said, adding that "we have never had concerns with disclosure or transparency regarding network management decisions so long as such requirements are reasonable."

Such industry proclamations don't mean that private interests can't crowd out public ones, says John Palfrey, a Harvard Law School professor and co-director of the Berkman Center for Internet & Society. The risk, he adds, is that big media companies will seek to "solve the copyright debate through bandwidth shaping or other technical means," or that ISPs will curtail certain kinds of speech, as is widely done in some other countries. "Without Net neutrality," says Palfrey, "the most important public network in most people's lives could become dominated by private interests. The parade of horribles that could occur is endless."

Even Net neutrality advocates like Palfrey, however, concede that technology advances faster than government. "The trick will be to say 'Can you draw those rules in such a way that will promote innovation over the medium to long term, not just the immediate term?'" he says. "Any regulation will need to be revised in five or ten years."

Jon Crowcroft, a professor of Communications Systems at the University of Cambridge in the United Kingdom, fears that regulatory meddling will inevitably add costs. "I personally am disappointed that a regulatory agency wants to get in the loop. Generally regulations are needed when we have a market failure," he says. "While today there are lots of anomalies, they are generally localized in geography and time, and generally drift toward a generally neutral network."

He adds: "If someone has to put in extra technology to support existing customer base, it will increase the cost of your components, probably a lot. That would be a very negative effect."