More Regulations?

Congratulations USA, you can now change your name to China. I'm referring to government regulation restricting private broadband companies from pricing their products. When I first read the article in the WSJ about a government effort to regulate the Internet I was shocked - how could this happen in the US? But after reading the article I was still shocked, but for a very different reason.



My first impression was that the regulation would concern content but that misconception was quickly stymied. As I read on I learned that what in fact the government is proposing is "net neutrality," which is purposefully vague and P.C.-sounding and is sure to confuse and convince many who refuse to read between the lines. The issue being debated is the current pricing schedule used by most broadband companies.



Broadband customers have a choice; for those that use the Internet for surfing the web and emailing they can opt to purchase the low-speed option for which they pay less. For those that like to download mega files and stream video constantly, they have the choice to pay more and get more speed. So far so good.

The issue here is that both customers are using the same cable with the same potential speed but for broadband companies to target multiple markets, they must offer diversified products. But to do this, broadband companies need to make their one product, a high-speed cable, into multiple products by purposefully slowing the Internet to those customers that opt for the basic package.

This is where the government comes in. They spout "net neutrality" and how everyone should have equal access (read: speed) to Internet. Therefore, my grandma who pays 19.99 for basic high-speed cable should have the same access that large corporations receive who pay thousands of dollars in order for their firm to have access to the fastest Internet possible.

It is basic economics that people like choice, people like diversified products, and that they are willing to pay more to get exactly what they want. By regulating the market, the government will create a market with a one-size-fits-all product.