Considering some recent net neutrality proposals, not-so-old-timers may recall some not-so-ancient history. Similar principles were set out at the dawn of the Internet, and then again at the sunset of telco ambitions to enter cable-style video delivery service. What lessons can we learn from such artifacts as video dialtone?

One puzzle in the net neutrality debate has been the willingness of should-know-better tech companies to embrace this form of regulation. They seem reluctant to recognize that as democratic as "neutral" sounds, that such a regime is likely to quickly devolve into a tangle of price and service regulation navigable only by an elite. To someone starting on the telco side, this outlook is unthinkably naive. But it should be equally unthinkable to Net old-timers, who understand the complex history of this "network of networks," and its occasional but important departures from perfect egalitarianism.

A Very Short History of The Internet--Big Changes, Short Time

The Net has been something of an anomaly from the start, a government-funded venture that actually in the end did more good than harm, albeit mostly by accident. Way back in the first days of the Net (NSFNet, financed by the National Science Foundation) the networks operated under the expectation that everyone would connect with everyone (so, for example, email messages originating on one system could terminate on another). But these expectations were not enforced, and NSF also supported community networks such as BITNET. Interconnection was a good way for any player in this space to expand the reach of its own network; there was almost no downside, especially as long as NSF was subsidizing the connections. And the space was small enough that the trust needed for interconnection could evolve as needed, technician to technician, one connection at a time.

As the Net evolved and private and commercial networks piled on after 1990, Internet interconnection, quickly became enormously complex. Ultimately, the large networks transferred traffic for free ("peering"); smaller networks often paid for "transit." Although there have been some problems with peering and transit, there have been remarkably few, especially compared with the daunting problem of regulation, and when the FCC made noises about regulation some years back,[1] they were generally resisted.

Perhaps the tech firms that support net neutrality remember the gentle interconnection of networks past, and that this model did little harm--in a context where economic incentives supported interconnection, and with no enforcement. But the later evolution of peering and transit shows that where free carriage for some and pay-as-you go for others did just fine, also. Some might decry this departure from perfect egalitarianism. But the reality is that the networks had become extremely complex. No one would have known how to regulate this tangle without doing far, far more harm than good.

This brief history raises a key question about today's network neutrality proposals. Why should the evolution of the Internet network pricing, which once proceeded at a startling pace, be arbitrarily halted now, when the network is only half-grown? Particularly when the methods of carrying traffic at the cutting edge--wireless, power lines, and so on--have capacity and quality of service issues to solve that may well best be solved by treating some packets differently from others. The fear that attempts to solve these will result in extortionate treatment of some content seems wholly ungrounded, especially since consumers will be very, very displeased if they cannot speedily access a niece's wedding web site, or a son's latest baby photos, or Amazon.com. This is a market, and demand matters.

A Short History of the Telephone Network: Long Time, Nothing Doing.

A colleague of mine a few days ago referred to net neutrality proposals as "common carrier" regulation for the Internet. And one proponent of net neutrality, answered, in effect, yes, nothing wrong with that. Ah, but wait. Who now remembers video dialtone?

Travel back with me to when the phone companies' main interest was getting into the cable television business. The late 1980s and early 1990s. The FCC, always anxious to encourage competition, were ready to let the telcos in, provided of course, that they operate their video networks so as to allow equal access and reasonable charges and no exclusivity and/or discrimination... on and on. With the 1996 Act video dialtone was swept away and replaced with a regime of open video services, a model requiring operators to reserve two-thirds of their channel space for unaffiliated content. And despite deregulatory intentions it still went nowhere, especially after the federal courts ruled that OVS operators needed local franchises as well as federal approval.

These brave egalitarian proposals never bore fruit. There were a few trials here and there. But basically nothing. It wasn't just that the Internet came along, and interest in getting into the one-way video delivery business waned. The whole regulatory apparatus and process inspired by common carriage was just way too cumbersome and slow, and promised far too little return on investment. If there hadn't been so much delay and complication on the regulatory front, telcos and others could have moved into the video business with some alacrity, before the Net. It was no mere accident of timing that investment moved into then much-less-regulated networks. Investment will always go there.

Right now there are huge opportunities for growth and expansion of broadband networks and services, including content. And problems as well, from spam to capacity limits, from authentication problems to quality of service issues. Hopefully these issues all have technical solutions, but deploying those solutions is going to take some capital. Do we really want to narrow the business models that can be used to raise and recover that capital down to... video dialtone for the Net? Ugh.

*Solveig Singleton is an Adjunct Fellow at the Progress & Freedom Foundation in Washington, D.C. This article represents her own opinions, which may not be shared by PFF, its staff, or it directors.

Notice of Inquiry, FCC 98-187, CC Docket 98-146, Paragraph 79, http://www.fcc.gov/ccb/706/.