OPINION
Net Neutrality Shopping Is Bad for the Economy

Shopping is normally good for the economy, but not when the shoppers are net neutrality advocates looking for friendly deals on a regulatory forum. Policy makers in Michigan, their current target, should tell pro-regulatory activists to go home, with good reason.

Those who support net neutrality legislation frame themselves as proponents of the Net, but in reality their recommendations would have an anti-Internet effect. The worry is that network providers like AT&T (NYSE: T) or Comcast (Nasdaq: CMCSK) will start charging some Web sites more than others. It is true that network providers would like to charge high-traffic Web sites for their larger usage of the network, but it remains unclear why that would be wrong or unfair.

Government Intervention

Voip.com, an Internet phone provider, is one of the corporations calling for government intervention. Without government oversight, it argues, "consumer-friendly applications like VoIP, online gaming, and streaming homegrown video would likely be squeezed out by the larger corporations that can afford to pay for unfettered service."

It's obvious that Voip.com is simply trying to avoid the risk of paying more for their network use, but the thing Voip.com's executives have missed is that the Net is getting crowded. If network operators can't recoup their costs for the higher bandwidth use, then the network will slow down for everyone and services like VoIP, online gaming, and streaming video won't work so well anymore.

This would ultimately harm businesses like Voip.com, who will presumably then ask the government to fund upgrades to the networks since no private investor in their right mind would fund a network that can't properly recoup its costs. That leads straight to a network run by government, and we all know how well that would work, never mind the free speech issues that would then become a bigger problem.

Money Issues

Of course, it might be possible to avoid the above scenario if network providers got so desperate for cash that they simply increased prices for the end user. That's probably what the Googles (Nasdaq: GOOG) and the Voip.coms of the world really want and secretly predict will happen under a net neutrality regime. Too bad, because the theory is wrong and someone needs to point it out.

What they apparently don't realize is that if network providers were to suddenly jack up prices for the consumer, various consumer groups would begin lobbying for price controls. That argument stands an even better chance than net neutrality legislation of winning the day.

For those who have followed telecommunications regulation over the last decade, this debate is the "same-old same-old." Net neutrality would return network providers to a position in which the network needs to be upgraded, but no private investor is willing to throw their money at a proposition that loses money.

Protecting Freedom

Technology still moves fast, and it is incredibly important that the Internet remains open and free from restrictions, but this also means fighting government controls. The current debate over net neutrality is not one of consumers versus corporations; it is one of corporations versus corporations and if government gets involved it will mean a loss for consumers.

Those who didn't like the idea of encryption controls or Chinese government censorship should fight net neutrality regulations with all their might. On this issue, freedom-loving Democrats and Republicans should join together to save the Internet.

A past Supreme Court decision has already established that the states do not have jurisdiction over Internet-related services. That makes it even more annoying that pro-government activists, having failed to convince lawmakers at the national level, are creating uncertainty for the Internet industry by lobbying the states.

Such activity, especially during the holiday season, is rather Grinch-like. In the current battleground of Michigan, policy makers should set an example for the rest of the nation and send these regulatory shoppers packing.