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August 21, 2013

CBS turns net neutrality on its head

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I hate to bring back up the topic of net neutrality, since those of us who worked on the issue for a decade are pretty much sick to the teeth of it, and we're all enjoying a brief respite from net neutrality as we await the results of Verizon's court challenge of the FCC's authority to impose net neutrality rules.

. . . (ahhhhhh)

But I can't help but point out that, in the current retransmission dispute between Time Warner Cable and CBS, somehow CBS has managed to turn the major concern of net neutrality proponents on its head.

You see, those who were pushing precautionary net neutrality rules hate the fact that networks are privately owned. They don't believe that capitalists can be trusted to own the means of production (sound familiar?) when it comes to the Internet, and so they most commonly focus their ire on ISPs like Verizon, AT&T, Comcast, TimeWarner Cable, Cablevision, etc.

So net neutrality proponents always assumed the ISPs would block competing traffic from their networks or otherwise would use their ownership of the networks to advantage themselves and disadvantage their competitors. Hence their advocacy of regulations that attempted to put handcuffs on what ISPs could do with their networks.

How ironic is it, then, that in the retransmission dispute between TimeWarner Cable and CBS, that it's CBS that is blocking TimeWarner Cable customers from getting access to CBS content through the Internet, instead of the other way around?

Now, the retransmission consent system is a mess, and it's clear that there is need for an overhaul. It's not my point here to go into great detail on solving the retransmission problem, though I hasten to point out that any true free-market reform would still leave open the possibility for disputes to arise and for service to be occasionally dropped. The only way to prevent service interruption as a negotiating technique is more government compulsion, not less, which we would not be fans of.

But CBS's actions block Internet content from all TimeWarner Cable customers, including customers who only purchase broadband from TimeWarner Cable but get their video from another service. Yes, that's possible--in fact, right here at IPI we get our broadband service from TimeWarner Business Class, but our video from a satellite provider. So CBS's actions are certainly not proportionate to TimeWarner Cable's. It's hardball negotiations, as they say.

I just think it's funny that during all of the net neutrality debate, I never heard anyone project that it might turn out that the ISP might not be the one blocking, and instead would find itself the victim of blocking. Just goes to show that regulators don't have sufficient knowledge about the way markets are going to develop. They can't anticipate everything, and so regulators should be more modest about what they attempt through regulation, and should trust markets to a much greater degree.

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