Common Carriers and Net Neutrality (Part 9 in a multi-part series)

Until 2005 the United States imposed rules on common carriers (legacy telecom companies such as AT&T and Verizon) requiring them to sell bandwidth on their networks to other ISPs at discount prices. The idea was basically that the best way to ensure competition in the ISP space was to make incumbents sell their bandwidth to other ISPs at wholesale prices. This would allow the Earthlinks of the world to compete and, hopefully, create an environment where increased competition leads to lower prices and better service for the consumer. However, in 2005, the telecom companies successfully lobbied the FCC to change the rules.

The carriers argued that the rules unfairly penalized them simply because of the delivery mechanism they used. AT&T and Verizon delivered data services over old telephone wires. Because, as telephone companies, they were designated common carriers, the rules were different. Comcast, on the other hand, delivered data services over coaxial cable and was not subject to the FCC's rule about wholesaling bandwidth. In 2005, the SEC agreed with the legacy carriers and dropped the rule requiring discounted prices.  Some say this decision by the FCC provided a rallying point for the net neutrality movement.

Other countries such as South Korea and Japan have largely maintained similar bandwidth sharing rules to the pre-2005 rules in the United States. One can question whether this is the reason some of these countries have much wider broadband adoption, much faster broadband speeds, and much lower prices. Should the FCC have maintained the pre-2005 rules? Did the rule change spark the call for net neutrality? Should Comcast be regulated as a common carrier? All questions worth exploring.

Good Talk,
Tom