Democracy & Technology Blog Back to the Future

David Isenberg says investment-killing Net Neutrality regulations aren’t enough. What we really need is something more draconian…more radical…more “permanent”….What we really need, Isenberg says, is “structural separation” that would break up the cable and telecom companies and confine their business to a superslim niche of delivering bits. In other words, prohibit the communications providers from selling applications or content or services. Digital technology and abundant bandwidth is pushing in this direction over the long term — it’s what we call the separation of content and conduit, where specialization yields (1) network companies that primarily supply bandwidth and (2) app, content, and services firms that focus on software, videos, e-mail, etc. But it is not an absolute law of business or economics. All industries undergo waves of vertical integration or disaggregation, depending on the economics of the era’s technology. Imposing the rigid end-result of “structural separation” on such a dynamic, evolutionary, and tricky business environment as the Internet via blunt legislation from Washington would yield catastrophe. It would stop much-needed fiber-optic and wireless investment in its tracks and guarantee Americans didn’t get any more bandwidth over the next decade. The Exaflood would recede and yield to a data desert. Isenberg’s favored content and applications companies would search in vain for bandwidth that wasn’t there.
Ten years ago Isenberg’s “stupid network” theme was a clever play on words that illuminated a new bit-centric paradigm of digital abundance. Too bad his stupid network is no longer an ironic figure of speech.
-Bret Swanson

Bret Swanson

Bret Swanson is a Senior Fellow at Seattle's Discovery Institute, where he researches technology and economics and contributes to the Disco-Tech blog. He is currently writing a book on the abundance of the world economy, focusing on the Chinese boom and developing a new concept linking economics and information theory. Swanson writes frequently for the editorial page of The Wall Street Journal on topics ranging from broadband communications to monetary policy.