Bucks for Bandwidth

As Matt Singer points out, if the telecom companies get their way, we'll still have the internet, but not as we know it:

Broadband companies are talking about charging for preferred bandwidth access to content providers. In other words, if you can’t pony up the bucks, people won’t be able to access your content. For independent content providers like myself, that can spell trouble.

The real problem in all of this is that it would fundamentally take away from what the Internet is, which is a consumer-driven wonderland. Consumers pay for access and have complete discretion about where to go. And whether Skype or iTunes or Left in the West is faster has absolutely nothing to do with whether Skype is buying off the internet company.

Expect for this to be a huge fight as America’s corporations look to claim control over the Internet.

In other words, the broadband providers are seeking to move from an all-you-can-eat to an a la carte model. Almost certainly at the expense of reducing consumer surplus and generally curbing the exuberent activity level of the internet. From the point of view of the broadband providers, doing this would be perfectly justified, Stephen Gorden of the Hammer of Truth articulates this view:

When my wife and I go out to eat, she often eats the Caesar salad while I order the thickest steak in the house. I don’t know anyone who would argue that my tab shouldn’t be higher than hers, as I’m the one consuming more resources. I also know that I can surf for porn all day and not even begin to approach the bandwidth of one VoIP line going 24/7. To some degree, it is fair for people to charge more if greater resources are exhausted in the effort.

(I should add here that Stephen is not a corporate shill -- I'm not sure what his solution would be, but it involves getting "the government out of the picture altogether.")

A few hypotheticals for how this scenario might play out. Ask yourself, which one would you prefer?

1) Legislate to enforce the continuation of the status quo.
2) Let the ISPs charge what their want, but ensure that there is enough competition between ISPs to prevent rampant rent-seeking.
3) Broadband to be treated as an infrastructure, which the government will ensure availability to all, much like the highway.
4) Just let the ISPs charge what they want.

I think that 1) is the easiest solution, 2) is the best, but difficult. 3) is desirable on many levels, and would be my choice except for the fact that it would kill innovation in terms of finding new technology to access the net and 4) is perhaps the fairest, but a disaster from a utilitarian point of view.