# Tuesday, 10 August 2010

Google and Verizon unveiled on Monday a proposal that would create two internets: an open one that we know and love today and another one that is more expensive with dedicated pipes and has premium content and services. In theory it would work like this: if you wanted something like YouTube in 3D HD quality with special content (like new movies, etc), that content would only be available on a different set of pipes, pipes you would have to pay for. This will  lead to a tiered, less open Internet.

As expected Net Neutrality supporters went nuts. As reported by Wired, Free Press Political Adviser Joel Kelsey said:

Google and Verizon can try all they want to disguise this deal as a reasonable path forward, but the simple fact is this framework, if embraced by Congress and the Federal Communications Commission, would transform the free and open Internet into a closed platform like cable television. ... It’s a signed-sealed-and-delivered policy framework with giant loopholes that blesses the carving up of the Internet for a few deep-pocketed Internet companies and carriers …

I am torn on this issue. I consider myself to be a free market libertarian. I know what Friedrich von Hayek would say: let Google and Verizon do what they want, tiered pricing is a way to deal with scarcity.

von Hayek is right, there are only so many fat and fast pipes on the internet (scarcity) and if people are willing to pay for premium content and services, like cable TV, then the market should allow for that. The theory also says that there will be positive externalities and the innovation will trickle down to the free/open/other internet. This was the case with cable TV, cable started with HD TV and innovative programming and “regular” free TV caught up.

On the other hand, the Internet is more important than cable TV. The Internet is a platform for business and entrepreneurship. The internet is also a platform for social change (and political protest in some countries.) Living in China I already live in a tiered environment. When I am home in Hong Kong, I can do whatever I want. When I travel 30 minutes north to Shenzhen, I am on the less open, firewalled internet. I see how people use the internet to create businesses and social change here in Hong Kong and how that does not happen in China. (Don’t be fooled about online entrepreneurship stories in China, it does not exist as it does in more open countries.)

While my example of China is a politically charged one and one that deals more with censorship, the internet is a great way to level the playing field. With cloud computing and cheap skilled software programming labor in developing counties, just about anyone can start a business today and be the next Google. If only certain applications and services were available over the “premium” internet, innovation, entrepreneurship, and social change will all suffer.

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