Marc Andreessen says more net neutrality laws are not the answer

The concept of net neutrality — the idea that cable networks should not give preferential treatment to certain kinds of content — often seems somewhat theoretical, which is why many people latched onto the recent “peering” deal between Comcast and Netflix. They appeared to see it as a tangible sign of how large networks like Comcast could derail that principle, even though a number of experts (including our own Stacey Higginbotham) have argued that the arrangement has very little to do with net neutrality at all.
Despite this, however, the news triggered a heated discussion on Twitter about whether the Comcast deal was evil or not — a debate that included Andreessen Horowitz founder Marc Andreessen, who also held forth on the topic earlier this month. It started with a remark from Matt Yglesias — a former writer with Slate who recently joined Pierre Omidyar’s new First Look Media project:

Andreessen responded by asking whether Comcast should be forced to handle an ever-increasing amount of traffic from Netflix for free, or whether there was some point at which even Yglesias would agree that Comcast should be compensated somehow for that load on its network:
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The venture capitalist argued that too much of the discussion about net neutrality assumes that the internet is a static thing, rather than something that is likely to increase exponentially in terms of its demand for bandwidth, and that a strict or dogmatic adherence to net neutrality would likely “kill investment in infrastructure [and] limit the future of what broadband can deliver.”
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After Fortune magazine writer Dan Primack argued that Comcast’s monopoly was a big part of the problem, Andreessen responded by comparing Netflix’s demands on the network to the highway traffic system. What if there was a trucking company whose usage of the highway system was growing by 200 or 300 percent every year, the VC asked — at what point would it seem natural to charge that trucking company more for its use of a public resource, even if that might raise prices?
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Yglesias argued that the internet was more akin to the sewer system or the electrical network — that is, something which tends to become a “natural monopoly” because of the investment required and therefore needs to be regulated. But Andreessen reiterated his point that the difference with the internet is demand for bandwidth and access is increasing at exponential rates, something that isn’t likely to happen with either sewers or electricity.
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As he did in his earlier conversation, which I wrote about and collected as a Storify, Andreessen argued that the best defense against monopolies and the best way to protect the principle of net neutrality is to have more competition. Among other things, he suggested that unlocking more unlicensed spectrum for use by alternative access providers would be helpful, along with helping to encourage local providers to create or license competing networks.
When Jeff Jarvis asked how Andreessen would square the idea of open networks with his views on net neutrality regulations, the VC argued that one thing the regulator could do (since its ability to regulate net neutrality was weakened by a recent court decision) is to prevent networks from discriminating based on specific types of content, but allow them to discriminate based on the amount:
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Andreessen argued that creating more regulations around net neutrality would just entrench the existing monopolies and dominant market players, and make it much harder for new competitors to enter the market and provide alternatives. Such laws, he argued, typically favor incumbents and lead to what he called “regulatory capture,” where only those large players who know how to play the regulatory game are allowed onto the field and this creates “crazy high barriers to entry.”
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So then what is the answer to the problem of protecting consumer choice and blunting the force of potential monopolies? Andreessen was somewhat less specific about that, saying the answer was likely “some combination of incentives, deregulation and antitrust” and that a “one-time government antitrust strike” tends to be far more pro-consumer than “an ongoing regulatory regime.” Stacey has argued that one thing the FCC could do is to force carriers like Comcast to be more transparent about the deals they are cutting with content companies.
After a commenter below took issue with Andreessen’s trucking/highway analogy, I asked the venture investor about it on Twitter, and he said the comparison was designed to test whether net neutrality advocates could see any scenario in which a content provider would have to (or should have to) pay higher rates. Charging anything is often viewed by net neutrality proponents as “immoral,” he said.
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Andreessen said he’s concerned that if regulators continue to enforce existing rules or make them even tougher, then network operators won’t have any incentive to invest the amounts of money required to improve the bandwidth of the internet and provide the future technologies he is looking for — technologies and applications that could require thousands of times the amount of bandwidth we currently have available, such as “true immersive, always on, high-def videoconferencing.”
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Anthony De Rosa of Circa argued that the highway analogy suggests bandwidth might be best served by being turned into a public utility, in the same way we have a public infrastructure of roads, etc. subsidized by taxes rather than relying solely on toll roads. But Andreessen said this kind of approach would “kill innovation and progress, and lock us in to current broadband levels forever.”
Technology writer Dan Gillmor suggested something similar — that public investment in infrastructure could be subsidized by taxes, and then companies could innovate on top of that basic infrastructure, an approach Andreessen said he would prefer if there was going to be any government investment at all. However, he said he would prefer if it was left to the private sector, at which point Gillmor noted that this likely would not have worked out that well for the public highway system:
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Post and thumbnail images courtesy of All Things Digital