The digital seas don’t need #netneutrality mercantilism

Just like any trade, the producers of digitized content should expect that their packages may be lost at digital sea. In the case of the internet, producers, whether they are sending licensed video entertainment from their servers or pictures from their smartphone of their dog Rover chasing a Frisbee, if they value the delivery of that “information trade”, they should pay the carrier a premium to guarantee its delivery, and that premium should extend to all potential participants in the delivery of that content.

Given that the internet is an interconnection of tens of thousands of computer networks, in order for that premium to extend to all potential participants involved in the delivery of digital content, the premium should be paid up front to the producer’s internet service provider. Why? Because that provider has to pay to hand off the producer’s content to the next gateway. There should be enough of a premium moving through the network to provide an incentive to transport digital content from the originating laptop to the final web server.

Unfortunately for the debate on net neutrality, the rule proponents completely overlook and do not offer any economic analysis to support their position. Their arguments have been erroneously built on conflation of democracy and internet access. As someone who is interested in the digital information trade component of the internet, I find their oversight bizarre and amusing at the same time. The irony is that “democracy” is making the false argument that democracy is under attack on the internet and this argument is going viral.

The argument that should be going viral is that the internet is a commercial platform designed to transport digital content for hire. The content with the most value should be allowed to pay a premium in order to get it to the consumer that perceives this content as high value. This also means that where broadband access providers, content delivery networks, and other content delivery participants recognize this value, they should be expected to recover a piece of the value along the digital transport supply chain.

The Federal Communications Commission should not succumb to calls by netizens for a 21st century form of digital content mercantilism via the imposition of more rules on digital trade. Let the market for digital content determine the prices assessed to the consumer and to each of the participants in the digital content supply chain.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
This entry was posted in commerce, data brokers, e-commerce, Economy, Federal Communications Commission, knowledge economy, net neutrality, Uncategorized and tagged , , . Bookmark the permalink.

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