FEW SALES PITCHES IN AMERICA have as much power as these four simple words: "All you can eat." That applies not just to gut-busting buffets but to a smorgasbord of services that aren't dispensed with ladles. Rental cars come with unlimited miles. Cable TV packages offer unlimited hours of TV viewing. Banks let account holders write unlimited checks.
This sort of bargain is common among communications services, such as local and long-distance telephone service and access to the Internet. In fact, one factor in the rapid growth in Internet use in the 1990s was the switch by service providers to a flat monthly rate for unlimited use, rather than per-minute billing.
Now, however, some of the country's largest Internet providers -- AT&T and BellSouth in particular -- are complaining that the deal is flawed. It's not enough for them to be paid by their customers; they also want to extract fees from the companies their customers do business with. For example, if an AT&T customer watched video from Google's online service, AT&T would bill Google for the privilege of having those bits delivered swiftly and intact.
Providers are also floating plans to charge people according to the things they do online or the amount of data they download. For example, those who use Internet-based phone service instead of Ma Bell could have to pay an extra fee. Or basic ISP plans could cover the equivalent of 200 song downloads -- but add a surcharge for anything more.
Comments from various telecom executives have spurred Google, Microsoft, Yahoo and other Internet companies to lobby Congress for protection against targeted, "discriminatory" tolls from the companies that own the Internet's pipes. They warn that powerful network operators such as AT&T could distort competition between Web-based businesses by giving some sites or services preferential treatment -- either because they're affiliated with the service provider or because they pay extra fees. They argue that consumers, not interested middlemen, should decide who succeeds or fails.
The telcos and cable operators respond that they want to innovate too. Some services, such as live video feeds, could work better if their bits are given routing priority over less time-sensitive transmissions, such as e-mail, instead of the first-come, first-serve protocol in force. Online movie sites also might be willing to pay to speed up their customers' Internet connection for the duration of a film, boosting the picture quality.
If there were vigorous competition among providers of high-speed Internet access, lawmakers could trust the market to find the right balance between preserving the Internet's openness and enabling network operators to experiment with new business models. Sadly, many parts of the country have only one or two providers of high-speed networks, and that's not enough to keep those providers honest.
That's why lawmakers should adopt "Net neutrality" rules, to preserve the open and nondiscriminatory nature of the Internet, which has been critical to innovation online. That innovation is an increasingly vital part of the U.S. economy.
Internet providers can still find new fees to impose without distorting competition or favoring affiliates, such as charging customers extra when their downloads exceed a certain point or offering Web companies enhanced services at reasonable fees. In the long run, though, the best way to preserve all parties' ability to innovate is to give Internet users and Web-based enterprises more ways to connect.
Lawmakers and regulators need to give new high-speed Internet services, particularly wireless ones not affiliated with the local phone companies, more chances to challenge the reigning telco-cable duopoly. Toward that end, they should accelerate the auctions of valuable wireless spectrum now sitting idle and make other frequencies available for unlicensed use. But in the meantime, they should at least ensure the Net remains neutral.Copyright © 2014, Los Angeles Times