European Parliament’s Contradiction on Search and Network Neutrality

Network neutrality is great – it can mean whatever you want it to. When the European Parliament made network neutrality into law this spring, it said all internet traffic should be treated equally regardless of its source. The other week, President Obama asked the FCC (Federal Communications Commission) to make sure network operators don’t do any paid prioritizing, throttling, blocking etc of the internet traffic, which is a different flavour than what the MEPs wanted (or at least another color of ice-cream). And now there is a leak draft of EU member states position which bans ‘management measures which “block, slow down, alter, degrade or discriminate against specific content”’, but allows for ISPs to make deals with so-called “specialised services” to have priority. The ISPs themselves of course would much prefer to be left to their own devices, in part because they want to manage traffic in order to maximise revenue and minimise cost, but also in part because they have a point that some traffic may be more important (imagine telesurgery with a lag or self-driving cars depending on traffic data – of course all examples are of altruistic applications). On top of all this, there is the convergence of infrastructure and services, making it difficult to tell who is an ISP in the first place.

Now, the internet is often described as a public utility (this is also part of the language in Obama’s bid), which makes it similar to things like ports, water pipe systems, sewers, power grids… natural monopolies which don’t match well with market economy solutions. Strictly speaking, this is not the case for ISPs, there is competition – typically four providers in each territories for some reason – but the offers are very similar which make it look more like an oligopoly than a functioning market. (Whether this is due to cartels or normal market forces is a question I’ll dodge for the time being.) The internet itself may look like a public utility, internet access probably not so much. That may have been the case with the pre-deregulation national telephone monopolies, though. (If nationalisation is the answer is another question I’ll save for another day!)

However, one internet phenomenon that is looking more and more like a public utility is search. With more than 90% market share in Europe and 80+% globally on mobile, Google is moving out of the zone where it can be discussed as an anti-trust issue and into public utility land. Imagine a similar situation in any other market! Google is like the city port, the remaining ten percent is the marina at the beach resort. How does the network neutrality logic apply to an “essential facility” like search? It may be a better candidate for neutrality regulation than internet access.

European Parliament voted to break up Google, which in this view is contradictory to the previous parliament’s stance on network neutrality. Why not find a middle ground in competition regulation that helps search engines, ISP’s, internet platforms, payment providers, ad networks and other supposedly independent intermediaries behave? That’s the way it works in, say, pharmaceuticals, cosmetics, air transport, energy, construction, finance, agriculture and pretty much any other sector you can think of.