Surprise, surprise!   I hate saying, “I told you so!”, but when on 5^th April the US lawmakers refused to agree that the government should take steps to prevent telephone companies from establishing a two-tiered Internet by charging large content providers extra money for higher-speed delivery, it confirmed a number of things which I have been proclaiming for a very long time.

Firstly, sector specific regulation (which we have in spades in ICT)  is the friend of incumbents and vested interests and NOT the friend of end users and consumers.  Given that the telecoms sector has (with the blind and ill-formed support of lawmakers) managed to preserve for far too long, a business model based upon operating ‘toll booths’ on the networks – it is now too late for them to adapt to life without them – so trying to persuade them or the law makers to make them do so is fruitless.

Interestingly, it was the Democrats in the US debate this week that seemed to understand the implications of all this better.  One of them, from California, Representative Anna Eshoo was right when she expressed her concern that,

"I think this walled-garden approach that many network providers would like to create would fundamentally change the way the Internet works …There is essentially going to be a toll path on what is now an open freeway."

But that’s precisely the purpose of those who are advocating this differential pricing approach to the internet – a walled garden with a toll-booth to get in! 

Secondly, this is the ‘mother of all battles’ I have long predicted as citizens around the world seek to use disruptive technologies and new business models to ‘leak‘ as much as possible back into their own pockets of the $1,600bn a year that they hitherto have been paying out to the telco sector.  And who blames them!  (..thank you Skype!)  

Former FCC chairman (for whom I have immense respect) also points out the naiveté of wrestling with the vested telco interests on their own turf of public policy formulation and regulation.  At the current F2C gathering in Washington (http://www.pulvermedia.com/f2c/index.html ), Powell is reported as saying,

“The legislative process does not work well when it has a weak understanding of innovation and tech policy.  You are talking about 535 members who need to ‘get this’. They have a very shallow understanding [of Net Neutrality].   If you go give them a quiz about the seven layers of the Internet, good luck!   You live by the sword, you die by the sword.  …  Be careful because you are playing their game [the telcos']. We are talking about resources, ability, and 100 years of skill.”

So what’s the answer?   It will not be found in the US nor in Government (local or state) direct intervention and investment in this sector.  Rather, it rests in the hands of consumers and local communities.  As we are seeing around the world in various contexts, when citizens and their elected leaders, wake up to the fact that they and their communities are being taken to the cleaners by the telco sector (both in terms of costs and lack of local connectivity), they will start to take matters into their own hands through using Public Private Partnerships to develop OPLAN infrastructures to serve them rather than third-party operators. 

It will not be long before these OPLANs begin to find their own ways of linking to and from the current concentrations of content (e.g. Google, Microsoft, Yahoo, eBay, Amazon) who are today strongly advocating net neutrality. 

Or as Michael Powell put it to F2C this week:

“You have to make it financially difficult for providers to act in certain ways because the grassroots consumer base will get angry.”

Watch out telcos – we’re all getting angry … VERY angry!.