Why the future of news brands hinges on net neutrality

by Jason Preston on January 26, 2009

If there’s any one thing that stands to determine the future of news brands, it is the current debate in Washington over net neutrality legislation. Why is net neutrality so important?

It is the building block of the abundance-based economy on the internet.

Changing the cost structure of online publishing would allow the larger organizations to, essentially, raise the cost of publishing back to its former level. If it suddenly costs hundreds of thousands of dollars to publish again, then news brands have their monopoly back, and the ad dollars start rolling in.

Let me explain how this works.

New economics

Sites like West Seattle Blog are profitable because Tracy doesn’t have to pay Comcast (or whoever) any extra money to make sure that her data gets through to people’s computers.

That’s what we mean when we say that publishing is essentially free. All the things that used to cost money (paper, ink, time on a press, delivery), now cost nothing more than the monthly price of internet access, no matter how many people it gets “delivered” to.

As I’ve said before in my analogy about the desert, there are two ways to adapt to the situation: you can accept the new economics, or you can try to re-work the technology so that it conforms to the old rules of economics: scarcity.

Old economics

Getting rid of net neutrality is re-working the technology to bring back old economics. If internet service providers are allowed to give preferential treatment to the data coming from customers who pay—essentially making “access to people” a biddable commodity—then the level playing field disappears instantly.

Only larger news organizations would be able to afford the additional cost of ensuring that their web pages display on people’s home computers. Effectively, the cost of publishing goes back up.

And if the cost of publishing goes back up, then media companies get to have their monopoly back on widely-distributed media, and then, the advertising revenue comes flooding back in, as other doors are closed again.

Don’t fight progress

Now, I can understand how this might sound like an excellent idea to a lot of people in publishing right now. Let’s squelch network neutrality and get on back to the good ol’ days.

But as much as I understand that desire to return to a stable system, one that has worked for centuries, I don’t think it’s the right course. I firmly believe that there is at least one profitable news model under the new rules, and that several institutions are very close to figuring them out.

Fighting progress is a fool’s game, and we’d be making a mistake if we were to grind our heel into the innovation that is happening in small corners all over the internet, the innovation that is made possible by the access that the internet provides.

We may not see it at the moment, but I believe that this change is, on the whole, a positive one.

For more babbling about the future of publishing, be sure to grab my RSS feed.

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{ 1 comment }

1 Tom Amontree 01.28.09 at 2:53 pm

Our nation’s nearly 1,400 Internet service providers agree with your point that we shouldn’t “fight progress” when it comes to Internet innovation. Innovation and access are essential to maximizing the full benefit of the Internet for consumers and will help those who publish their work online reach even more readers.

Government and industry share a common goal of improving the Internet to provide universal broadband access. The billions of dollars the private sector has invested in improving our communications infrastructure is a testament to their commitment.

In order to expand access we also need to help consumers understand the benefits of the Internet, as your industry does. A recent study revealed that nearly 60 percent of consumers who could access broadband choose not to and half of those respondents feel they don’t need it. This information gap must be addressed by helping consumers understand the ways broadband can strengthen our economy, improve our health care system and open doors to new educational opportunities.

We need the right policies in place that will encourage a cooperative effort to foster innovation and expand access. Unnecessary regulations will only stifle technological progress and hinder new innovations trying to enter the marketplace.

Tom Amontree
SVP – Communications and Industry Affairs
USTelecom – The Broadband Association

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