Nothing to Fear From the End of Net Neutrality Rules
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Goodbye, net neutrality.
I read Tuesday that Internet companies think the Federal Communications Commission’s plan to end the era of a “free and open” Internet will “make the telecom companies [that own and operate the Internet] powerful gatekeepers to information and entertainment.” That struck me as a howler. I thought there’s widespread fear that Facebook, Google, and their hangers-on already are powerful gatekeepers to information and entertainment.
Sorry you won’t be getting any sky-is-falling orthodoxy here. On this issue, I’m a blasphemer. Google (GOOGL), Facebook (FB), and especially Netflix (NFLX) don’t need our help dominating the market. They can pay for access to Internet and pass on the costs on to their customers just fine. And if that doesn’t work, well, boo-hoo. Combined those companies have as much cash as several incarcerated Saudi princes. They got that cash thanks to a “free and open” Internet that has remained free and open for too long.
In coming weeks you’ll hear lots of whining about how the FCC’s proposed rules will stifle innovation, about how small Internet companies can’t possibly get going under the hardship for having to pay for their primary distribution method. It will make about as much sense as VCs and private-equity investors who argue that profits from the non-cash “investments” they make in their funds through their labor should be taxed at a lower rate than my salary. (I’m referring to the dreaded “carried interest” rules, which are as complicated as net neutrality.)
No matter. A lot of money is at stake, which is why the fighting will get vicious.
If one’s man’s trash is another man’s treasure, then one industry’s potential failure is another’s opportunity. I had dinner Monday night in Chicago with a group of experts in the “turnaround” game. Their specialty is salvaging what’s left of bankrupt companies on behalf of their creditors. I was amused to know their dream project: Tesla (TSLA), the cash-flow and operationally challenged carmaker that repeatedly saves itself from oblivion with delightfully futuristic products and ample fundraising. The restructuring mavens know a tough nut when they see one, and they aren’t banking on a Tesla failure any time soon. But they’ll be ready if the day ever comes.
From someone who is thankful for life’s many blessings every day, a hearty happy Thanksgiving to all.