Internet Regulations Coming

One sobering thought to think about while you are celebrating the FCC’s decision to move forward with net neutrality regulations is that for the first time the FCC is asserting itself as the authority to regulate how the web is governed.

With Thursday’s vote, the five-member panel began the process to move forward with the regulations announced last month by the agency’s chairman, Juilus Genachowski. His proposal would formally codify the FCC’s four existing principles, intended to prevent Internet service providers from giving preferential treatment to certain content and services. He also proposed two additional principles: one to ensure providers do not discriminate between applications; and another to require Internet companies to disclose their network management practices to consumers.

[From On 5-0 vote, agency moves ahead in push to regulate Internet – TheHill.com]

If I am incorrect I would appreciate hearing about it, but to my knowledge all regulatory action to date involving the internet has been specifically targeted at commerce activities that are potentially fraudulent, data privacy (or lack thereof it would seem at times), technical aspects, and specific speech, such as SEC regulations on company disclosure. VoIP has been another focus of regulation but that would appear to be an extension of their traditional focus on telecommunications more so than Internet regulation.

I am a proponent of net neutrality but in the pit of my stomach I have a strong fear that now that the FCC has determined they can broadly regulate the relationship between internet technical service providers and content providers that they will have a reflexive desire to overreach much like the FTC did with their much maligned “guidelines” for bloggers and advertisers. There is one absolute truth about Washington D.C. and that is the desire for turf knows no bounds and once authority has been established it is fully exercised and rarely relinquished.

I simply hope that now that we have achieved what has long been desired with net neutrality that we won’t ultimately regret it.

Newsday.com Destined for Failure with Pay Wall

Cablevision must have gotten punch drunk with all of the talk coming out of newspapers about going to a subscription model for their online services, because they are going big, really big, with a $260 a year pricing plan for Newsday.com

Those who are not customers of Optimum Online or the newspaper – both owned by Bethpage-based Cablevision Systems Corp. – will have to pay a $5 weekly fee. However, nonpaying customers will have access to some of newsday.com’s information, including the home page, school closings, weather, obituaries, classified and entertainment listings. There also will be some limited access to Newsday stories.

[From Newsday.com moves to subscriber model]

In reality this is a lot of talk about something that will actually have very little impact on revenue because if you are a Newsday subscribers or a Cablevision cable customer you will have access to the Newsday.com site for no extra charge. Given that Newsday is concentrated on Long Island and Cablevision has a virtual lock on that region, what the online pricing plan is doing is not increasing revenue but defending revenue that is under assault by adding the online service as something extra subscribers get.

In the final analysis, this is exactly why it will fail. By creating a pricing plan that defends rather than attacks a market the company is conceding defeat in print and this strategy will have the effect of slowing audience growth online in the one segment that the paper requires, young people. I am willing to give Newsday and Cablevision some credit for being creative with a multichannel strategy that covers TV, print and online, but this pricing plan is a throwback to a subscription model that simply doesn’t work anymore.

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