How Wireless Net Neutrality Could Kill Kindle Business Model

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Net Neutrality is a good thing, right? Operators of the Information Superhighway shouldn't be erecting toll booths where they feel like it or acting as traffic cops who determine what data and how much of it gets to their users. Giving operators that kind of power will thwart innovation. Or so we're told. But pure Net Neutrality could have a downside, too.

A case in point may be Amazon's highly successful electronic reader, the Kindle. Content can be delivered to the reader wirelessly, but users don't pay for the wireless service. The tradeoff is that there are strict limitations on what travels down that wireless stream to the Kindle.

That is a very different business model than what AT&T is doing with the iPhone or what Verizon is doing with the Droid, argues Peter Suderman, an associate editor with Reason Magazine in Los Angeles. "It's a business model that relies, in fact, on discrimination," he said this morning on On Point, a talk show aired by WBUR, a National Public Radio station in Boston. "You can only get certain things through your Kindle."

"In theory," he continued, "a very, very strict version of Net Neutrality, taken to its extreme, could, in fact, outlaw, or at least make it very difficult, to operate a business service like the Kindle."

Of course, the chairman of the Federal Communications Commission Julius Genachowski has tried to alleviate those kinds of fears by vowing to make regulatory decisions on a case-by-case basis. "They want to do that in order that they don't make really boneheaded moves like accidently outlawing the Kindle," Suderman declared.

The point remains, however, that enforced Net Neutrality may be as bad as no Net Neutrality at all. "What that does is put the [FCC] in the middle of the development of new business models, the development of great new technologies like the Kindle that rely on things that are different," Suderman asserted.

"Net neutrality has served the Internet very well as a principle," he added, "but I'm less confident, I'm less sure, that it's something that needs to be regulated by federal authorities."

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