Prominent regulators in the European Union and US contend that Big Tech is not paying enough for using broadband networks. Their preferred remedy is for governments to collect money from Big Tech and then disperse it to broadband providers, presumably to subsidize serving the poor and high-cost rural areas. This is an idea whose time should never come.

The first person of note to argue Big Tech isn’t paying enough was Ed Whitacre in 2005. The then CEO of Southwestern Bell, and eventually AT&T, said that Google, Microsoft, and Vonage “use my lines for free—and that’s bull. For a Google or a Yahoo! or a Vonage or anybody to expect to use these pipes for free is nuts!” This triggered a firestorm, including claims that he wanted “to destroy the free internet.” His statement fueled support for net neutrality, which at the time meant that all internet traffic should be processed and charged the same, regardless of its value and technical needs.

Under a Whitacre business-driven approach, broadband providers would charge Big Tech based on how important the content and services are to users, how important the users are to Big Tech, and how important both are to broadband providers. Money would be used to expand networks and encourage broadband subscription, because that would be in the best interest of the broadband providers. This approach gives broadband subscribers, Big Tech, and the broadband providers the biggest bang for their buck.

But now Whitacre’s heretical claim is being co-opted by government officials, at least as long as they are the ones collecting the money. How a government-run broadband billing system would work is anyone’s guess, but a few characteristics are predictable. We know from experience that government actors would behave opportunistically, which would likely result in more money being taken from politically disfavored companies and more money being given to politically favored companies, sometimes without regard to impacts on customers. Opportunism would also lead to money being diverted from broadband for other purposes. This is already happening in some of the broadband programs funded by the 2021 Infrastructure Investment and Jobs Act.

A government-run billing system could also be less demanding for broadband providers, resulting in less broadband. Under a business-driven arrangement, broadband providers would compete for customers and the opportunity to serve Big Tech. This competition would pressure broadband providers to make efficient use of the dollars they receive. In contrast, competitive pressures are often absent when governments distribute broadband money, resulting in up to 50 percent less broadband, by some estimates.

What should be done? Governments should leave broadband billing to the broadband providers. This would require that the providers improve billing systems, but this is feasible, and all businesses have to bill for the value they provide. Cisco could have already provided a tollway network technology when Whitacre made his statement in 2005.

The implementation of 5G also provides a new opportunity. 5G technology includes the ability to slice networks. As I explained in 2017, slicing “enables multiple virtual networks on a common physical infrastructure. Each slice can be customized for specific applications, services, customers, etc.” Broadband providers can offer Big Tech and small tech customized slices for fees that represent the value each slice creates.

Enabling such a business-driven framework would require that some regulators give up at least some of their net neutrality ideologies. But it’s time to give up on ideologies when they stand in the way of the goals they were intended to achieve.

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