Stopping net neutrality legislation is central to helping U.S. telcos and ISPs compete against Chinese counterparts, an economist said at a TeleConsensus and U.S. Chamber of Commerce forum Fri. Advocacy of net neutrality by Google and other Internet companies is 揳bsolutely rational,?said John Rutledge, acting pres. of Mundell International U. Business School in Beijing, who used to be an adviser to the Bush Administration on tax policy. Rutledge said the companies are trying to protect their profit margins and keeping the status quo would help suppress their costs, he said. But the Bells and cable companies need a change, Rutledge said. The cable companies have put millions into U.S. broadband networks on which Internet companies are getting a free ride, he said. A net neutrality law would leave cable companies no incentive to spend more on their networks, Rutledge said: 揈ssentially the entire system will grind to a halt.?br> n揟he U.S. IT industry will not dry up -- it will move overseas?to nations with better infrastructure, Rutledge said. For instance, China抯 telecom infrastructure could accommodate a growing IT industry, he said. The problem isn抰 hypothetical, Rutledge said. His venture firm, Rutledge Capital, was 搃nterested in a Tennessee company that had its manufacturing based in Mississippi,?he said: 揗emphis is a good area in terms of fiber coverage. However, the manufacturing plant in Mississippi had no broadband.?Plant and hq couldn抰 communicate adequately. 揟he physical location of the plant might as well have been worlds away,?he said. In fact, Rutledge said, the company moved its operations around the world, because China抯 communications system was so much better.
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