Jun 03, 2015 - 6:00pm

Net Neutrality Will Be Unhealthy for Telemedicine

Senior Editor, Digital Content


The heart rate monitoring function on a Motorola Moto 360 watch.
The heart rate monitoring function on a Motorola Moto 360 watch.
The heart rate monitoring function on a Motorola Moto 360 watch. Photo credit: Simon Dawson/Bloomberg.

I’ve pointed out how the FCC’s net neutrality rules will stymie innovation by raising the costs of investing in broadband infrastructure.

If that argument against excessive Internet regulation is a bit too abstract—finance and investment theory isn’t for everyone-- here's a more tangible argument.

Net neutrality puts health care innovation at risk, warn John Graham of the National Center for Policy Analysis and Roslyn Layton of Aalborg University's Center for Communication, Media & Information Studies:

Net neutrality, as regulated by the FCC in some 300 pages of rules, threatens one of the most promising areas of innovation in health care -- using mobile devices to maintain and improve people's health.

An example of this is an arrangement between UnitedHealth Group and AT&T launched last year. UnitedHealth Group wanted to incentivize low-income pregnant women to watch prenatal care videos on their mobile phones without deducting the usage from their mobile account balance. Unfortunately, advocates for net neutrality mischaracterize this program, called "sponsored data," as discriminatory, and FCC's new rule gives the agency the power to regulate this kind of preventive health care out of existence.

Allowing FCC's new rules to happen would cause the most promising area of innovation in U.S. health care to blow up on the launching pad. This new generation of health entrepreneurs should be allowed to develop payment models without the FCC's permission.

Along with waiting for new health care technologies, there will also be economic costs, Hal Singer, a Senior Fellow of the Progressive Policy Institute, writes in the Wall Street Journal [subscription required]:

That interference will slow down the market for “real-time” applications like telemedicine and virtual reality. These apps may require some form of paid priority to function, and without the ability to negotiate compensation with ISPs some services could be scuttled. With these nascent markets expected to blossom over the coming years—telemedicine alone is expected to reach $1.9 billion in sales by 2019—even a small impediment to collaboration could have major economic and social costs.

By applying last century’s regulatory approach to 21st Century networks, net neutrality will flip the model entrepreneurs have used to transform the Internet into an integral part of our economy. Instead of being allowed to quickly take risks on new ideas and business models, Internet innovators will have to ask for the FCC’s permission. No wonder Sen. John Thune (R-S.D.) warned that net neutrality will "put a wet blanket on the entrepreneurism and innovation.”

We could end up with a U.S. version of France’s Minitel--a path-breaking technology that died because it was unable to adapt—ironically to the rise of the Internet. 

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.