Pro Net Neutrality Documents Net Neutrality Would Benefit China vs. U.S., Economist Says Bryce Baschuk Communications Today September 26, 2006 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. The cable system needs competition and innovation, 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. Advocacy of net neutrality by Google and other Internet companies is "absolutely rational," Rutledge said, noting that they're trying to protect their profit margins. 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: "Essentially the entire system will grind to a halt.""The U.S. IT industry will not dry up -- it will move overseas" to nations with better infrastructure, Rutledge said. For instance, China's telecom infrastructure could accommodate a growing IT industry, he said. Big cities there have strong wireless service, Rutledge said: "It's clear that the telecom industry has experienced an incredible rate of building out."The problem isn't hypothetical, Rutledge said. His venture firm, Rutledge Capital, was "interested in a Tennessee company that had its manufacturing based in Mississippi," he said: "Memphis is a good area in terms of fiber coverage. However, the manufacturing plant in Mississippi had no broadband." Plant and hq couldn't communicate adequately. "The 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's communications system was so strong.