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Net Neutrality Doesn't Matter

NEW YORK (TheStreet) -- Following the highly anticipated U.S. Court of Appeals ruling against the Federal Communications Commission's 2010 "net neutrality" rules, Internet advocates fell all over one another to predict doom.

Some investors did as well, with Netflix (NFLX - Get Report) falling 3.5% in a single day

Free Press CEO Craig Aaron's statement on the decision was typical: "The biggest broadband providers will race to turn the open and vibrant Web into something that looks like cable TV. They'll establish fast lanes for the few giant companies that can afford to pay exorbitant tolls and reserve the slow lanes for everyone else."

The problem is that TV no longer requires a fast lane. According to Netflix, a download speed of 3 megabits per second is plenty for most TV files, and you need just 5 Mbps for HD movies

An FCC report issued last February showed most DSL providers, and almost all cable providers, met these requirements easily, and the advertised data transmission rate was usually pretty close to actual performance

Most cable Internet services, in fact, already run at download speeds of over 10 Mbps.

If cable companies don't have to degrade service to give themselves an advantage, what about bandwidth caps that limit how much total data a subscriber can download from the Internet each month?

AT&T's (T - Get Report) "sponsored data" program, for instance, will let mobile content providers pay carriers to prioritize their content when it is sent to phones. It's designed to play on the fear of data caps to push consumers into downloading the carrier's ads instead of content they prefer.

What happens if this model moves to the wired world?

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