Opinion: The Case Against Net Neutrality
11/11/2014 2:50PMAmerican Enterprise Institute Scholar Bret Swanson explains why imposing 1930s-era telephone regulations on Internet broadband providers would be a historic mistake.
http://www.wsj.com/video/opinion-the-case-against-net-neutrality/040E9501-8673-457C-AA20-7A6EC2EF53E3.html
"During the President’s official visit to China today, the White House issued a statement from the President saying that he supports government regulation of the Internet by reclassifying broadband under Title II of the Telecommunications Act of 1934. This announcement follows on the heels of the ITU Plenipotentiary meeting, where Chinese member Houlin Zhao has been elected the new Secretary. This statement is not only a terrible message for the US, but for the rest of world. Indeed, foreign authoritarian governments have been looking for justification to monitor networks and users under the guise of net neutrality and the “Open Internet.” Obama’s announcement could not be a better present to the leaders of China, Iran, and Saudi Arabia."
" Net neutrality would allow the government to determine how a scarce resource is allocated. "
http://www.techpolicydaily.com/internet/eisenach-statement-white-house-intervention-fccs-open-internet-proceeding/
AEI scholars’ statements on White House intervention in the FCC’s Open Internet proceeding
ObamaOpenInternet by Shutterstock
The
Obama Administration just announced its support for Title II
reclassification of the Internet. While President Obama acknowledged the
independence of the FCC in his controversial statement, his call for
reclassification is a noteworthy intervention in ongoing rulemaking
procedures. AEI’s scholars share their thoughts on the announcement’s
implications for ISPs and consumers alike.
Jeffrey Eisenach:
- See more at:
http://www.techpolicydaily.com/internet/eisenach-statement-white-house-intervention-fccs-open-internet-proceeding/#sthash.HtNhaXdM.dpufJeffrey Eisenach:
The Federal Communications Commission was created to be an independent regulatory agency, above and beyond the reach of crass politics. The White House’s decision to intervene in an ongoing rulemaking makes a mockery of any sense of independence or impartiality. A legitimate case can be made that a decision as large, and as lacking in statutory basis, as the FCC’s intervention in the net neutrality matter is correctly a matter for politicians, not bureaucrats. To the extent that is the case, however, there is only one legitimate route, and it starts in the Congress, not the White House. If the FCC bows to pressure from the White House on this issue, the agency’s reputation will suffer a terrible stain.Bret Swanson:
The Internet in the US has thrived almost beyond imagination under a multi-decade, bipartisan stance of policy restraint. Imposing Title II telephone regulations on the wildly successful US Internet would be a historic economic blunder.Roslyn Layton:
During the President’s official visit to China today, the White House issued a statement from the President saying that he supports government regulation of the Internet by reclassifying broadband under Title II of the Telecommunications Act of 1934. This announcement follows on the heels of the ITU Plenipotentiary meeting, where Chinese member Houlin Zhao has been elected the new Secretary. This statement is not only a terrible message for the US, but for the rest of world. Indeed, foreign authoritarian governments have been looking for justification to monitor networks and users under the guise of net neutrality and the “Open Internet.” Obama’s announcement could not be a better present to the leaders of China, Iran, and Saudi Arabia. Read my articles about this here and here.Daniel Lyons:
Title II reclassification would impose upon a vibrant Internet a legal regime designed in the 1930s to control the old AT&T monopoly. Indeed, the proposed ban on paid prioritization is more stringent than the obligations we once shackled on Ma Bell. The White House’s proposal to homogenize broadband Internet access is inconsistent with an increasingly diverse marketplace and would deprive Americans of countless innovative business models currently proliferating worldwide. Individualized bargaining allows for experimentation and testing of potentially more efficient business models that could get consumers the content and services that they need better than existing practices. Broadband policies turn upon a host of highly technical issues, in both fixed and wireless markets, that cannot be reduced to political sound bytes. This is why these policy decisions are firmly vested in the hands of an independent agency with the technical expertise to understand the nuances of these policies, insulated from the very political pressure that the White House is attempting to bring to bear on the Commission. There are numerous potentially pro-consumer alternatives to one-size-fits-all broadband access. Whatever rules the Commission ultimately adopts should allow for innovation that provides consumers with the services they desire online, wherever that innovation occurs in the Internet ecosystem.Richard Bennett:
Overall broadband quality in the United States is better than broadband quality in all comparable nations thanks to the facilities-based competition model that we’ve followed since the Clinton Administration. President Obama’s desire to abandon our home-grown policy framework in favor of the approach used in the worst-performing nations such as Italy and France amounts to snatching defeat out of the jaws of victory and compromises the FCC’s legal independence. It’s unfortunate that the White House refuses to put the well-being of the American people above the wishes of misguided and poorly informed activists.Mark Jamison:
The Administration’s announcing how it wants the Federal Communications Commission to decide on Title II regulation of the Internet does not bode well for broadband in the US. The FCC is an independent agency for a reason, namely to keep politics at arm’s length from critical infrastructure investment. Studies over the past 20 years have confirmed what Congress knew 80 years ago when it developed the agency: Politicians like to expropriate the value of infrastructure for their own political ends, and this hurts customers by scaring off investment. An independent agency is intended to stand between politics and investment by regulating under the law through a fact-oriented, transparent process. Whether the Internet has utility and common carriage features that merit Title II treatment is an issue for Congress or for the FCC, deciding under its statutory authority and subject to judicial review.For more from our scholars on Title II and net neutrality, see our archives here and here.
AEI scholars’ statements on White House intervention in the FCC’s Open Internet proceeding
ObamaOpenInternet by Shutterstock
The
Obama Administration just announced its support for Title II
reclassification of the Internet. While President Obama acknowledged the
independence of the FCC in his controversial statement, his call for
reclassification is a noteworthy intervention in ongoing rulemaking
procedures. AEI’s scholars share their thoughts on the announcement’s
implications for ISPs and consumers alike.
Jeffrey Eisenach:
- See more at:
http://www.techpolicydaily.com/internet/eisenach-statement-white-house-intervention-fccs-open-internet-proceeding/#sthash.HtNhaXdM.dpufJeffrey Eisenach:
The Federal Communications Commission was created to be an independent regulatory agency, above and beyond the reach of crass politics. The White House’s decision to intervene in an ongoing rulemaking makes a mockery of any sense of independence or impartiality. A legitimate case can be made that a decision as large, and as lacking in statutory basis, as the FCC’s intervention in the net neutrality matter is correctly a matter for politicians, not bureaucrats. To the extent that is the case, however, there is only one legitimate route, and it starts in the Congress, not the White House. If the FCC bows to pressure from the White House on this issue, the agency’s reputation will suffer a terrible stain.Bret Swanson:
The Internet in the US has thrived almost beyond imagination under a multi-decade, bipartisan stance of policy restraint. Imposing Title II telephone regulations on the wildly successful US Internet would be a historic economic blunder.Roslyn Layton:
During the President’s official visit to China today, the White House issued a statement from the President saying that he supports government regulation of the Internet by reclassifying broadband under Title II of the Telecommunications Act of 1934. This announcement follows on the heels of the ITU Plenipotentiary meeting, where Chinese member Houlin Zhao has been elected the new Secretary. This statement is not only a terrible message for the US, but for the rest of world. Indeed, foreign authoritarian governments have been looking for justification to monitor networks and users under the guise of net neutrality and the “Open Internet.” Obama’s announcement could not be a better present to the leaders of China, Iran, and Saudi Arabia. Read my articles about this here and here.Daniel Lyons:
Title II reclassification would impose upon a vibrant Internet a legal regime designed in the 1930s to control the old AT&T monopoly. Indeed, the proposed ban on paid prioritization is more stringent than the obligations we once shackled on Ma Bell. The White House’s proposal to homogenize broadband Internet access is inconsistent with an increasingly diverse marketplace and would deprive Americans of countless innovative business models currently proliferating worldwide. Individualized bargaining allows for experimentation and testing of potentially more efficient business models that could get consumers the content and services that they need better than existing practices. Broadband policies turn upon a host of highly technical issues, in both fixed and wireless markets, that cannot be reduced to political sound bytes. This is why these policy decisions are firmly vested in the hands of an independent agency with the technical expertise to understand the nuances of these policies, insulated from the very political pressure that the White House is attempting to bring to bear on the Commission. There are numerous potentially pro-consumer alternatives to one-size-fits-all broadband access. Whatever rules the Commission ultimately adopts should allow for innovation that provides consumers with the services they desire online, wherever that innovation occurs in the Internet ecosystem.Richard Bennett:
Overall broadband quality in the United States is better than broadband quality in all comparable nations thanks to the facilities-based competition model that we’ve followed since the Clinton Administration. President Obama’s desire to abandon our home-grown policy framework in favor of the approach used in the worst-performing nations such as Italy and France amounts to snatching defeat out of the jaws of victory and compromises the FCC’s legal independence. It’s unfortunate that the White House refuses to put the well-being of the American people above the wishes of misguided and poorly informed activists.Mark Jamison:
The Administration’s announcing how it wants the Federal Communications Commission to decide on Title II regulation of the Internet does not bode well for broadband in the US. The FCC is an independent agency for a reason, namely to keep politics at arm’s length from critical infrastructure investment. Studies over the past 20 years have confirmed what Congress knew 80 years ago when it developed the agency: Politicians like to expropriate the value of infrastructure for their own political ends, and this hurts customers by scaring off investment. An independent agency is intended to stand between politics and investment by regulating under the law through a fact-oriented, transparent process. Whether the Internet has utility and common carriage features that merit Title II treatment is an issue for Congress or for the FCC, deciding under its statutory authority and subject to judicial review.For more from our scholars on Title II and net neutrality, see our archives here and here.
There are over nine thousand taxing agencies in the US that can't wait to sink their teeth into the Internet economy.
ReplyDeleteNet Neutrality" is Obamacare for the Internet; the Internet should not operate at the speed of government.
ReplyDeleteSenator Ted Cruz
Cruz thanks you for mindlessly carrying his water.
DeleteWhen you begin to pay Local, State, and Federal Internet taxes remember that I stood up for you.
DeleteWithout Net Neutrality, ISPs would be able to block content and speech they don’t like, reject apps that compete with their own offerings, and prioritize Web traffic (reserving the fastest loading speeds for the highest bidders and sticking everyone else with the slowest).
DeleteThe tools ISPs use to block and control our communications aren’t different from the ones the NSA uses to watch us. Whether it’s a government or a corporation wielding these tools or the two working together, this behavior breaks the Internet as we know it and makes it less open and secure.
We must fight to ensure the Internet we love doesn’t become a platform for corporate speech or another tool for government spying. We must protect the Internet that lets us connect and create, that rejects censorship and values our right to privacy.
The Internet should remain a forum for innovation and free expression. Open, affordable, fast and universal communications networks are essential to our individual, economic and political futures.
To date Mick how have you been inhibited on the net?
DeleteRegulators always use protection of the public as a tool.
This is all about sucking more taxes out of the public.
While I will admit that ISP’s that also provide content like Comcast and TimeWarner certainly have a compulsion to chock competition content, high bandwidth companies like Netflix are the reason that it is even a topic of discussion. Netflix sells its product which is streaming video or large size file transfer to customers at a very low price. Who doesn’t want to get this service at a low price? The bottleneck in business model of companies like Netflix service of course is the ISP’s who must, out of their own profits, continue to build volume to keep up with the demand for capacity but are prohibited from charging Netflix to cover the costs of insuring delivery of that traffic.
DeleteRick asked once why the US was continually slipping down the speed delivery charts compared to other countries..... The answer is that isp’s have always been hamstrung by profits... I don’t believe you would have seen companies like Comcast buy up so many small isp’s had the ability to charge (either end users or content companies) based on peak usage been available to the little operators. I understand the arguments behind ‘net neutrality’ but I also understand that the delivery mechanisms that exist today will not always rule and as people find a way to get around isp type delivery then the subject is mute but by using legislation to interfere with this process, we kill innovation in all areas of this technology.... just like with all other 'public utilities.
Thoughts....
My thoughts TS are that everybody wants to make money while minimizing their operational costs. Neither TimeWarner nor Comcast are in danger of going out of business, nor are they in danger of being unprofitable because of Netflix. As an ironic twist, however, do you think that perhaps TimeWarner and Comcast have a bit of a "you didn't build that" mentality towards the Netflix and porn providers and music streamers of the world?
DeleteLike everyone else, the providers of service are annoyed that providers of content have such a fabulous arrangement wherein they can make a ton of money in a market they pay no upkeep for whatsoever.
Are you aware that the U.S. congress passed laws that allowed the existing computer networks to carry commercial traffic, thereby creating the Internet as we know it? No, Al Gore didn't invent the internet, but he was on the committee that wrote the bill. Do you believe that killed innovation?
ReplyDeleteIn 1992, the U.S. Congress passed the Scientific and Advanced-Technology Act, 42 U.S.C. § 1862(g), which allowed NSF to support access by the research and education communities to computer networks which were not used exclusively for research and education purposes, thus permitting NSFNET to interconnect with commercial networks.
Yes Mick I hear you but,,,
DeleteHave you been inhibited on the net to date?
'congress passed laws that allowed'... How mighty white of 'em...
DeleteScott, the Federal Government owned the net, through various agencies: DARPA, ARPA ;and the NSF.
DeleteWilliam, I have not been inhibited to date.
DeleteThe government is collecting record amounts of revenue. They don't need your taxes from Internet usage they need to cut spending.
DeleteWe need to deregulate not stifle the free flow of information. We are not communist China.
At issue are proposed "fast lanes," or opportunities for big companies to pay Internet providers more money to make their web sites operate at a quicker speed.
DeleteBut opponents, including President Barack Obama, favor keeping things equal -- also known as net neutrality -- so that wealthier businesses don't have an advantage over smaller ones when it comes to paying for faster websites.
What does this have to do with taxes?
Once regulated, next taxed.
DeleteLook at your regulated electric or gas bill.
Hum…. The Federal Government Owned…. I am of course glad THEY have allowed US to use the packet switching technology developed at tax payer expense. I am also glad of the benefits of using THEIR GPS to navigate on THEIR roads… How lucky we are to pay homage and remittance to THEM. Of course there appears to be ample evidence through acts and actions proposed and passed by various presidents and congresses since the Civil War we ourselves are little more than chattel … Some folks even find that thought to be comforting.
DeleteTS, "you didn't build that."
Delete"Don’t let anybody tell you that it's corporations and businesses that create jobs. You know that old theory, trickle-down economics. That has been tried; that has failed. It has failed rather spectacularly," she said in Boston.
DeleteHillary Rodham Clinton
Trickle down has failed everywhere in reality though it continues to flourish in the minds of some. The, "You didn't build that" meme seems to dying a bit except amongst the masses who honestly haven't built anything but are convinced that some day they will as long as the government is kept in check.
DeleteEveryone of us alive today has benefited from someone else's hard work and those who came before us. You don't to be a freaking communist to have some sense of gratitude for it. It's possible I guess that no generation ever hoped that subsequent generations would ever do better then theirs. Still, I think most generations ahead of mine tended to leave something behind. I think the present thinking is to pull the ladder to success up behind us lest someone from below comes up and uses the "gubmint" to steal a gain without appropriately working for it.
Max, you are truly brainwashed. Your entire life has been entangled in entrenched regulation to the point that you can't see past your corneas.
DeleteBuffet, Gates, Zuckerberg, Jobs, Ford,,,they created millions of jobs out of whole cloth. Call it what you want. What have you created? How many jobs Max has your sorry ass created?
And yet you're so dam critical of those that have used their genius to create. Their endeavors which produced the highest standard of living in the history of man you poo pa. Talk about chutzpah, you've got it in spades.
Your response William, addresses nothing I said. Interesting that you would mention a guy like Buffet who clearly believes our system of reward and taxation is whacked. I truly do not understand this new thinking that states that any acknowledgement of predecessors is akin to smearing crap over the entirety the work of any successor. I mean, I understand how this line of thinking advances an agenda of deflecting any sense of scrutiny toward the no rules world you might like to see, but objectively, it doesnt' make much sense.
DeleteBuffet is an investor and a very shrewd one at that. He created millions of jobs out of whole cloth? Not sure I buy that. Buffet buys businesses and grows them. Acknowledging this is not a slap against his genius by any stretch of the imagination. Henry Ford did not invent the internal combustion engine, but was a genius when it came to designing production and making it commercially available for the masses. Gates, Jobs? Both geniuses but both also very fortunate to capitalize on knowledge discovered before they came along. Zuckerberg? What would he be without an existing internet?
I know my place William. When I was a broker, I was quite generous to guys at the desk who had nothing to do with my business but helped pick the phones once in awhile when my customers called and I was away from the desk. As an NP, who knows? I may have my own practice someday and I will be extremely fortunate that thousands of NP's before me fought and scratched for every inch of recognition they now enjoy along with the ability to open their own practice. I have worked very hard and have been rewarded for it. Nonetheless, I remain very grateful and conscious of the fact that I had a lot of mentors and individuals who were willing to help me in the same way that they had been helped by others. For some reason, a lot of people who think like you do are incensed by this mentality.
Max if you can't grasp the relationship between investment (Buffet) and job creation then I can't see where any conversation with you would bear fruit.
DeleteAs stated before, when investment is made that doesn't mean the cash goes into a tin can under the garden. Apple sitting on 150 Billion doesn't mean Cook has a vault and stares at piles of currency every afternoon.
You're partially to blame Max. Your 401 K investment is helping to create jobs somewhere. You dirty capitalist you.
Regarding your post below William where you said less is more, you should remember that when you post. This response adds nothing and once again completely ignores the main gist of my comment. Starting a business or expanding a business is creating jobs. Buying something that was already created is just that. By your definition, I'm a job creator every time I buy a pizza.
DeleteSo Max your point is that investors (who supply capital) are not job creators. Interesting.
DeleteHave another slice.
Google "societal benefit charge."
ReplyDeleteHidden fees the residue of regulation.
They want to make Internet regulation the grand daddy of all the slush funds.
This is how the liberal/progressive/socialist/communist/greens do it.
DeleteWake the "F" up.
It's an interesting debate. I truly see both sides of the argument.
ReplyDeleteThe Internet in it's current form, the form that it has been for the last two decades, is about the purest form of democratic free market capitalism that exists in the world today. Anybody with an idea, some ingenuity, and some balls can create a multi-billion dollar business from their dorm room - the "anything goes" democratic free-market nature of the Net is what allowed MySpace to usurp Friendster, which in turn allowed Facebook to squash MySpace. Pure competition, pure capitalism. If ISPs start choking and charging for bandwidth, it will severely effect a startup's ability to get in the game to beat the big established players. The days of launching Facebook from your dorm room will be long gone (gonna have to raise millions in capital just to get in the game) and so goes that pure democratic free market.
At the same time, the Net has grown exponentially over the last 20 years - not just in terms of the number of people with access, but in the scope of it's use, especially in video entertainment. More & more people, particularly Millennials, are decoupling from traditional video providers (cable, satellite, etc) and are getting their video exclusively via web providers like Hulu, Netflix, etc. They stream their news online, post videos on social media sites, stream live sports, etc. - all of which require huge amounts of bandwidth (which is currently finite) which in turn, requires a huge investment from ISPs to provide access to those services reliably. Why shouldn't bandwidth hogs like Netflix or Facebook pay more to ISPs since they require a shit ton more in terms of resources to deliver reliably to the user?
I favor no one side of this argument, but I'm a realist & figure that something like Net Neutrality is inevitable as the Web enters it's adolescence. As it evolves and become more integrated into every aspect of our lives, it almost has to to meet growing functionality requirements. The days of the virtual, democratic, free-market digital Wild West will morph into something that reflects the markets that exist in the real world.
Everything evolves over time ...
Funky, very nice post. Your last para says it perfect, "The days of the virtual, democratic, free-market digital Wild West will morph into something that reflects the markets that exist in the real world. "
DeleteI actually am a very big fan of competition and that was why I was so intoxicated with pure capitalist thought when I was younger. And then I figured out what the "real world" looks like. Everyone likes the idea of competition, but no one likes getting beat. Free markets promote competition until one or two players hit critical mass and then it becomes near impossible to unseat them, let alone make them compete in a way that benefits the consumer. Totally free markets with no limits provide enormous incentive to cheat or not compete because the reward for winning is the same whether you compete or not. At one time, banks actually had to compete and actually had some stake in the community served, as did smaller retailers. That's all gone today.
Like you say, the advantage that the internet gave to small startups will be squashed too and all of us will eventually be paying a lot more for our internet service to one of maybe three providers who will control most of the flow in the United States.
Thanks Max :-)
DeleteI too am enamoured with the idea of pure competition and you stated the argument against Net Neutrality very well, but I don't see Net Neutrality as a plot to squash the "Little Guy" as much as it is just an unfortunate consequence of a new market maturing.
The ISPs have the daunting task of delivering fast, reliable service over a variety of networks to a variety of mediums. It requires a huge amount of resources that somebody has to pay for - whether that fee is levied in the form of a tax or directly to the ISP is irrelevant in practical terms to the end user.
I view it more as a consequence of a maturing market.
You are both brain dead. Uncle Sap wants to be a middleman, pure and simple, and siphon away untold trillions by the use of hidden fees (Taxes) and other nefarious methods that all creeping scum regulatory bodies employ.
DeleteTwo or three viable car companies in the US? Regulation
Two or three viable gas companies in my State? Regulation
Try to compete with Big Pharma? Regulation
Try to compete with Big Rail? Regulation
Try to compete with Big Tobacco? Regulation
We have already been through a few boom and bust cycles of fiber optic cable supply. Remember Global Crossing? Remember how Corning and Williams Companies rode the market to the heights and then depths based on these cycles?
If the market demands more supply, operators will supply.
Want to kill this golden goose? Want to centralize control of this purely magical resource? Want to further strangle our economy?
Create ObamaNet.
yeah, I get it William. The government is a beast like Frankenstein's monster that will kill it's master unless tamed. You see nefarious intent of the government to tax and steal, I see the cable companies as wanting to tax content providers because "they want a taste". Your list in the middle there doesnt' make much sense to me. I'm not sure what your point is.
DeleteMy point is what you have railed against here many times Max, Crony capitalism. The guys inside the door use government and incessant regulation to keep everyone else out.
DeleteWe used to have dozens of car companies. Now we have three, maybe four it you count Tesla. Two and a half of which are directly supported by Big Government.
Regulation is so special, it's a perfect stealth tool to blame taxes and further tax increases on regulated private enterprise.
We have 17 Trillion and counting dollars of debt Max. Even with the regulations pumping billions into their troughs the pigs can't help themselves and they have to spend more and more.
In seriousness William, a point I cannot debate is that those with money have better access to lawmakers than we do, and hence, we have crony capitalism that I am against. In the real world, we also have corporations who simply use their size and/or a literal army of lawyers to use the courts to accomplish similar goals. I think it's fair to say, I've read more than enough Rand, Hayek, and Friedman to understand your point of view. I just don't believe it works in the real world.
DeleteI believe that from yours and TSs comments, the general view is that since asshole business people buy off asshole legislators, the real problem is not the bad behavior, but instead is the system they corrupt. Therefore the solution is to just end the system and all bad shit goes away. This is fantasy and it's sort of like saying, "We have laws against rape and murder, but people do it anyway so lets just take away the laws and give everyone a gun".
Regulation can't fix bad behavior, it can only punish excess.
Since 2009 I've been working to educate myself and others, to influence current and future leaders, to elect like minded individuals who believe that less is more.
DeleteBecause less is more.
Your education seems to include a need to assume that anyone who doesn't 100% agree with you must, by default, favor a diametrically opposed view. My difference of opinion is by degree. Based on some of your previous comments, I interpret an all or nothing type thinking. All government is bullshit and wasteful, therefore we can just hack away 50% of it without any consequence. The meat cleaver versus scalpel approach.
DeleteFor what it's worth, Rand Paul was on Bill Maher last Friday. It's a shame the Republicans will treat him exactly like they did his Father.
I don't recall naming a percentage reduction. You on the other hand continually posit that more is more.
DeleteMax... don't know if anyone is following this thread but I have to ask.... Of the companies that have 'hit critical mass', could you name for me a couple who have actually stiffed competition without 1) breaking some kind of law or 2) weren't aided by (speaking of the US market) our government.
ReplyDelete