Net Neutrality

net-neutrality

Imagine if your power company had the ability to control which brand of refrigerator you could use in your kitchen. Or your telephone company could decide which model of telephone you were allowed to plug into the wall. Or your cable company had cut a deal with a TV manufacturer, and you couldn’t watch TV on anything but their brand of television?

We wouldn’t put up with this kind of behavior by our utility companies. There’s a movement afoot called “Net Neutrality” that is working to apply the same principal to the Internet, ensuring that it remains the hotbed of freedom and innovation that has driven our economic growth for the last fifteen years.

Like most things that matter, Net Neutrality has suddenly become a hot topic, and I find myself agreeing more with President Obama’s FCC chairman (for the most part) than the Republican leaders in Congress, who are taking the side of the big telecom carriers.

First, let’s discuss what net neutrality is and is not.

Net Neutrality is not about controlling the price of broadband or eliminating the ability of telecom providers to manage their networks through tiered pricing. The forces of free market competition, even though there is too little competition in broadband, can keep pricing in line far better than government can.

(In fact, it’s very possible that tiered pricing could actually create competitive pressure and reduce prices for those of us who use less bandwidth. On AT&T’s wireless network, the top 3% of its smartphone users consume a whopping 40% of its network capacity.)

Net Neutrality is about keeping the Internet “fair” for all of the different web sites and applications that run on it. When you type in a web address or download your e-mail, you’re transmitting data over your local telecom company’s network, and they transmit it out to the public Internet for you.

We’re at risk of the telecom companies trying to use their control of the “pipe” to determine what can and can’t flow through the pipe, or slowing some applications while letting others run at full speed. In theory, this could one day extend to Yahoo cutting a deal with AT&T to be the “exclusive” web mail provider on their network, blocking Gmail or Hotmail.

Without Net Neutrality rules, cable companies could also slow or disrupt YouTube or Hulu video streams to promote their own television or online video offerings.

Government is at its best when it ensures that businesses tell the truth, do what they said they were going to do, and behave in a way that allows fair competition – and no more.

Net Neutrality is about that last part – requiring telecom companies to compete fairly for customers and act in a way that allows innovation on the Internet to continue to drive economic growth and prosperity for us all.

Illustration Credit: neoseeker.com

Dian5

I just wonder how we can be assured that's all the government will do. Especially this administration. How can we know this is not the first step on a very slippery slope? Free speach often seems to be fighting for it's life on a daily basis.
http://www.aaronklein.com/ AaronKlein

I hear you…but I think pointing out when the President is right gives us more credibility to point out when he's wrong.

Also, I think our choice here is regulation by big business or big government – we should pick the option that gives us the most freedom and innovation!
http://benmavy.wordpress.com Ben

Help me out here Aaron. You believe the government should tell private companies what products they must or must not sell to consumers? Seems like the time to broach this subject is if internet service becomes monopolized and the monopolies restrict access to information. Right now, if a consumer doesn't like his internet service provider (ISP), he can probably find a new ISP.

I don't mind the largest customers of a business getting preferntial treatment. That's the way a smart business operates (including power companies). Your analogy of a power company ignores reality. A smart power company in a free market wouldl route available power to their best customer first if there wasn't enough to go around. What's the difference between this and an ISP giving packet priority to their best or biggest customers (or to themselves)?
http://www.aaronklein.com/ AaronKlein

Not quite. First, remember that all of these private companies are using publicly granted right-of-way or spectrum to deliver their services. I want them to compete and make healthy profits that incentivize them to invest more in their networks.

Second, most markets are practically monopolized and rarely does it get beyond a duopoly. (I believe your house might have two decent options, which is great – I have almost no good options for broadband. I'm trying to patch together a solution with cellular 3G to see if I can develop a decent option, but the pricing is almost prohibitive. Still, it's the carrier's right to charge what they want/need to charge, so I'm not calling for price controls or anything absurd like that.)

Obviously, I'd vastly prefer a completely regulation-free approach if the big telecom companies would voluntarily agree that they will maintain free access to the Internet without discrimination. And if 90% of Americans had three or four or five providers to choose from, competition alone could probably protect our freedom.

As I tried to make clear in the post, this isn't about the quality of service at what price. Your point about prioritizing the traffic of their “best customers” would be totally acceptable under the FCC's framework. What they couldn't do is discriminate based on the CONTENT of what is going in or out…like blocking access to YouTube or Hulu because they'd prefer you watch cable TV, or some other video site.

That kind of big business control over what I can access over the Internet is only slightly better than big government control of the same – both are unacceptable and need to be opposed. In addition to being an assault on freedom, it's anti-competitive and will destroy the kind of Internet innovations that will make Iran and China free countries some day.
http://benmavy.wordpress.com Ben

Your proposal seems like a solution looking for a problem. My ISP doesn't block content and they swear they have no intent to do so. Unless you live in a rural area you probably have access to multiple if not many ISPs. City slickers shouldn't have to subsidize our internet in the sticks, which is what your proposal essentially does. Under your proposal, I couldn't negotiate a deal with my internet/cable provider to give me a discounted rate for internet service in exchange for allowing them to block Hulu or whatever sites we agreed to. That sounds like the kind of regulation that will get in the way of innovation and interfere with the free market.

The way I understand this proposal, an ISP would be barred from selling prioritization of their bandwidth. In other words, if Hulu wanted to pay my ISP to prioritize their data flow, this would be against the law.
http://www.aaronklein.com/ AaronKlein

I really respect your point of view, but seriously, have you ever tried to negotiate anything with a telecom carrier? As one of my friends said yesterday on an unrelated matter, Verizon's motto is apparently “we're not happy until you're not happy.” I don't see true potential for negotiating lower fees in exchange for blocking access to certain sites as a reality.

However, what is a reality is that most people have two good options: DSL and cable. (Others choose to live in rural areas and have no good options, but I'm not asking for a subsidy. Net Neutrality still won't give me good broadband options.) Duopolies are not a sufficient market force to protect freedom, in my opinion.

Allowing big business Internet players like Google or Microsoft to use their billions of dollars to slow or block budding competition is the 21st century equivalent of the old newspaper barons bribing people to disrupt the distribution of competing papers. Government allowing public spectrum or right-of-way to be used in the process is even more disturbing. It's anti-competitive, anti-freedom and wrong.

I think it's very appropriate for government to require companies to behave competitively in a way that creates working free markets and provides equal opportunity for all. It's one of the few things government should be doing.
http://benmavy.wordpress.com Ben

Thanks Aaron, I really don't have an opinion on this issue, except for the usual skepticism for anything government. Why are the Cato Institute and the groups you and I would normally trust lined up against net nuetrality, while the leftists are pushing for it?

I've negotiated lower prices with my phone carrier before. The competition for residential phone service used to be so intense you could switch providers every month and get better prices.

We should be very slow to trust that government regulation is an aswer to a problem. On very rare occasions it may be, but more often the damage caused by a regulation is worse than the problem it was intended to solve.
http://www.aaronklein.com/ AaronKlein

I can't answer that one except to say that some folks may be letting their healthy skepticism of government interfere with what is government's proper role.

This would be a fascinating philosophical conversation that we should have over coffee one day soon. Wouldn't you agree that every time government takes action to protect freedom for all, a “right” of the few is restricted?

For example, the First Amendment guarantees the right of all to free speech, but it eliminates the right of a public official not to be criticized. (John Adams saw it differently, but he was wrong.)

The Second Amendment guarantees the right of all to bear arms, but it eliminates the right of certain people to “feel safe” (among those who have the belief that individual gun ownership does more harm than good).

The point being, both of those “government regulations” were created to protect freedom for all, at the expense of few. In the Internet age that we live in, it seems to me that Net Neutrality is approaching the First Amendment in importance when it comes to protecting freedom.

I'm willing to restrict the “right” of telecom companies to use public right-of-way and public spectrum to block and discriminate access to the public Internet, in exchange for protecting freedom of innovation for small businesses, and more importantly, freedom of access for the broader public.
Ben

Your comparison of access to internet with other constitutional rights is nearly identical to the the argument for government intrusion into health care:) The 2nd Amendment does not guarantee us the right to free or government subsidized arms, or even to the arms we'd like to have. It simply prohibits government from “infringing” on our rights. If a gun manufacturer was only interested in selling me a gun that fired ammunition manufactured by his company, that's his right. I don't have to buy the gun, even if it's the only gun on the market.

Looking forward to the coffee. Come prepared to answer this question: Is there any chance government regulation is hampering the internet service industry, what government regulations/bureaucracies could we eliminate to spur more investment and competition in the ISP industry?
http://www.aaronklein.com/ AaronKlein

With respect, my friend, there is NO way to draw the same line to health care. That bill didn't protect freedom for ANYONE no matter how you spin it.

Looking forward to the conversation!
Dian5

Wow! Can I sit in the booth next to you two when you have coffee? What an intelligent exchange of opinion.
http://www.aaronklein.com/ AaronKlein

You would definitely enjoy Ben…he's a first-class debater and knows how to represent his ideas well.

Net Neutrality

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