Net Neutrality is back in the news. I haven’t changed my views substantially since my April 2014 on the topic, though I am fearful that the cure of an additional layer of government regulation may prove to be worse than the disease. (Internet providers to consumers are already functioning under a certain amount of government regulation, e.g., municipal regulations that exclude competitors.)
What do readers think? Who has a good argument against net neutrality when both publishers and consumers are already supposedly paying for the bandwidth consumed?
I disbelieve in the very concept of “good arguments against net neutrality”. All the good arguments against the present proposal (and there are LOTS of those) center on a very well-founded distrust of the state’s ability and/or willingness to enforce such a rule in a manner which neither suppresses innovation nor involves itself in political disputes nor systematically favors large incumbent corporations with the money to hire lobbyists over small upstarts too busy building the future to spend their time glad-handing in DC, not an opposition to net neutrality in principle.
lelnet: I guess it does sound insane to give an organization (the Federal government) that spent $1+ billion on an apparently straightforward web site (healthcare.gov) regulatory responsibility over all Internet traffic in the U.S.
Network neutrality rules would be unnecessary if there were competition in broadband, but that is simply not the case in the U.S. today, in large part due to Powell era FCC rules favoring the incumbents.
The real remedy would be structural separation and unbundling, i.e. separating the business of last-mile access, which is a natural monopoly, from that of Internet transit, much as how local and long-distance telephony were separated after 1984. I’ll settle for the proposed network neutrality rules, which seem surprisingly robust given the FCC’s checkered past.
As for government incompetence, these are not rules where the government is telling ISPs what to do, but banning certain behaviors. It is closer to the Sherman antitrust laws than to any active executive branch program like the website you mention. Just because the government is ineffectual doesn’t mean you throw laws like those banning theft or fraud out of the window.
On this (pre-vote) date, how can anyone claim to support or oppose the proposed rules when no one (save the commissioners) knows what is in those rules? To paraphrase a famous quote from a powerful legislator: We have to pass it to find out what’s in it.
My approach may be perhaps too simplistic, and even sophomoric, but Comcast being against net neutrality almost automatically puts me in favor of it.
I reserve final judgment until we know the full rules (right now, there’s apparently a gag order on the details, until after the vote).
Public utility regulation is a 19th century approach for a 21st century problem. What public utility regulation does is freeze a technology in amber – you will continue getting the regulated service, but since only a regulated rate of return is available on it, all the innovation will either stop or go elsewhere, to some end run around the regulated service (although the new FCC rule also attempts to take wireless internet captive). Wireline phone service is great as far as it goes, but the dial telephone did not change from 1920 to 1965 – 45 years with zero technological advancement. Ma Bell was entitled to a 6% return on it existing capital and all additional investments had to be approved by the PUC and they weren’t anxious to approve many.
The US already has lousy broadband service compared to other countries. Prepare for us to fall further behind. When I travel to Asia now, I already feel more and more when I get back home as if I am returning to some 3rd world country with creaky trains and sadistic airport guards, etc.
Karl Denninger — occasional polemicist, but someone who did run a significant ISP, and knows what he’s talking about — weighed in a few months back with what I think is a colourable argument against net neutrality: http://market-ticker.org/akcs-www?post=229021
TL;DR: neither publishers nor consumers are _actually_ paying now for the kind of services — like all-you-can-drink HD video — that many want to consume. Someone has to pay, and he puts forth the reasonable proposition that it should be the people actually consuming it, rather than all internet users.
I support Net Neutrality, especially considering how antiquated we have become compared to other countries in our internet speeds/capacity. The US went from Top Dog to Goat within 10 years.
Under the current rules there is no incentive or competitive pressure for ISPs to increase the speed and capacity in their system. They maintain a fixed overall capacity and can make selective deals with streaming providers to apportion more of their “fixed” capacity to them at the expense of slowing other internet media. This can create top end monopolies between media services and ISPs. It will become “pay to play” and discourage small or new internet services from being able to compete. In the end, the consumer will be paying more to their streaming service for the cost of the extra bandwidth extorted, and their internet service will suffer on other sites, wherein some of these other internet sites will die prematurely, being perceived by the consumer as being too slow.
With Net Neutrality the individual ISPs will have to compete on their own merits, exclusive of their partnership with the streaming media providers, e.g. if Netflix on Comcast is slow, but Netflix on AT&T is fast, competitive pressure should force Comcast to increase their capacity or lose customers to AT&T.
This type of competitive pressure should force an overall increase in capacity, speed in the US market. Hopefully we can competitively force our ISPs to the performance level of the advanced Asian markets.
Back in the day, cable cos would take some portion of a cable channel’s equity in exchange for carriage on that cable system. That’s how John Malone amassed large stakes in cable channels like Discovery and Starz. Without net neutrality, the same thing would presumably be possible – a streaming movie channel would be able to get better access on some systems in exchange for equity. It’s conceivable that the dominance of firms like Netflix, Google, Amazon, etc can only be challenged by firms equally as powerful, like the cable cos. Think about the fact that Amazon singlehandedly dominates ecommerce and Google dominates search – where is the competition going to come from? A startup? Maybe, but the odds are far worse under net neutrality. The current internet is more like over the air television than it is like cable television. That’s why we see so little innovation at the top among the biggest internet companies, which are the equivalent of CBS and ABC.
The idea that cable companies are making obscene profits is refuted by the facts: Comcast return on equity is 16%, while the software companies that rely on the cable industry reap all the rewards without making any significant investment.
Read Aesop’s fable of the Horse and the Stag.
http://www.taleswithmorals.com/aesop-fable-the-horse-hunter-and-stag.htm