Pro-net neutrality types warn that if new FCC rules are inadequate, it will be the death of the Internet and free speech. Ignore the hyperbole.

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May 18, 2014

Blaise Alleyne/FlickrBlaise Alleyne/FlickrIn January, for the second time in recent years, a federal court told the Federal Communications Commission (FCC) that its net neutrality enforcement was illegal, sending the agency back to the drawing board. On May 15, the FCC proposed new rules, though these haven't yet been made public. But dozens of major news outlets have trying to read the tea leaves, with several pro-net neutrality writers warning that if the FCC's rules are inadequate it will be the death of the Internet and free speech.

Ignore the hyperbole. It’s nonsense.

Net neutrality is a complex subject to describe because there are so many flavors of it and neutral network practices, like beauty, are in the eye of the beholder. In essence, though, net neutrality rules move broadband providers from the lightly regulated status under which the Internet has flourished for years closer to common carrier status and reams of rules.

This unquestionably offends free market principles. The federal government should not control the development of the Internet. But consumer advocates pushing for strict net neutrality have convinced themselves, despite substantial evidence to the contrary, that regulators will get it right. The most vocal net neutrality activists demand rate regulation, forced sales of network infrastructure, and publicly-funded "competitors."

Internet-related industries are fast-moving and filled with firms experimenting with new business models in part because of benign neglect by regulators. Net neutrality would throw sand into the gears and change these dynamics.

No matter the industry, regulators demand that the regulated seek their permission before acting. And new business models represent a threat and an opportunity for local and national regulators. Exhibit A is new entrants like AirBnB, Uber, and 23andMe. Slow down, regulators say, we just want to kick the tires before you start delivering services.

In the FCC’s case, kicking the tires—whether well-meaning or not—frequently amounts to business-killing scrutiny. The primary cause of death is delay. Tech entrepreneurs, ISPs, and investors can’t tolerate the months-long to decades-long FCC approval process. Business plans and technology investments would get shelved while in regulatory limbo.

This problem is present in any regulated industry—transportation, energy, health care. Given the subjective nature of what "neutral" Internet traffic management looks like, however, and the fast-moving tech sector, the potential social damage of net neutrality is multiplied. FCC staff become tech philosophers, consuming forests of paper while contemplating unanswerable questions like, "Is Netflix part of the Internet?" "Which stimulates more broadband investment: better online services or more equal treatment of traffic?" "At what point is failure to upgrade broadband speeds equivalent to degrading broadband speeds?"

These are questions of metaphysics, not regulation. And this lengthy FCC navel-gazing is the best-case scenario.

Once FCC rules are made, delays pile up because modifying these rules requires not only regulator activity but public comment. That means that if an ISP or a tech firm try to launch a new service, their competitors and political enemies get to weigh in on whether the service is in the "public interest." The results are predictable and chilling. Several firms and business models have been deterred or crushed in this process in recent years: Northpoint, LightSquaredFree World Dial-Up, and ultrawideband. Countless others surely saw the carnage and never attempted to try.

And the problems don’t end there. Regulators do not humbly submit to their express responsibilities. As the decade-long net neutrality saga shows, agencies seek out adjacent markets to regulate.

The most fortunate near-miss is when, in the 1960s, the FCC almost regulated the upstart cable companies out of existence. As a former FCC commissioner put it, "the cable regulations were originally designed solely to protect ... [incumbent] broadcast stations." Since Congress hadn’t given the FCC express authority to regulate cable, the agency argued that many broadcasters would disappear if it didn't and the FCC would have little left to regulate.

The technologies change, but the agency overreach continues.

Regarding the relative merits of net neutrality, it’s difficult to improve on my colleague and tech scholar Adam Thierer’s words: "Living in constant fear of hypothetical worst-case scenarios—and premising public policy upon them—means that best-case scenarios will never come about." Some of the possible casualties of strict net neutrality rules—telephone competition, inexpensive television bundles—are foreseeable. But the more worrisome problem is that businesses—large and small—won’t risk the gauntlet, thus depriving us of the next fantastic service.

In the dynamic Internet-related industries, where creative destruction is greatest, firms should be able to experiment and develop freely, not require the government’s permission. Regulation should be a last resort and markets the default position. Net neutrality turns that principle on its head.

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  • Rich||#

    An open letter to the FCC

    [What] those arguing for "Net Neutrality" in the context of today's submissions are demanding is the ability to use government force to compel the subsidization of a private, for-profit business service. The FCC ... has the obligation under the Constitution's demand for Equal Protection as found in the 14th Amendment to reject such entreaties and expose them as a sham argument and blatantly improper attempt to force consumer subsidization of their businesses interests.

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  • Scruffy Nerfherder||#

    That's a different angle than I had considered before. Good stuff.

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  • x4rqcks3f||#

    Everything the government does could be argued against on those grounds, because everything the government does could be provided for by private, for-profit business. Defense, charity, healthcare, food inspection, everything.

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  • fuck you tulpa||#

    .

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  • Hawk Spitui||#

    Arguing the Constitution? How quaint!

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  • LynchPin1477||#

    After reading the comments at the re/code article, it seems to me that problems people are trying so solve with net neutrality would be solved much more effectively by ending the monopoly status many providers enjoy in certain markets. I'm not an expert on this issue by any means, but I'm surprised, given the culture of the internet, that more energy isn't being put into that approach.

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  • ||#

    You are 100% correct, and the problems NN is purportedly trying to solve are already being solved by innovation and competition (DirecTV, FIOS, etc), and will only improve. The mongoloids who push NN incessantly are usually driven by hatred of the ISPs like Comcast, who, while usually deserving of hatred, only have their monopolistic position by virtue of the government.

    The NN advocates are a combination of irretrievably stupid dipshits who just want free shit and hate Comcast, and control freak statists who just want to bring the internet under government control. Think about their solution: they want to end monopolistic ISP territories by bringing it all under the ultimate monopoly, the government.

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  • ||#

    It is not hard to find a Net Neutrality advocate who says regional ISP monopolies are a reason to advocate for Net Neutrality.

    Yet not one of them can say how Net Neutrality will fix regional monopolies.

    Net Neutrality has effectively flooded the space. Any mention of regional monopolies is effectively subverted into an argument for Net Neutrality.

    An example of this can be seen with the comments Stormy Dragon made a couple of days ago.

    Essentially Stormy hates Verizon but refuses to switch to Comcast cuz he hates Comcast. so then he advocates for Net Neutrality cuz it will hurt Comcast and justifies that hurting because of regional monopolies.

    It is a crazy circular argument but it is what it is. Any sane discussion about regional monopolies and reform of local franchise agreements is essentially shut down with crazy.

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  • SusanM||#

    Well, what's the realistic option? Both Verizon and Comcast offer pretty much the same service for the same prices - one may be slightly better than the other but there's no substantial difference.

    What would fix regional monopolies?

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  • Wasteland Wanderer||#

    Most of the monopolies are granted by the local governments, usually city governments. Simply push the city council to end the sanctioned monopoly. Seems pretty simple to me.

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  • LynchPin1477||#

    After reading the comments at the re/code article, it seems to me that problems people are trying so solve with net neutrality would be solved much more effectively by ending the monopoly status many providers enjoy in certain markets. I'm not an expert on this issue by any means, but I'm surprised, given the culture of the internet, that more energy isn't being put into that approach.

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  • ||#

    I dont understand the net neutrality issue. I do understand this: The left as it exists today is largely fascist. Fascists hate free speech. Fascists hate the free market. Fascists hate anything that empowers the individual. When I see that it is leftists pushing for net neutrality my answer is immediately " Fuck you. No.".

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  • Hawk Spitui||#

    The only "free" the left is interested in is "free lunch". Which is pretty much the goal of net neutrality.

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  • ||#

    I just assumed their goal was control of the net and the squashing of free speech. It really rankles some lefties I know that people like us are here saying whatever we please whenever we like.

    I would bet my last dollar that if they could kill the net entirely, or turn it into some kind of forum for propaganda only they would do it without hesitation.

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  • ||#

    Which is pretty much the goal of net neutrality.

    This is probably the goal of the useful idiots.

    But the goal of major players/politicians is control. Any new players can either be pushed out of the market in favor of established players or they can be filtered through Washington DC to be squeezed for bribes and political donations.

    Suthenboy has it right it is fascism disguised as consumer advocacy.

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  • ||#

    OT: A conversation I had with a lefty last friday about the nature of happiness.

    Me: I have six dogs and they are all happy but one.

    Her: Why isn't the one dog happy?

    Me: Oh, he is the male and he thinks he has to be in charge all the time. He just worries and frets all the time about what all the other dogs are up to. The others don't give a shit and they are obviously happy. Him, not so much. (I was trying to make a point to her about meddling lefties, not the dogs)

    Her: Why does it always have to be the male in charge?! Always the man. He just thinks he is in charge, but the females are really in charge! (Insert here a ten minute rant of the standard feminist whining )

    Me: *slowly takes out and lights cigarette while keeping eye contact*

    Never mind.

    *walks away*

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  • Acosmist||#

    The idea that feminism has any application to dogs, or that the behavior of dogs could in any way inform feminism, is straight-up crazy. In a different era, your friend would be confined to a mental institution based solely on that conversation.

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  • ||#

    You probably should not have mentioned the gender of the dogs.

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  • ||#

    The results are predictable and chilling. Several firms and business models have been deterred or crushed in this process in recent years: Northpoint, LightSquared, Free World Dial-Up, and ultrawideband. Countless others surely saw the carnage and never attempted to try.

    What is interesting is that some these offer direct competition to cable and DSL ISPs. Which are the go to for broadband right now.

    Right now Soule South Korea is rolling out 100Mbps Internet using cell phone networks and it is being done by private firms.

    The future competition that is financially feasible to go after the broadband markets in the US is regulated by the FCC and yet the service is not being rolled out. Funny how that works.

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