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Net Neutrality: regulations looking for a problem that doesn't exist

[crossposted from my fledgling weekly live call-in show at PeterKay.Com]


I've been loosely following the Net Neutrality (NN) issue for some time now and when I first heard about the general concept (which was that ISPs cannot discriminate IP traffic, i.e. packets are packets regardless of their payload) I was in favor of it. However, as I "matured" and learned more about the general ideas of free markets and government regulation, I grew increasingly against Net Neutrality (NN).

The recent FCC actions to regulate the Internet have driven me to come out AGAINST Net Neutrality. I'm not sure how much interest there is so I'll start with only a few bullets outlining my position and if this heats up I'll continue the dialog. Here's why I'm against it:

  • What's the problem? NN is a regulation looking for a problem that currently does not exist.
  • FCC's authority is dubious. FCC legitimized its oversight of the Internet by classifying it as a "telecommunications" infrastructure thereby falling under its regulatory authority over telecom carriers, something that goes back to the '30s.
  • Where's the track record? Show me a single industry that has thrived and innovated at more efficient levels after they have become regulated: you can't. I read through Woz's bizarre post to "Keep the Internet Free"; he laments about the past where the telecommunication regulation made it illegal for you to own your own phone instrument (if you were alive in the '60s, you'll note that the phone company charged you extra to have multiple working outlets in your home). So what does Woz ask for? Government regulation!
  • No more camel noses! There is no doubt in my mind that the FCC's regulation of the Internet is just the start. More regulations will inevitably come down the road, many of them fraught with political gamesmanship.

That's it for now. I await your responses. I also recorded a CinchCast for more of a stream-of-consciousness audio post for those that want to hear it instead of read it


update: this article from the Wall Street Journal echoes my opinion and has some of what feel is disturbing background.

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Comment by Kevin Luttrell on January 28, 2011 at 5:15pm
Like the Internet, the content of discussion boards cannot be controlled and categorized based on the opinions of the providers. All topics are on topic as long as people are willing to discuss them in an open forum. There are no time limits (like a pay phone) or corporate sponsor to worry about pleasing. Thankfully. Lets keep it that way.
Comment by Peter Kay on January 28, 2011 at 2:37pm
Brian I only wish we could actually stay on topic. I'm not the one bringing in all kinds of other issues. If folks would stick with the topic at hand, I would too. The FCC couldn't produce a single case of the abuse they're "protecting" us against. Perhaps I should just ignore the strawman responses but I'm having just too much fun.
Comment by Brian on January 28, 2011 at 2:33pm

I guess that's why Greenspan & Levitt (who along with Rubin vigorously opposed the CFTC's efforts to look into the derivatives market in the mid 90s during Clinton) have since publicly gone on record that they were wrong (or at least in Greenspan's case - partially wrong - personally I feel he's just too stubborn over the whole thing and can't accept the magnitude of failure, but that's my personal opinion).


Certainly the issue of privatized payoffs and socialized risk is one which has contributed to such behaviour, but it does not support your analogy of drunk driving off a cliff.


Aside, skimming back you seem quite fond of labelling responses as strawman arguments. Are you attempting to win your position argumentum ad nauseam? Perhaps it is the undeveloped nature of your thesis which makes our retorts seem misdirected.

Comment by Peter Kay on January 24, 2011 at 11:00pm

BTW the underlying fundamentals which enabled the financial crash to occur was an inherent government promise (i.e. regulation) to bail out financial institutions coupled with government regulations forcing banks to take risky loans.  If government promised to socialize your risk (i.e. minimize your losses) while allowing you to privatize (i.e. maximize) your gain while forcing you to take bigger risks (i.e. bringing greater returns), what would you do?


The same thing everyone else did: make as many loans as you possibly can and securitize them as fast as possible.


Blaming Greenspan's deregulation for the housing collapse is like drunk driving off a cliff and blaming bad brakes for the crash.  

Comment by Peter Kay on January 24, 2011 at 10:55pm

I see the straw man arguments one is advocating "blind" belief in the market, i.e. anarchy. Regulations which strengthen competition and maintain free market forces welcomed (e.g. unfair competition or coercion) and most of these laws are already in place.  It's not as if the Internet rides alone in lawless territory.  


And while it's fine to "prepare" for risks, if it ain't broke don't fix it;  the FCC has been unable to produce a single legitimate problem that it's regulations are designed to "solve".  Even the Netflix/Comcast case was settled out of court, on it's own.

Comment by Brian on January 24, 2011 at 9:43am

Government encouraging genuine market forces?


Hope that works out better than Greenspan's financial experiments on financial deregulation which have essentially destroyed our economy (not to mention his legacy). It's easy to be against regulation when things are going well, but latent risks have an unfortunate tendency to be underestimated (or perhaps misunderestimated if you prefer ;) ).


The "wild and free" period of the Internet, while not over, is certainly entering its twilight years. More and more infrastructure (both technical and content-wise) is being consolidated.


I think many are missing the point. It's not strictly about whether market forces or monopoly should prevail - the overriding objective is not strictly efficiency.


Net neutrality issues are in this way far more akin to water rights or interstate commerce issues. In order for networks to be truly pervasive as a medium be it for work or play - then access/transit rights are critical.


Certainly there are some technical details that need to be addressed (QoS for VoIP, transit issues for assymmetric bandwidth consumers like Netflix). There are other places where dull analogies to roads breakdown.


Many of these can already be addressed through existing market forces, and I do not believe a heavy hand is warranted. However to believe blindly in the market due to lack of widespread precedent is just as foolish as to look to government for all solutions.


Just because something bad hasn't happened yet, doesn't mean you don't prepare for such reasonable risks.

Comment by Peter Kay on January 16, 2011 at 11:29pm

You're all invited to participate on my Net Talk Radio Show this Tuesday 9pm HST. Dan Leuck will be my guest and depending on where things go (and who might call in), we can get into Net Neutrality.  Otherwise we'll have a fun talk about where the tech industry is going in Hawaii especially in a post-221 era.  

Go to this link to the Peter Kay Show and "tune in" 9pm Tuesday.  

Comment by Peter Kay on January 16, 2011 at 9:40pm

@kevin you raise a straw man.  I've never stated anything that you attribute to my views on regulation. Government clearly serves a vital role in any modern society and repeatedly stated I'm in favor of regulations which encourage genuine market forces. 

Comment by Daniel Leuck on January 15, 2011 at 12:14pm
@David - Thank you for the Economist link. Its funny how a 170 year old paper created to plead for the repeal of corn import tariffs remains one of the best sources of intelligent insight on topics such as net neutrality. @Kevin - I agree. I'm a small government guy but there is definitely a place for government. You point out two good examples - preventing monopolies from stifling competition and companies from doing things that cause rivers to catch on fire :-)
Comment by Kevin Luttrell on January 15, 2011 at 9:48am

@ Peter.   It's true that corporate interests have hijacked governmental agencies. I'm still not following the logic that all regulations are, by definition, bad. Anti trust regulations are specifically designed to encourage competition. The problem is that these things are too weak to be taken seriously by the opposition and full of loopholes, like the NN act. Yet, we talk about regulations as if they are a monolithic entity designed to beat the little guy down. I think we can agree to disagree on that point.


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