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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 Peter Kay on January 14, 2011 at 1:56pm

We are all in total agreement that more competition is necessary.  The reality is, however, that government regulations rarely create more competition. The usual pattern is that regulatory agencies are typically staffed or heavily influenced by large organizations who end up carving out protected markets.  Witness David's recollection of the '96 Telecom Act getting thwarted by Telcos & Cablecos.


As I've repeated stated: if NN created market conditions which encourage more competition, I'd be all over it. The sad truth is that it does nothing of the sort.

Comment by Kevin Luttrell on January 14, 2011 at 8:43am
@ David. Agreed. That was the point of my long winded original post.
Comment by David Lassner on January 14, 2011 at 7:55am

Ok, I can't resist.  The closing paragraph on the analysis of the proposed NN rules from the Economist makes the point I tried to convey much more clearly:

"These details are important, but the noise about them only makes the omission more startling: the failure in America to tackle the underlying lack of competition in the provision of internet access. In other rich countries it would not matter if some operators blocked some sites: consumers could switch to a rival provider. That is because the big telecoms firms with wires into people’s homes have to offer access to their networks on a wholesale basis, ensuring vigorous competition between dozens of providers, with lower prices and faster connections than are available in America. Getting America’s phone and cable companies to open up their networks to others would be a lot harder for politicians than prattling on about neutrality; but it would do far more to open up the net."

Full analysis at:


Among other tidbits, they consider the rules "mostly sensible," note that both sides being unhappy with the rules is probably a good sign, and they describe the U.S. as "the developed country with the least competitive market in internet access."


Comment by Kevin Luttrell on January 10, 2011 at 8:17pm

I read the piece in the WSJ but I didn't see the iron clad compelling argument. I did, however, read a rhetorical interpretation based on an opinion that the FCC is bad because the Obama admistration is apparently bad. No surprise that there might be bias in the opinion since it is, after all, an opinion piece. I've written a few myself and pitched several that local papers took up as their own when I was in Public Relations.

Is an opinion piece in a pro business newspaper, owned and run by Rupert Murdoch of News Corp (yes, Fox News) now a sufficient source used as evidence to support a position where a Governmental agency is involved?

This is starting to slip into that Orwellian debate category I said wasn't Germain to my post.

The actual case law  and precedent would be interesting and credible though.

Comment by Barry Weinman on January 10, 2011 at 1:05pm
Folks.... I agree with Peter. While government loves to fix things that aren't broken, they can create uncertainty and confusion which is what they are best at.  The FCC is one of the most political organizations and the party in power names 3 members and the other party gets 2 members. As the political world changes the FCC changes its policy's. Not the best way to make policy.
Comment by Peter Kay on January 9, 2011 at 8:50pm

Kevin, there is zero evidence that existing laws are insufficient to address problems. According to this WSJ op-ed on the regulations (hat tip to @danLeuck), the FCC can't produce a single claim where ISP "bad behavior" wasn't settled amicably using existing law.


So like I said on the first post, NN is a solution looking for a problem that doesn't exist.

Comment by Kevin Luttrell on January 9, 2011 at 8:30am

I don't want to get into an Orwellian debate on the role of government in our lives, however I often wonder why I pay so much for basic cable, more for HBO, and still have to sit through commercials or watch petty squabbles over money between cable providers and the consolidated media giants that run the stations with content play out on my TV where holding content hostage is the tool to drive up cable fees. 


I pay for the privialge of getting cable, why be subjected to advertising as well? I can almost hear the ad sales department at Comcast argue: "More money more money more money."


Other people feel the same way. So they shut off their TV and  turn to Hulu or Youtube or NetFlix or whatever site on the Internet that streams the content they want. Yes fees are paid. But $15 a month for a Netflix subscription and no commercials versus $80 a month for cable and no control over content and airspace filled with commercials...the math seems pretty simple.

But that means the cable industry has competition. Solution... Buy the competition and convert those holdings into business units then charge consumers to regain market share and increase the balance sheet.


Personally, I don't want to the free flow of content or information on the Internet become another bargaining chip or line item on an advertising rate card to increase the stock price of Vivendi or Comcast. Those that can afford to pay will have access to online content and be perfectly happy with this. Those that can't afford to pay will be out of luck. You can't afford to see your favorite website because it's considered a top tier? Too bad. You gotta pay to play.


Perhaps this isn't the place for government intervention. But left unchecked, this seems to be how the Internet access scenario plays out over time based on the precedent set by how these same companies manage their cable business.


BTW.. this anti government regulation stuff is painted with too big a brush. Once upon a time the Ohio River caught fire because of the chemicals dumped into it. Once upon a time people with mental illness were sent to insane asylums and lobotomized or left to suffer alone. In both cases government regulations were enacted to curb such practices.  These examples of good regulations.

Comment by Daniel Leuck on January 8, 2011 at 5:32pm
@David How clear is the case law on this point? Is legislation required to disambiguate?
Comment by David F. Day on January 8, 2011 at 4:42pm

This is a nasty, slippery slope here.

Deservedly so, I think we can expect Congress to bash the FCC really hard on this issue. Most of us depend upon the internet to one degree or another for our businesses. Any government regulation will undoubtedly (as it always does) damage access, performance and add to the cost for small business boys and girls. The potential for "political correctness" influence (i.e. censorship) is also something that I do not want to see. This is the ugly First Amendment issue that the FCC has stepped into.


There is one other aspect of this issue that is particularly troubling to me. The Courts have already ruled that the internet is to be kept free and that the FCC cannot regulate it. As a lawyer, I am offended by actions of a Federal Agency that are illegal and they know this. Period.

Comment by Daniel Leuck on January 7, 2011 at 3:32pm
@Peter and @Barry - I think you will find this interesting:
On the eve of Christmas Eve, while you probably weren't paying attention, the Obama Administration released the text of its new Internet regulations, which mark a significant pivot from the hands-off approach to the Web observed by previous Republican and Democratic Administrations. Full Article on the Wall Street Journal


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