Commentary

FCC After Network Neutrality Again

Federal Communications Commission (FCC) Chairman Julius Genachowski in a speech yesterday proposed adding two “open Internet principles” to the FCC’s guidelines.

“The Internet is an extraordinary platform for innovation, job creation, investment, and
opportunity. It has unleashed the potential of entrepreneurs and enabled the launch and growth of small businesses across America,” said Chairman Genachowski. “It is vital that we safeguard
the free and open Internet.”

So the game is back on. Genashowski statements reflect the oft-expressed fears of various groups that internet service providers will slow down access to rival’s services, of black access to some content. Internet service companies have already weighed in with a lot of objections.

I’d point out:

a) it only has ever happened once, and it was quickly exposed and ended.

b) why on earth would customers put up with harmful slowdowns or content blocking when they have so many choices of internet service providers?

c) this would prevent all kinds of special internet services, like guaranteed speeds, or a service that offers only family-friendly content and blocks objectionable content, etc.

I could go on. It is a complex issue, explored in great detail by Reason’s Steve Titch in this report. As he points out, the real solution to any possible problems with internet service providers hurting customers by monkeying with their access is competition and choice for consumers, not more micromanaging regulations.

In this column Steve explains why network neutrality is really network mediocrity and that:

Any corporation or individual on the Internet (or anywhere for that matter) has a right to choose what components to make available to whom and on what terms. In commercial language, it translates to the freedom to place a market value on one’s proprietary assets to create viable business plans. That has been the case since the first Internet service provider purchased a rack of servers and started seeking customers for hosted email.

Rather than preserving basic Internet principles, network neutrality subverts them. It replaces cooperation with coercion. It would make government bureaucrats the arbiters of the way two or more companies could agree to use their own network resources to deliver consumers the best experience when it comes to content and applications.

And Reason’s Nick Gilespie has pointed out the obvious way people would react to the problem network neutrality purports to solve.

Let’s assume that the worst fear of a fast-loading foxnews.com page comes true, even for those of us who prefer other, even more fair-and-balanced, less-comical news sources such as, say, The Onion. What are you likely to do in such a situation? At the very least, you’ll bitch and moan to your provider, which is known to have some beneficial effects, even with near-monopolists. Remember what happened to the biggest ISP of them all, AOL, during its rise to dominance a decade or more ago? Originally a closed system, it had to allow its users to e-mail with non-AOL customers, then it had to allow its customers full access to the Internet, then it had to go to flat-rate pricing, then it had to woo subscribers with ever-increasing free hours, giveaways, and the like. AOL still regularly upgrades its system and its services not because it wants to, but because it has to.

Such capitulations to customers are the rule and not the exception among market leaders, whether you’re talking about cyberspace or fast food.

and

In any case, it’s worth remembering that the Net — most obviously in the form of the World Wide Web — has in large part become a mass phenomenon not in spite of but because of the profit motive. That’s easy to forget in a world in which faster and cheaper broadband, user-friendly interfaces, and e-commerce are no longer considered exotic or risky.

You don’t have to believe that the cable companies and telecoms are kind-hearted altruists to realize they are desperate to get an edge on their competitors. That very desperation is likely to drive innovation that will benefit end users especially. Allowing builders of Internet infrastructure to recoup their investment by charging the Googles and Amazons for use of their network would balance the incentives for innovation more closely. Ironically, a non-neutral net would accelerate the spread of zippy broadband that can deliver movies, allowing hobbyists with camcorders to take on Hollywood studios. The neutrality advocates who criticize corporatized cable TV should welcome that.

Steve has summed it up well:

“Net Neutrality would open the door to unprecedented government intervention in all aspects of the Internet. Placing regulations and legal limits on the Internet won’t bring neutrality, it will stagnate the Web’s remarkable growth. The Internet has been doing splendidly without government, why on earth would we want them involved now?”

Adrian Moore

Adrian Moore, Ph.D., is vice president of policy at Reason Foundation, a non-profit think tank advancing free minds and free markets. Moore leads Reason's policy implementation efforts and conducts his own research on topics such as privatization, government and regulatory reform, air quality, transportation and urban growth, prisons and utilities.

Moore, who has testified before Congress on several occasions, regularly advises federal, state and local officials on ways to streamline government and reduce costs.

In 2008 and 2009, Moore served on Congress' National Surface Transportation Infrastructure Financing Commission. The commission offered "specific recommendations for increasing investment in transportation infrastructure while at the same time moving the Federal Government away from reliance on motor fuel taxes toward more direct fees charged to transportation infrastructure users." Since 2009 he has served on California's Public Infrastructure Advisory Commission.

Mr. Moore is co-author of the book Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry said, "Speaking from our experiences in Texas, Sam Staley and Adrian Moore get it right in Mobility First." World Bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

Moore is also co-author of Curb Rights: A Foundation for Free Enterprise in Urban Transit, published in 1997 by the Brookings Institution Press, as well as dozens of policy studies. His work has been published in the Wall Street Journal, Los Angeles Times, Boston Globe, Houston Chronicle, Atlanta Journal-Constitution, Orange County Register, as well as in, Public Policy and Management, Transportation Research Part A, Urban Affairs Review, Economic Affairs, and numerous other publications.

In 2002, Moore was awarded a World Outsourcing Achievement Award by PricewaterhouseCoopers and Michael F. Corbett & Associates Ltd. for his work showing governments how to use public-private partnerships and the private sector to save taxpayer money and improve the efficiency of their agencies.

Prior to joining Reason, Moore served 10 years in the Army on active duty and reserves. As an noncommissioned officer he was accepted to Officers Candidate School and commissioned as an Infantry officer. He served in posts in the United States and Germany and left the military as a Captain after commanding a Heavy Material Supply company.

Mr. Moore earned a Ph.D. in Economics from the University of California, Irvine. He holds a Master's in Economics from the University of California, Irvine and a Master's in History from California State University, Chico.