LPMN Weekly Message – The speed-trap of Net Neutrality

LPMN.org:

Love your internet? Don’t we all. But it might be about to change. We consider what’s made the freewheeling internet such a success and shine some light on what “net neutrality” means. Few understand it; isn’t “neutrality” a good thing? Well, here’s a hint: the government is about to get involved.

After a post-election hiatus, LPMN Weekly Message is back! We will continue to explore critical issues from a libertarian perspective.

The internet revolution!

Weekly Message 7a - Internet

Love your internet? Let’s keep it that way.

The internet has dramatically changed our lives.

Many early users remember it as a way for themselves, as students, to connect their personal computers (PCs) to their university’s mainframe computer, dialing-in over existing telephone lines to submit assignments or to execute programs. Some large companies, scientific organizations, and government agencies such as the military used it to transmit data between each other. Use of this early system required specialized knowledge of DOS and other text-based languages, both to use PCs and to connect remotely to other systems.

The development of graphic-based software by Apple and through Microsoft’s Windows platform, made PCs and remote systems more friendly to the average person. No longer did one need to be a techno-whiz or a skilled programmer to use a computer. Email and basic website pages were the first modern features of the internet to arise, allowing ordinary people to efficiently interact with each other electronically. More recently, the ability to publicize electronic photographs, and then audio and video recordings, significantly enhanced the internet experience.

The modern internet essentially debuted in the mid-1990s. Thousands of people since then have developed the software that makes it possible for us to check our email, read the news, reach out to old classmates via social media, purchase products without leaving our homes, translate languages, get stock quotes, perform online banking, pull up a map and get directions, search any topic using search engines, quickly research those topics further with online resources like Wikipedia, investigate political viewpoints other than those served up by the old-line media, and uncountable other features that power our experience online today.

It was no coincidence that it was accompanied by the personal computing revolution. Until the 1980s, only governments and large institutions had access to data-crunching power using tremendously expensive room-sized mainframe computers. The computing revolution expanded access to the ordinary individual. Mainframe computers were supplanted by the development of desktop PCs, and now portable laptop computers. Monochrome monitors were supplanted by color displays, then by thin-screen technology, and now by high-definition. For data storage, large reel-to-reel tape drives were made obsolete by portable magnetic floppy disks, then by optical discs, and now by solid-state flash drive technology.

The internet is the convergence of all of these hardware and software innovations, and more.

The revolution is continuing and accelerating

Today, the internet is not only something we access from home or work, it’s something we can use on a moment’s notice. The advent of cellphones, touchscreens, and wireless technology have put the internet literally in our hands, something to take with us wherever we go.

The expansion of the internet to mobile devices has triggered yet another burst of creative energy. Entrepreneurs, often tiny firms or even students just graduated from college, are now creating apps that can be downloaded to perform useful functions that consumers hadn’t even thought about, including these popular apps for Apple’s iPhone.

The internet — a complex, dynamic, de-centralized system of software and hardware — may be the most revolutionary innovation of our lifetime. It might be the biggest leap forward since Gutenberg’s printing press made published information available to ordinary people for the first time in 1460, contributing to the Renaissance.

A stunning libertarian success story

Like the printing press, the internet has democratized information and communications, removing exclusive control from large corporations and governments, and making the world available to individual people almost regardless of their socioeconomic status. Not only has functionality has increased across-the-board, so has access. A high-speed DSL connection is thousands of times faster than an early dial-up connection and also less expensive, both in nominal and inflation-adjusted terms.

This dramatic increase in functionality and decrease in cost mirrors that of the personal computer industry. In 1981, IBM introduced its first desktop PC with a monochrome monitor and no hard drive for $1565 ($4000 in today’s dollars); competitive machines such as the Apple IIc were priced at $1300 in 1984 ($2900 today). But today, a portable laptop computer thousands of times faster and with a multitude of features can be purchased by even low-income people for just $200!

This is how libertarianism works. We call it a genuinely free and open marketplace.

Expanding features. Dramatically decreasing costs. Increasing availability to all. Why did the internet and computing become such a vibrant, dynamic sector? One big reason: the government stayed out of it.

Other than its traditional role of enforcing contracts between companies and prosecuting occasional acts of fraud, the federal government has had almost no involvement. This includes the URL system of establishing internet addresses, which is conducted by the Internet Engineering Task Force, a voluntary organization. It also includes standardization. In software, standardization was promoted by companies such as Adobe, with its portable document format (PDF) which allows documents to display the same way regardless of the underlying software platform, and in hardware by formats such as USB, developed by a consortium of companies to promote interconnectivity of computers, printers, digital cameras, cellphones, and many other devices. No government agency was needed to coerce standardization; it was done voluntarily by organizations in the marketplace.

More importantly, the government has not attempted to pick winners and losers by subsidizing some companies and penalizing others, nor tried to mandate or restrict data transmission speeds, methods, and formats. Until now.

This background is important to understand before delving into today’s topic: Net Neutrality.

The players who make up the internet

In a nutshell, the Net Neutrality debate is a conflict between two groups of companies and organizations which comprise the internet:

– Content providers. A tremendous variety of companies, organizations, and individuals provide the “content” that consumers find desirable and useful. This includes email services, news websites, social media, online movie services, search engines, and many others. It also includes website hosting services which provide webpages to each organization or company. But that content needs to be delivered to consumers, and that requires the work of ISPs.

– Internet service providers (ISPs). These are the companies which provide the operational backbone of the internet, such as Verizon, Comcast, and others. They maintain the servers, switching stations, routers, as well as overhead software which allows individual consumers to access the material from the content providers. In many cases, ISPs also own the large-scale physical infrastructure such as telephone lines and cellphone towers.

Content providers and ISPs contract with each other on the terms and prices of their agreements so that they can work together to serve individual consumers. Wanting to upgrade your broadband package? You may want to use this broadband comparison tool to help you find the best deals for your area and price range.

Why the Net Neutrality debate

A recent internet innovation has been video streaming, which has become very popular with consumers. Video transmission by Netflix and YouTube now comprises more than half of all internet traffic. The high volumes of data required by video creates special burdens upon the ISPs, including the need to expand expensive physical infrastructure.

This is leading to the evolution of a tiered system. ISPs such as Verizon Communications want to charge higher rates to heavy-volume users like Netflix in order to transmit video at guaranteed speeds, and the additional revenue would fund their expansion of physical facilities. Light-volume users such as email and search engines would remain at standard rates, but lower speeds.

Naturally, Netflix doesn’t want to pay more. They are calling for the Federal Communications Commission (FCC) to intervene and prohibit the ISPs from charging them higher rates than others pay. Other content providers are supporting this call for federal intervention, concerned that their content could be sidelined into a “slow lane”.

This excellent video provides a 3-minute summary of the Net Neutrality debate. It’s well worth watching!

Intentional deception and coercive force

In essence, Facebook, Google, Microsoft, and others are attempting to use the FCC to force the ISPs into giving them better service for “free”. Should the FCC enact the Net Neutrality proposal, one of two things will happen:

– Reduction in quality. Without the additional revenue to pay for additional infrastructure, it will be built more slowly or perhaps not at all. A one-second delay may not be noticeable to a person checking their email or pulling up a news website. But occasional one-second delays will be very noticeable to those streaming Netflix movies, when the data transmission falls behind the pace of the movie.

– Increase in prices. Should the ISPs build out their infrastructure anyway, they will have to build more than needed to provide additional “unnecessary” bandwidth for the light-volume traffic as well as the heavy-volume. And there will indeed be one tier of cost: the higher one. Of course, all costs are ultimately passed down to individual consumers. The cost of connecting to the internet has fallen for the last 20 years, making it affordable and accessible to nearly everyone, even low-income people. That decline will reverse, and consumers will begin seeing higher prices as a result of the government’s intervention.

Others are chiming in, including browser Mozilla, calling on the public to help them lobby for Net Neutrality on this page. Even the normally pro-liberty ACLU has been fooled into endorsing the anti-liberty side.

A key problem is that Net Neutrality proponents have commandeered the language of liberty, deceiving the public into believing that the government must intervene in order to maintain a “free and open web”. This is nonsense. Freedom is maintained by keeping the politicians and bureaucrats out. This is not a free speech issue; no content would be censored or blocked. Instead, this is about whether marketplace participants should be allowed to voluntarily choose for themselves how, with whom, and under what terms to do business … or whether the federal government should interfere as an outside party and begin creating mandates, restrictions, and approval processes. This is about keeping the internet in the realm of consumer service rather than political policy, as the solidly libertarian Mises Institute points out in this excellent article.

It’s worth noting that Facebook is a hypocrite on this issue. Facebook does not display all posts in the News Feeds of its users. Instead, an organization must “boost” a post, for a fee, in order for it to be seen by more people. Visibility of paid posts far exceeds that of free posts, even among those who are fans of an organization’s page. However, Facebook is calling on the FCC to bully ISPs into prohibiting the very same business practice it uses itself!

Opening the door to bureaucracy

Weekly Message 7b - FCC new regulations

FCC Commissioner Ajit Pai holds a 332-page book of Internet mandates, restrictions, directives, and taxes proposed by the Obama Administration.

Action by the FCC will open the door to further intervention. We may already be seeing this with the Obama Administration’s volume of proposed government regulations for the internet (see the photo).

The FCC has tried to enact Net Neutrality before, but that attempt was struck down in the case of Verizon Communications v. FCC in January 2014. The court ruled that the FCC couldn’t act because it had classified the internet under Title I of the Communications Act of 1934 rather than the more restrictive Title II … leaving it to the FCC to simply reclassify it themselves. That’s what they’re now considering. Title II would turn Internet Service Providers into common carriers.

For a hint of what that means, consider Senator Al Franken, an outspoken Net Neutrality supporter, who wants the internet reclassified as a utility. This is foolishness. Utilities are considered “regulated monopolies”. A utility like Xcel Energy (electricity) or CenterPoint Energy (natural gas) needs only to submit their proposed price increases to an unelected governmental Public Utilities Commission; those requests happen frequently and are usually approved. In exchange, the government allows the company to hold monopoly control over its territory. Little innovation happens with utilities, since consumers are not allowed to switch to a competitor. Not only are monopolies the wrong direction for the internet, but the government should release its control over existing utilities by allowing competition and more consumer choice. This certainly includes cable companies, in areas they may operate as monopolies where consumers don’t have a choice to switch elsewhere.

What you can do

The FCC votes on whether to enact Net Neutrality on Thursday, February 26. You may submit comments as a public filing here (it’s Proceeding# 14-28). You may also contact the FCC Commissioners by email here. Please ask them to keep the federal government out of the internet by voting NO on so-called Net Neutrality.

Since the FCC had already tried to act on this, and a natural inclination to restrict and control is why most Commissioners took the job, they are likely to approve the proposal. Only an outpouring of opposition might sway them. On the bright side, Commissioner Ajit Pai appears to be a skeptic and notes that many Americans are opposing federal interference with the Internet, in this statement on the FCC’s site.

This debate will undoubtedly continue regardless of the FCC’s decision, so you may contact your federal representatives here.

A healthy market isn’t like a factory that can be centrally planned. It’s more like a rainforest that evolves. Our vibrant, dynamic internet should be instructive to everyone on how and why a genuinely free and open marketplace works best, and to the benefit of us all.

For Liberty,

S.L. Malleck
LPMN Vice Chair

Concerned about the expansion of government control and the erosion of individual liberty? Please consider joining and becoming active with the Libertarian Party of Minnesota. Libertarians support liberty on all issues, all the time! Libertarianism is a philosophical and political movement to promote personal freedom, strong civil liberties, a genuinely free marketplace, and peace.

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2 thoughts on “LPMN Weekly Message – The speed-trap of Net Neutrality

  1. Rob Banks

    I don’t know what the best answer might be, but I seriously doubt government could do anything but make things worse.

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