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Net Neutrality Regulation vs. Internet Freedom

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Adam de Angeli
Campaign For Liberty
Wednesday, Sept 30th, 2009

In a recent video interview, Congressman Ron Paul gave detailed answers to questions posed online by members of Reddit.com.  When asked to elaborate his position on network neutrality regulation, Paul responded that he did not know the details of the legislation, but that he was against regulation and this situation didn’t appear to be any different from those he was familiar with.

It was a great response in that it acknowledged the rightness of liberty as a universal principle that acts as a compass through challenging policy issues. Lesser principled politicians never even think of applying that sort of reasoning to an issue.  Unfortunately, it’s also not how most voters think about issues, and to persuade a skeptical audience, we need to understand the details of the issue and what is at stake.  Network neutrality regulation is more than just another pesky law; it is a floodgate to government control of the Internet and the reduction of consumer choices.

HR 3458, the misleadingly-named Internet Freedom Preservation Act of 2009, is the bill’s third attempt at major Internet regulation. But while the Internet Freedom Preservation Act in the previous Congress had no teeth—it only mandated a set of meetings and discussions on the subject—the Internet Freedom Preservation Act of 2009 has fangs. It compels the bureaucracy to do whatever is necessary to enforce network neutrality.  “What is necessary” will be the licensing of ISPs by the unconstitutional Federal Communications Commission (FCC).*  It will be no easier to provide Internet service than to create a cable television channel, or open a gun store, without the government watching your every move. The potential for abuse of power and restriction of free speech is truly dangerous, and far more so than can be easily inferred from the bill’s text.

Before we examine these issues, let’s first dissect the canards being put forth in support of this dangerous legislation.

The ISP cartel Bogeyman

Network neutrality regulation (never omit “regulation,” unless you want the term to sound positive) claims to solve a problem that does not exist: that Internet service providers (“ISPs”) and content providers (websites) will control the user experience by restricting what websites people will watch.  The website savetheinternet.com, which lobbies for network neutrality regulation, contends that without regulation, the Internet will become like cable television: that ISPs will decide what websites will be available to you, like “channels” on television. 

With nothing stopping them from doing that today, why haven’t any ISPs done any such thing? For the very obvious reason that they have no interest in doing so. Cable companies want to provide more channels for their customers; they don’t because TV stations are so expensive to set up and license. The Internet doesn’t have this problem; the wealth of content is freely available to those with a connection.  Internet service is a highly competitive industry and there are many different companies offering Internet service in any city.  Should an ISP suddenly block access to the websites people want to visit, they can count on their market share dropping off almost immediately.  Who would put up with a company restricting their own service?

In light of the free market conditions in Internet service, the threat of ISPs blocking service to their customers is patently absurd.  To make the illusion work, people are led to believe that there is no such free market. So, we are told there are only a small number of Internet service providers in a given area: the cable company, and the phone company.  It is a “duopoly,” they say. In fact, at least seven phone companies alone offer Internet service in my area: Comcast, SBC, TDS Metrocom, Sprint, Alltel, AT&T, and Verizon.  There are also specialty service providers.  These are by no means conditions for a monopoly or a cartel that could gouge customers or restrict access with impunity. One could argue that it is somehow possible for these companies to cartelize, but there are far better legal means for preventing cartels than putting the industry under government control. 

Reducing customer choices

It’s taken for granted by the network regulation gang that nobody might actually want a network that wasn’t neutral.  But consider this hypothetical example: I’m a high-tech medical research firm and for some reason we need to transfer a large body of data rapidly across the Web. If I approached Comcast offering a sum of money in exchange for a guaranteed transfer speed, what legitimate reason does the government have for outlawing this transaction? It is true that if Comcast accepted, the experience for their other users might be slower.  But those other users have the option to switch to a competitor, and Comcast has the option to reduce the price of their service to balance the sum they received from the research firm. Ordinary market forces match supply to demand. I pay an extra $20 per month to my ISP for a faster transfer speed than their “regular” plan. What’s wrong with tiered service? It works in every other industry.

Here’s another point to consider: Much of an ISPs’ bandwidth is devoted to illegal file-sharing activities by their customers.  If an ISP blocked access to file-sharing servers, it could afford to reduce its prices or increase transfer speed to law-abiding customers.  Comcast actually has tried slowing down BitTorrent transfers from only the worst pirates, and even that caused a PR nightmare for them.  But it would be possible for a company to market itself to customers by claiming the best rate for the highest speed because file-sharing servers were blocked.  And is it not their right to do so?

What if a content provider like Yahoo wanted to pay Comcast to allow customers to purchase Internet access for $5 per month that would only connect to Yahoo’s website? Someone with only $5 per month to spend on Web access might appreciate the possibility, and the new revenue for Comcast would allow them to improve their bandwidth. 

The more you think about it, the more non-neutral networks make sense. Some hi-speed Internet users only want the speed to make web pages load quickly, but don’t download many large files and use nearly their share of bandwidth. Why should they pay the same as the bandwidth hogs? Actualizing cost is a healthy thing.

ISPs also work with content providers as host companies. Often, ISPs will offer website hosting with a given bandwidth level per month to prevent busy websites from taking more than their share of service. But network neutrality laws may actually illegalize them from doing so, since “interfering” with a website (blocking it from taking more than its share of your bandwidth) could be considered “discrimination.”

Forbidding these Internet service options, however, are not the major threat posed by network neutrality regulation.  Networks today are largely neutral without regulation, so neutrality regulation would only force things to remain mostly as they are—another destructive regulation that will only benefit the largest Internet Service Providers (the same people the bill’s proponents claim to be protecting us from) but not a linchpin attack on our rights.  Or is it?

Government control

Commission Action- Not later than 90 days after the date of enactment of the Internet Freedom Preservation Act of 2009, the Commission shall promulgate rules to ensure that providers of Internet access service–

(1) fulfill the duties described in subsection (b);

(2) disclose meaningful information to consumers about a provider’s Internet access service in a clear, uniform, and conspicuous manner and in conformity with the duties described in subsection (e);

(3) generally, to the extent feasible, make available sufficient network capacity to users to enable the provision, availability, and use of an Internet access service to support lawful content, applications, and services that require high bandwidth communications to and from an end user; and

(4) not operate Internet access services in an anticompetitive, unreasonable, unfair, discriminatory, or deceptive manner.

It sounds so innocuous, doesn’t it? I didn’t read the words “give broad new powers to the Federal Communications Commission” anywhere in the bill, did you? Ah, but if they wrote bills to clearly inform the voters, they wouldn’t be able to pass so many anti-freedom laws without more opposition. But “the Commission” is indeed the FCC, and “promulgate rules” means “create and enforce regulations with no restraint.”

Through draconian regulations, the FCC has stifled free speech on radio and television.  Low-power FM stations that harm nobody are literally destroyed by FCC thugs if there is any possibility of them interfering with the big players (or if the proprietor didn’t purchase a license to exercise his free speech).  TV networks are fined if certain arbitrarily-selected vulgarities are spoken on the air. This is the fascist bureau that will be put in charge of the Web should network neutrality regulation pass.

The name of the game is licensing.  You will need a license to set up a server.  ISP start-ups will need to prove to the government’s satisfaction that their networks are neutral.  Taxes will needed to cover the cost of FCC expansion. 

Most important of all, once the FCC can revoke a license over network neutrality, the legal door is thrown open to revoke licenses for other reasons.  Suppose the government deems that your website “encourages terrorism” and threatens ISPs to either block access to your website or be shut down.  This is the situation in China.

Suppose the FCC decides that file-sharing is “discriminatory” and commands the ISPs to block BitTorrent websites (nothing Comcast would like more, I’m sure).  Even though the argument is plainly specious, that will not stop the FCC any sooner than the 2nd Amendment will reel in the ATF.  Remember, file-sharing is used in software piracy, but it’s used for legitimate reasons, too.  It is one thing for an ISP to block BitTorrent and live with market consequences, but quite another for the government to assume everyone sharing files is a criminal.

How will the FCC be able to know whether an ISP is complying with net neutrality regulations? They would have to look at their records—i.e., government now has means to see what websites the ISP’s customers (you) are visiting. 

This is the threat of net neutrality, people! To guard against phantom threats of ISPs conspiring to rob you of your Internet service, the government would massively expand FCC power, thus putting itself in effective control of the once-free Internet.  These efforts must not succeed! Write your Congressman today, urging them to oppose HR 3458, the misleadingly-named Internet Freedom Preservation Act if 2009. Tell them you are not fooled by the regulation gang’s bogeyman of the “evil” ISPs. The same ISPs brought us into the Information Age, which has led to a remarkable awakening in the public consciousness that we should be grateful for. HR 3458 will be the death of free speech on the Internet. And we cannot let that stand.

This article was posted: Wednesday, September 30, 2009 at 4:28 am

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