December 16, 2017 – Net Neutrality

Apologies for the long post.  This is a collaboration between us on a fairly complicated story  Yes, we have an opinion. Since so many people have been asking me (and my other geek author I’m sure) what Net Neutrality really means, let me share our point of view.

Yesterday, FCC Chairman Ajit Pai announced the repeal net neutrality, a policy that went into effect in April of 2015. The internet didn’t stop, and Netflix and online prices didn’t immediately triple.  One of the crazier claims by those supporting Net Neutrality was repealing it would lead to more monopolies. This couldn’t be further from the truth. Ironically enough, one of the top issues people take with net neutrality is that people will now be able to pay for faster internet. I want faster internet, really fast internet. And I’m willing to pay for it. Imagine if all cars had governors on them so no car go could any faster than another car – that was Net Neutrality. Great for the guy who loves driving 55, not so much for some of us.

Back to the monopoly argument. The chicken little’s I’ve read claim that ending net neutrality will lead to more monopolies and corruption. But the truth of the matter is that net neutrality has caused increased monopolization and corruption. What net neutrality ultimately did was undermine the market allocation of goods by allowing the State to determine how the internet is managed – that worked really well for the Soviet Union.  Remember all the great products produced under Soviet Communism? No?  Neither do I.

It seems that advocates of net neutrality beg for a monopoly: the State. People that want the government to hijack the market for ISPs are just begging for the government to monopolize it either through the State, or through the State’s selected winner. This is where we get to corruption. If you have regulation, you have regulatory capture. I, as a big businessman, see that the government wants to regulate me, so I buy them off. It happens all the time. It happens more often than not, think Detroit.

Even if regulatory capture were to disappear miraculously, the regulations wouldn’t hurt big ISPs nearly as much as they would hurt small ones. Big businesses have a greater capacity to afford the costs of regulations than small businesses. It doesn’t take a PhD in economics to realize that having more money makes you more able to afford expenses, so why don’t people see this with regulation. The regulators will merely put small competitors out of business. Net Neutrality only stifles competition, and thus decreases quality of service and increases prices. We have seen this in the telecommunication industry before with the breakup of Ma Bell. 

It used to be that the phone company owned the lines and all the equipment in your house and it was all controlled by the myriad of regional Bell Telephone companies and the pricing and service was a monopoly. You either had a phone or you didn’t. When the government broke up the companies, we slowly started to see competition and change. The first big change was that you could (actually had to) buy and own your own phone. This alone jump-started the industry and opened the door for the cell phone manufacturing we have today.  By ending the artificial restrictions on the net under net neutrality we let the market dictate, which grows the economy. 

Now that Net Neutrality is on the way out, competition will finally reemerge and we can start to see even more progress in the digital sector. What the end of Net Neutrality does is lower the cost of entry into the industries of the internet. With this new deregulation, the young and entrepreneurial have a chance at making a better digital world for all of us. Net Neutrality was anything but neutral. Rather, it put people with new ideas at a disadvantage, all but forcing them to join the big corporations when they would be better off competing against the giants.

What if I want to just buy internet service that allows me to check my email and write articles, why should the government stop a producer from meeting that demand? What if someone wants a super fast internet speed (like me)? Why should the government stop this me from paying more for faster speeds? There is no reason. If there’s a demand, the market can handle such a situation much more effectively than Uncle Sam.

Think of it this way.  Look at the cable packages out there today.  We already have tiers of service, and the outcry is that we want more choice, not less. Have you ever looked at your bill and said, I don’t need 200 music channels, but I really wish I had a few more sports channels?  I thought so.  We prefer choice and ala carte pricing, because it puts us in control of what we consume, whether it be food or online content. 

Perhaps the greatest straw man regarding this is that ISPs will make you pay for access to specific websites. Really?  While the ISPs would in fact have the right to do this, it would be economic suicide for them to do so. There is no incentive for a business to lower their quality while charging the same price (unless they are a Soviets, or North Koreans). Also, it is important to remember that Net Neutrality was implemented in April of 2015. Do you remember when you had to pay extra to log in to Facebook back in 2014? Do you remember the super high fees you paid then? No? Me either. This has never happened before. People claiming this will happen have never given any reason to believe it will happen. It’s nothing more than a scare tactic to make the people wish away their choices and enforce monopolies like Google and Amazon. Why do you think they are all for Net Neutrality? Have you actually read the user agreement that Amazon and Google make you sign before you use their services? You should.

Ultimately, Net Neutrality is nothing short of Internet Communism. It is the State ordering the expropriation of the entire ISP industry from the private sector to the public sector. It is a massive uptake in central planning in which private owners have no say.  And it is particularly insidious in the way it is being marketed.  I call it FUD, fear, uncertainty and doubt. Rather than rely on the facts, people are being told the sky is falling. 

There are two pieces of advice that I have learned to trust in.  First, if someone is telling you all the bad things that could happen and none of the good, look really closely because nothing is 100% good or bad.  Second, when someone tells you we need the government to manage something for us, keep one hand tightly on your wallet.

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