This morning, on the radio, during the 5:30 news update, the anchor stated that FCC Chairman Ajit Pai mocked supporters of (so-called) net neutrality by saying, don’t worry, the world is not going to end. Interesting word choice: mock. The negative reaction to the FCC’s decision has been monolithic incredulity and feigned outrage. It all seems like melodrama to me. I don’t know that Mr. Pai was mocking anyone, but suppose he was. He can hardly be blamed. The self-important people criticizing him are embarrassing themselves. It’s a blow to free speech? Consumers will have to pay more? They are just avoiding reality. They sound outside of reality. In a net neutrality world, say they, all data is treated equally. As if data have natural rights that are being oppressed.
There was no net neutrality rule until 2015 but a visitor from another planet, or apparently significant masses of the people who already live here, would never know that. Somehow, from 1995 to 2015, internet speeds did nothing but increase and prices for access fell. Hey you people over 30 — remember the early dial-up days? Remember losing your 256K connection when someone called your landline phone? And you had to pay for that! Somehow, without net neutrality rules to protect us, that scenario evolved into anyone older than 10 watching high-def video on a palm-sized smart phone, while flying in an airplane.
Pay attention to who is really advocating for net neutrality. Netflix, Google, Amazon, Facebook. Know why? Because net neutrality shifts their costs to others who are forced to pick up the tab. Here is what happens. Netflix is in the video entertainment business. They stream video over the internet (mass volumes of high definition data). Comcast Cable is one of the major networks over which Netflix videos stream. Comcast also happens to be in the video entertainment business. There is a good chance that Comcast would not want another company using their network to offer an alternative to their own video entertainment service — unless…maybe…the direct competitor paid Comcast for the use of the Comcast network. But this is precisely what net neutrality forbids. Net neutrality struts around saying all data shall be treated equally. That Sounds fair, welcoming, American, and we consumers feel good about this because we think that means our e-mails, tweets, and photo uploads will not be bullied around by YouTube video traffic and Amazon transactions. But what it really means is that Comcast, AT&T and Verizon are not allowed to charge premium dollars to Netflix, Google, and Amazon when the latter three companies want to soak up bandwidth from the former three without paying anything extra. From 2015 to now, the FCC said, Mr. Internet Service Provider, you must allow these other companies — your competitors in some cases — use your assets without being fully compensated. Net neutrality is billion dollar companies fighting with other billion dollar companies, and Uncle Sam picking sides.
Ironically, the result of net neutrality can only be the exact opposite of what it ostensibly promises (protecting consumers from high prices and bad service). When a company has an asset from which they cannot maximize profits, their investment in that asset will slow or cease. In this case, the network companies were not allowed to maximize profits on traffic they were forced to carry. Check this, but I’m willing to bet that investment in their networks has been down since 2015. And going forward, my bet is network investment will increase. The primary sponsors for network investment should have been (and maybe will be) these video streaming tech giants. If Comcast or AT&T could have said no, or it’s going to cost you, then Netflix, et al. would quite possibly have dumped millions or billions into somebody’s network, creating more capacity, to ensure their customers – consumers – would have easy access to their products. Yes, consumers. The most likely outcome of the net neutrality repeal is more network capacity meaning higher speeds and even cheaper network access for… drum roll please… Consumers!
Finally, a quick word on the process by which net neutrality was enacted. There was no legislative process. There was no bill written up and voted on by the House and the Senate. There was no discussion and debate. There was no constitutional process. It was the voting result of 5 FCC bureaucrats. Three people just decided one day. This alone justifies repeal.
The failure of the pro net neutrality argument (as with so many interventionist arguments) is that it assumes one variable, internet capacity in this case, will remain static, while others, like consumer demand and internet-delivered services, will grow. There is no basis for this type of purely arbitrary conclusion. It is the output of children’s minds. (Sorry – don’t mean to mock.)
I agree.
I agree too.