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Source link: http://archive.mises.org/10967/a-libertarian-take-on-net-neutrality/

A Libertarian Take on Net Neutrality

November 4, 2009 by

The cool, hip techno-pundits are usually reliably Obama-liberal/libertarian-lite types. A bit California-smug, engineer-scientistic, anti-principle, anti-”extreme.” But okay overall. A soft, tolerant, whitebread bunch.

On the last This Week in Tech, I was pleasantly surprised to hear the always interesting Jason Calacanis voice support for nuclear power; and even more surprised to hear soft-liberal host Leo Laporte echo mild agreement with this. Good for them!

But then they had to revert to form when they, along with Natali Del Conte and Patrick Norton expressed unanimous disapproval of McCain’s Internet Freedom Act, since they are all–”of course”–in favor of net neutrality rules imposed by the FCC. McCain’s proposed statute would block the FCC’s proposed net neutrality rules, which would forbid network providers (e.g. cable companies, telcos, and wireless carriers) from selectively blocking certain types of Internet use.

Got that? The techno-pundits are against regulation (by cable companies) … so they favor regulation (by the FCC) of the cable companies … so they oppose government legislation regulating a government agency. They sit there fuming about how disgusting McCain’s draft legislation is. So they see that the state is terrible. Yet it doesn’t occur to them that it might be a bad idea to trust the government to oversee the Internet. They are against regulation of the Internet, so they support ceding power to the government to … decide how and whether the Internet should be regulated. It doesn’t occur to them that we should simply favor property rights, individual freedom, and the free market. The closest any of them come to this position is John Dvorak, who has a libertarian and contrarian streak, and who often observes on TWIT that there’s nothing wrong with tiered pricing–charging more for a fatter pipe, etc.

Is “no regulation of network providers” the libertarian position? It clearly would be if the network providers were purely private. In the libertarian view private property owners determine how their property may be used. There is no “right” to access the Internet. A private network provider ought to be able to offer service on whatever terms he wants; and consumers to accept or reject it. Tiered services, deep packet inspection, prohibition of certain types of uses or even certain types of content–that’s up to the providers and customers and whatever deal they agree to. We libertarians believe in “capitalist acts between consenting adults,” to use Nozick’s phrase (see Rothbard’s earlier formulation).

But because of various degrees of corporatism–state favors and protectionism, tax funding of infrastructure, etc.–the service providers are arguably not 100% private. But the solution is not to regard them as essentially part of the state and thus fair game for regulation, but to pair our call for no state regulation of the Internet (no net neutrality regulations) with a call for the abolition of all forms of corporatism, such as various laws that work out protecting larger companies (tax funded subsidies, IP law, wage and hour legislation, mandatory worker benefits, labor union legislation, minimum wage, incorporation statutes [note: this does not mean I think that limited liability is a privilege conferred by the state on corporations], and so on).

This is my take, anyway. I am not aware of much informed libertarian analysis on the net neutrality issue. Kevin Carson pointed me to Jim Lippard as “one of the better libertarian writers on net neutrality”–I’ll have to take a deeper look, but from a quick glance I’m not sure he’s a libertarian; here he writes, e.g., “providers shouldn’t be able to block access to competitors’ services”–should be able? This seems to presuppose the legitimacy of an overarching state regulation, which is certainly not libertarian.

Update: Leo Laporte must have gotten a lot of flak in the past week for supporting the FCC imposing net neutrality rules on Internet network providers. In TWIT 220, he expresses genuine concern with this. And he seems to get that the issue is not what rules the FCC should impose–which most of his technocratic guests in that episode focus on–but the issue of the danger of empowering the state itself to regulate at all. Most of the panelists at least seem leery of state regulation, but are concerned there is not enough competition in the network provider industry to ensure self-regulation. This concern is understandable, but the pundits should pause to ask: what is the state’s role in causing the industry to be the way it is? In addition to being leery of state regulation of the Internet, they should oppose state policies that subsidize and prop up large companies or reduce competition; one of them even brings up the issue of how utilities are given monopoly status by municipalities. So they are almost there. It might help if we libertarians could elaborate the various state regulations and laws that have given current network providers more market power than they would have on a truly free market–taxes, minimum wage laws, implicit and explicit subsidies, the legacy of government-granted monopolies, pro-union legislation, and various other regulations that disproportionately shackle and hamper smaller companies and potential competitors; regulations that help the existing, larger companies by increasing barriers to entry into that field; state taxes, IP laws, and regulations that stifle dynamic change, innovation, and competition.

Laporte also mentions some kind of split on this issue among EFF board members. I looked at the EFF site and can’t find much explicit about net neutrality–no categories, etc. They seem to be trying to keep a low profile on this issue, maybe because they have some pro-state-regulation board members. I did find this recent EFF article by Corynne Mcsherry, “Is Net Neutrality a FCC Trojan Horse?,” which expresses the concern that if the FCC just grabs “ancillary jursidiction” to impose net neutrality regulations, who knows what other regulatory powers it might just unilaterally decide to assme the power to impose regulations pursuant to an “Internet Decency Statement.” But though McSherry here seems to display healthy skepticism of state regulation, she is obviously trying to leave open the door that some state regulation of network providers might be favored by EFF: e.g., McSherry writes, “If ‘ancillary jurisdiction’ is enough for net neutrality regulations (something we might like) today, it could just as easily be invoked tomorrow for any other Internet regulation that the FCC dreams up (including things we won’t like).” Note the bolded language. And she notes that one possible solution to the FCC’s “ancillary jurisdiction” power grab is: “Congress could limit the FCC’s power by authorizing to regulate only to ensure network neutrality.”

The EFF, if it is to remain principled and a proponent of individual, Internet-related freedoms and “digital rights,” must be clear on the enemy of such rights: the state. The moment EFF supports any state agency’s regulation of private companies or the Internet, they have succumbed to their leftist confusions and statist sympathies and become worthless as principled defenders of individual freedom.



Mitch November 4, 2009 at 2:19 am

Good post Stephan.

A book on the distortions in the “utilities” services in our country (Internet service, cell phone industry, electric companies), in the vein of Block’s private roads work and your Against Intellectual Monopoly would make a great read.

Abhilash Nambiar November 4, 2009 at 4:24 am

Can’t help wonder how accessibility to mises.org will get impacted by net neutrality issues. Too far off to speculate I guess.

FarSide November 4, 2009 at 8:25 am

As a web developer who used to scream in support of net neutrality, I finally came to realize it was a mix of smugness and greed that held my position.

Smugness because as a “computer guy” I had more exposure and therefore MY opinion was way more informed than the damn opposition. Greed because, as a large consumer of bandwidth I might easily have to start paying more for my connection.

These things can cloud judgment, and it wasn’t until a couple of years ago that I was able to realize why that position didn’t feel right and was able to pull emotion out of it.

Additionally, many tech types are quite utilitarian, as a rule, and quite rightly see the removal of the government supported monopolies as a herculean task. It seems more plausible to them to preemptively “fix” what it not yet an issue by adding more laws.

Nate November 4, 2009 at 9:44 am

The thing I fear from “net neutrality” is it will be the proverbial foot in the door for government regulators to start asserting themselves in a similar manner to their control over radio and television content and licensing.

Stephan Kinsella November 4, 2009 at 10:18 am

@Horst: The problem w/ the positions of various soft-libertarian groups like EFF is that their opposition seems to be too contingent, and based on technocratic and utilitarian grounds. Their concern is a good one: that the FCC should not act ultra vires, basically. Fine. But that does not mean they oppose the FCC regulating the Internet… so long as Congress gives it the power to do it legally. Their concern seems to reduce to a concern for legality, rather than justice.

Note, they seem to want to be “open-minded” and evaluate any possible net neutrality rules on their merits: “… we look forward to evaluating Chairman Genachowski’s proposed net neutrality regulations.” A principled libertarian does not need to wait to evaluate them: any net neutrality regulations by the state are obviously illegitimate for a number of reasons, regardless of their substantive content.

Andrew May 13, 2010 at 11:54 pm

There is only one U.S. government, only one FCC. If they get to regulate content, they will do so as a monopoly, and the consumer, or web surfer, will have no other course of action. If AT&T or Sprint, or whoever, decides to censor the internet, consumers can take their business elsewhere, Netzero, or whoever else is out there. Which brings us to the question of significance in the matter. if At&T blocks Sprints site, I really couldn’t care less. Sprint is there competitor, I don’t like Sprint, I like ATT, I just don’t care. But who is the competitor of Government? mises.org, to a greater or lesser degree Rush Limbaugh, Fox News? CNN back in 2004? I would much rather take my chances with one of a dozen internet providers censoring their competition than risking the government censoring its competition.

Joshua November 4, 2009 at 12:31 pm

I listen to TwiT every week, and I sometimes wish I was on the show when they talk about IP and Net Neutrality stuff. It’s so frustrating to hear otherwise intelligent people completely miss the root of the issue and spend an inordinate amount of time hacking at the branches of evil. Ugh!

Julien Couvreur November 5, 2009 at 1:33 pm

It seems to me that the best way to ensure net neutrality, if people did care about it, is competition amongst internet providers.

That said, it seems that in the US there is not that much competition between internet providers. Is that natural (expensive or risky infrastructure investment) or the effect of some earlier intervention?

Two recent threads related to this question:
http://www.facebook.com/topic.php?topic=11515&post=79852&uid=36496893934 (Mises Institute forums)

weebles January 24, 2010 at 1:43 am

In a way, the net neutrality paradigm is a form on non-regulation. It just states that all websites should be available to all users at the speed the host is paid to serve the pages. And that if you create a website it should be available to all internet users at the speed you pay your host to serve your website.

Comcast and other providers have expressed the desire to block certain websites, make access to certain websites premium, and slow down others.

Now, if every market had 3 or 4 options available I suppose the competition would tend to “force” the competitors to offer as much as they could to please the demands of the customers.

But many millions of folk in the US only have one option, as do I. I have Comcast and no other options. I have no landline hookup to my house for a DSL option.

Another sticky kink in the system is that the US govt funded and continues to fund large portions of the internet backbone and fiber-optic cabling and tie-ins all over the countries in cities and towns all across the country. Also, there is no single “owner” of the backbone.. it is an incredibly spaghetti-like mishmash of segments that all use each other lines and trunks at any given time. It is definitely a cooperative and sharing arraignment.

Not having net neutrality in place is exactly the same as say Verizon blocking calls to Cingular phones or intentionally making calls to Cingular phones sound crappy.

Is this a good idea?

drew April 6, 2010 at 9:58 pm

there are more options than simply cable or dsl. there are usually wireless options, like a verizon mobile broadband plan, satetllite, ,dial-up, or even a dedicated T1. additionally, wi-fi is becoming available in an ever increasing amount of locations. so connectivity options abound for the average consumer. it’s true that because of the convoluted relationship between government and the telecom providers that competition is pretty meager, but there are options. certainly more than just dsl or cable.

i keep hearing people say they are afraid of being charged subscriptions to their favorite websites like they pay for cable channel packages. really!? i mean, really? does anyone honestly believe that this is the direction we will move in. if at&t (my dsl provider) makes me pay for google then i’ll either find an alternative isp or i’ll use an alternative search engine. if rupert murdoch wants to block his content from google, it won’t even be missed. there are hundreds of equal or better content sources out there that will not charge and will not care how far their content is syndicated. in this digital age, there are always going to be less expensive, and often free, alternatives whenever someone wants to try and make us pay.

Martial Artist September 26, 2011 at 6:19 pm


You are correct for most, but not all, urbanized areas. We live in a near suburb of Seattle, but our condo complex is in a relatively shallow ravine along a major North-South arterial, with a taller apartment complex at the lower end of our property. Result, we live in a cellular “dead zone.” We also have only Comcast (high-speed fiber-optic cable) or Verizon (land-line DSL—much lower BW) as an available provider. If we did not have one of those two choices we would have to have a land-line telephone to make/receive calls from home (whether via Comcast or Verizon). There are other parts of the suburb in which we live which suffer from similar limitations on just how free a market is available to serve them, again owing to terrain. And this is in a major metropolitan area of the U.S. So, I think your analysis of the choices that are “commonly available” to consumers is at least a little bit overoptimistic.

Pax et bonum,
Keith Töpfer

Jay April 19, 2010 at 3:56 pm

Assuming a free-market economy:
It’s well within Verizon’s rights to implement such a program (blocking calls to AT&T served phones, etc). Verizon Wireless would quickly lose market share, assuming their patrons desire a phone that can call any network. The same goes for us in the Comcast only areas (such as you and me). If Comcast decided to block or slow access to certain websites, their patrons (certainly me) would look for another option to satisfy their (my) demands. If I can be so bold, I would assume investors would see this as an opportunity to gain a share of the ISP market.

There need not be legislation on this issue. The market would solve them problem on its own (and may even give the consumers more choices and lower prices!).

Anthony April 19, 2010 at 10:00 pm

I would be wholeheartedly in opposition to net neutrality regulations in a free society, but if ISP’s are allowed to block access to web sites while intellectual property legislation still exists there is a potential for a disastrous loss of freedom on the internet.

Imagine a law (or a declaration by a judge) forcing all ISPs to block access to any site accused of copyright violations… China’s internet controls would pale in comparison. In my mind net neutrality laws will primarily act to prevent governments from destroying the internet in the name of IP… it may well be the lesser of two evils.

Mike September 24, 2010 at 10:44 am

You may have valid ideas but they’re hard to spot through the ego. Railing on liberals like you do in the first paragraph only encourages them to discount your points. If they don’t stop reading immediately, they’ll tepidly scan the rest with skepticism. In effect, then, you spent a lot of time writing this to preach to the choir. It’s great, I guess, if you just need a publication for a resume, but as far as actually making a difference goes, it’s hopeless. Just look at the constant chorus of agreement from your comments. It’s akin to shouting “go Yankees” in the Bronx–everybody cheers but, ultimately, no one remembers.

Ben Pike November 30, 2010 at 11:17 am

Thank you for the post.

As a free market capitalist – I believe the gov’t has no right to dictate to ISP’s what they can/can’t do.

The problem is that in Etowah County, AL – there aren’t a whole lot of comparable choices for internet service. You have Comcast, AT&T DSL (which is ATROCIOUSLY slow in comparison), and depending on your area – Charter (again – nothing but crap) and OpenRange 4G wireless (very promising, but not available everywhere and still slow – in comparison).

So if Comcast starts segmenting off Netflix or Hulu for an extra fee – I don’t really have a very good comparable option because of anti-competitive actions by local, state, and federal gov’t regulations in favor of the larger companies.

logan December 27, 2010 at 6:14 pm

AT&T, Comcast, and Verizon spent close to 50$ million dollars in 2008 for lobbying. Local, state, and federal gov’t regulations favoring larger companies is atleast partly a result of this spending. I believe in the innovative nature of the tech sector to solve any problems that may arise. Yet I am fearful of already entrenched interests to play by the rules of the free market and not unfairly influence govt regulations to their advantage. I remain confused :(.

TechJock January 20, 2011 at 1:49 pm

Interesting take on the topic. I didn’t explore as much of the political aspects in my post on net neutrality.

Jason Meyer March 15, 2011 at 6:00 pm

What net neutrality legislation, if passed in its idealized form (and obviously, it would not get passed in its idealized form) would do is to prohibit service providers from blocking the voluntary download of applications or favoring one sort of traffic over another. At its heart, this is a commons issue. 80% of all of the bandwidth out there is consumed by 20% of the users. We hit on something here and ran right over it. Debating this topic from a libertarian point of view is problematic. We don’t live in a libertarian society, many assume that we are slowly headed towards socialism. If I may make an oversimplified analogy, net neutrality is like deciding on what flavor of ice cream to order in a world where there is only vanilla and chocolate. I’m sorry to those that think this is a valid libertarian argument, it is not, in a libertarian world Net neutrality would be a mute point. You cannot argue a libertarian philosophy inside of a socialist regime and not look like the fool you seem to me. Its like being in a quantum mechanic course and arguing a point based on Einsteins’ general relativity. Does this make sense to you psudo-libertarians or libertarian-lite types? It might help if we libertarians could elaborate the various state regulations and laws that have given current network providers more market power than they would have in a truly free market–taxes, minimum wage laws, implicit and explicit subsidies, the legacy of government-granted monopolies, pro-union legislation, and various other regulations that disproportionately shackle and hamper smaller companies and potential competitors; regulations that help the existing, larger companies by increasing barriers to entry into that field; state taxes, IP laws, and regulations that stifle dynamic change, innovation, and competition. A true libertarian response to this issue is to call for the elimination of all forms of corporation, tax funded subsidies, IP law, wage and hour legislation, mandatory worker benefits, labor union legislation, minimum wage, incorporation statutes [note: this does not mean I think that limited liability is a privilege conferred by the state on corporations], and so on. Instead of supporting a “net neutrality act” pause to ask: what is the state’s role in causing the industry to be the way it is?

Lenoxus April 16, 2011 at 11:29 pm

This is reminiscent of arguing against any measure that would recognize same-sex marriage because the government shouldn’t be in the marriage business to begin with. The perfect solution fallacy…

Alexander September 26, 2011 at 3:58 pm

I think you’ve really hit the nail on the head with the point about explaining how governments more subtly create oligarchical market conditions. I think that’s the big cornerstone of Libertarianism that’s missing in a lot of conversations I hear. People see a lot of bad things in the market and don’t realize how many of them are creatures of the government. I had to spend about half an hour once researching segregation in the south to prove to a friend of mine it existed because of state laws, not profit-driven desires.

(we agreed to disagree on the topic of weather or not it is acceptable to employ only attractive Asian girls).

Stephan Kinsella September 26, 2011 at 5:31 pm

It’s libertarian, not Libertarian (the latter implies LP); it’s whether, not weather. I have no idea what you are talking about re Asian girls.

Martial Artist September 26, 2011 at 6:25 pm

Mr. Kinsella,

I suspect, although I could be wrong, that Alexander’s comment about Asian girls relates solely and specifically to a disagreement between him and the friend to whom he alluded.

Keith Töpfer

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