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Source link: http://archive.mises.org/12510/harvards-yochai-benkler-on-net-neutrality-and-innovation/

Harvard’s Yochai Benkler on Net Neutrality and Innovation

April 19, 2010 by

I’ve posted recently about Net Neutrality–see Net Neutrality Developments and A Libertarian Take on Net Neutrality. There’s an interesting discussion about this and related issues on the EconTalk podcast, between host Russ Roberts and Yochai Benkler of Harvard. Benkler really knows his stuff and it comes thru in this fascinating and informative discussion. As he explains, there is a debate about whether to impose “open access” as well as “net neutrality” regulations on the Internet-related companies. Open access means the state treats the physical communications infrastructure–fiber optic cables and so forth–that carry data signals for internet, cable TV, telephone communications, as a sort of regulated utility. Thus, it forces the owners of the physical “pipes” to sell capacity to competitors at regulated rates. This means the consumer can buy internet service from companies other than the owners of the physical networks. Net neutrality means that whoever whoever sells the service (whether it’s the fiber owner or some company that the fiber owner has to allow to use its networks to offer competing service) can’t discriminate between types of data packets, and can’t impose tiered pricing.

Now, as noted, Benkler knows his stuff, but he is clearly one of these mainstream interventionist types, talking about how “we” (the state) needs to intervene in the market to optimize outcomes, etc. etc. He is in favor of imposing open access, for example. As the podcast summary notes, “Benkler argues in favor of net neutrality and government support of broadband access.” The free market host, Russ Roberts (of Keynes-Hayek rap fame), is very diplomatic but pushes back one some of Benkler’s pro-regulatory assumptions (listen around 29:06-, 30:12-, 41:20-, where he makes the free-market case and argues against the pro-regulatory assumptions), but gets Benkler to admit explicitly that he favors the state intervening and forcing companies to use their property in certain ways (around 29:55-, ). Benkler’s paternalistic, state-trusting approach even carries through when it comes to the iPad and similar “closed” or proprietary products like the iPad (47:30-). As the summary notes, “He is skeptical of the virtues of new technology (such as the iPad) fearing that they will lead to less innovation.” He worries that consumers might like the iPad because it’s got a fantastic interface etc., but that this might be at the cost of the long-term value of “a more innovative platform” (open source) (49:50-). The typical omniscient planner mentality: there is market failure, and the state is needed to fix and tweak things, when the consumers get it wrong. Russ Roberts (48:10-) rightly interjects that all these products are great; he praises the first and second generation kindles; the progress of technology; the iPad; the diversity; the competition; Apple’s products; open-source; the Sony e-readers; the dynamism of the market.

Update: Peter Klein has some insightful comments on and criticisms of some of Benkler’s views in this review.

{ 8 comments }

Current April 19, 2010 at 6:21 pm

I was reading the Constitution of Liberty today. In it Hayek writes:
“The new kind of expert whom we also find in such fields as Labor, agriculture, housing and education, is an expert in a particular institutional setup. The organizations that we have created in these fields have grown so complex that it takes more or less the whole of a person’s time to master them. The institutional expert is not necessarily a person who knows all that is necessary to enable him to judge the value of the institution, but frequently he is the only one who understands its organization fully and therefore is indispensible. The reason why he has become interested in and approves of the particular institution often have very little to do with expert qualifications. But, almost invariably, this new kind of expert has one distinguishing characteristic: he is unhesitatingly in favor of the institutions on which he is an expert. This is so not mearly because only one who approves of the aims of the institution will have the interest and patience to master the details, but even more because such an effort would hardly be worth the while of anybody else: the views of anybody who is not prepared to accept the principles of the existing institutions are not likely to be taken seriously and will carry no weight in discussions determining current policy.”
(p.252 in the Routledge Edition)

J Cortez April 20, 2010 at 12:47 am

Benkler is a smart guy, but I have serious problems with what he proposes. Any government owned or government managed internet is a frightening idea because it presumes that somehow the people (government bureaucrats) charged with running it would be fair and intelligent.

The government in the past decade, has created a boom/bust via banking regulations and central banking, gone to war in Iraq for fabricated reasons, spied on US citizens without warrants, restricted due process for people who may or may not be terrorists (we can’t know for certain without due process) in Guantanamo, destroyed and occupied Afghanistan without finding Bin Laden, sent missile drones into Pakistan killing hundreds of civilians, tortured people in violation of agreements the US government had itself signed, bailed out to the tune of trillions people that should be charged with fraud, gotten involved with car manufacturing even though throughout history state owned manufacturing has been shown to be bankrupt and horrible, killed 3500 people through shoddy levee building and criminal negligence in New Orleans, and on and on and on.

I don’t see how anyone would think that somehow the government is that good at administering anything, much less something like the internet. The frightening prospect of ruin and/or abuse is not some pipe-dream.

Regarding the Ipad, I don’t think it is a road to less innovation or closed networks provided peopler are allowed to copy. The Ipad is a signal to the Kindle, the Joojoo, and Sony’s Reader that they’re going to have step up their game. And provided the world doesn’t continue down the path of patent craziness, the market for readers will stay open and expand.

mundi April 20, 2010 at 4:36 am

Net Neutrality is really interesting I think because it shows what a huge percent of the population really believe that neutrality will come at no extra cost to services. They all think they will get unlimited downloads on every protocal for the same price as services who do limit peer2peer etc. Goto sites like slashdot.org and you will lucky to find one person who opposes net neutrality.

Michael A. Clem April 20, 2010 at 9:37 am

The race is on to see how long it takes the government to regulate the internet out of existence…

Jay April 20, 2010 at 10:02 am

Like I’ve said in other Net “Neutrality” blogs, if Comcast, for instance, decides to slow or obstruct access to certain sites, their customers will likely look for substitute access. Should those alternatives be absent, there would be a prime opportunity for investors to supply a service that consumers demand. Would this not create more competition and drive prices down? Shouldn’t private companies be free to make decisions that may increase their profits at the risk of losing market share? Government interference will do nothing to aid in this situation. This is like bullying air carriers with additional taxes should they choose to charge for overhead bin usage (i.e. choose how their business and fee structure is implemented) – which is actually being discussed by our betters in congress.

Shifting gears…

“As the summary notes, ‘He [Bankler] is skeptical of the virtues of new technology (such as the iPad) fearing that they will lead to less innovation’”. So, the innovation of the iPad will lead to less innovation? Sounds like faulty logic. The iPod (an MP3 player innovation) led to the iPhone (a cell phone innovation) which led to the iPad (a tablet computer innovation). What’s next?

Curt Howland April 20, 2010 at 10:06 am

The regulation of the ‘Net began with the successful prosecution of Napster, and the DMCA.

That Leviathan was unable to capitalize (sic) on these successes shows just how hard their problem is.

But they do keep trying, wrapping their control in pretty phrases and platitudes like “neutrality” that is nothing of the kind.

The “Anti-Counterfeiting Trade Agreement” is coming, in one form or another.
http://news.cnet.com/8301-13578_3-10467337-38.html

newson April 20, 2010 at 10:41 am

empirical evidence proves 3 or 4 competitors are optimal for service delivery???? benkler sounds smart, if not wise.

Vanmind April 21, 2010 at 6:05 am

I’ve already started demanding a similar fixed price scheme for all seats at sporting events. Courtside with Spike Lee for only, um, about $1800. Oh, wait, I can’t afford that much, better go to the nosebleeders where the price is only, um…

What I’m looking forward to is the series of committees that get mandated with judging the quality of internet content to determine which “culturally relevant” stuff gets fat-pipe socialist priority (*fingers crossed* for lolcats).

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