If network owners are deprived of the ability to manage their assets, it is very likely that they will stop investing in them. This would not be good for Google and other major supporters of net neutrality, whose business relies heavily on the increase of data traffic. FULL ARTICLE by Fernando Herrera-Gonzalez
Source link: http://archive.mises.org/12825/net-neutrality-unwarranted-intervention/
Net Neutrality: Unwarranted Intervention
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Isn’t it obvious. These companies have gotten so large that they can use their power to crush the competetion. This is not something new, just new to the internet industry. At&T, Bell, have both used their lobbying arms in the past to get legislation written in their favor. Google wants a monopoly on internet searches. Imagine a world where Google is the only website, all websites must run through Google, you can’t post anything without using Google. This is the future we are headed to, if not the complete implosion of the internet, if we allow any more regulation of a resource that belongs only to those who are PAYING for it! Just because you use something, does not mean you own it!
So you’re saying that the solution to this lobbying that creates government regulation in monopolies’ favor is… even more government regulation, that this time of course will be immune from giving advantage to monopolies?
No the solution is for government to stay of our business. If the telco’s want to charge fees to access certain websites, those who are willing to pay will, those who are not, will simply not visit those websites. The free market will work in this case, ISPs that charge too much will see less traffic and may eventually have to lower their price or abandon the practice altogether. Bandwidth is not free, and we are using it even faster than ever. A 10 mbps connection is now barely sufficient if you are running a large office, you used to be able to get by with a T1 at 1.5Mbps.
It is not the simple case that Google, Facebook, Amazon, eBay, etc., are villains using their new found wealth to lobby congress and steal bandwidth from Telecom network owners. The Telecom industry has always been granted government subsidies and privileges to thrive at the expense of providing quality service to you and me.
http://www.techdirt.com/articles/20060523/1919258.shtml
And they have no qualms in continuing to do so. There is some justice to the fact that those that gained power through legislation are being legislated out of power. In other words the intervention is not totally unwarranted.
On the flip side tough, the internet companies are replacing the telecom companies as the new information oligarchs. The more they rely on legislation rather than the entrepreneurial skills that brought them into prominence, the more likely we are going to get sub-standard service from them.
The real problem is state intervention. Tim Swanson’s blog entry makes this point nicely
http://blog.mises.org/5163/network-nationalization-net-neutrality-in-action/
Unfortunately the state will intervene sooner or later. There is no way out of it. Given that, companies would rather have it such that states intervene in their favor rather against it. We can anticipate that all successful entrepreneurs will sooner than later master the fine art of lobbying.
Without net neutrality, this website would fade and disappear along with countless other specialty websites that could not afford to pay the telecoms what they would demand. The big telecoms want to limit traffic to any sites that don’t pay them a premium.
Your logic is faulty to think the telecoms will quit investing if they are not allowed to gouge, extort, use the verb of your choice, from users and sellers on the web. Their profits and revenue will continue to be good and increased revenue will follow good service and faster internet.
Americans pay more for slower internet service than most of the industrial world.
Telcos would be more interested in charging megasites like Google than smaller ones like this one; there’s no money in foisting extra costs on tiny sites(especially since those sites could grow to be big, fat targets if left alone). If one wants to pay extra for extra consideration, then I doubt a telco would say no. Google, on the other hand, is directly responsible for a major chunk of bandwidth use(I’d guess it’s mostly YouTube) and would be targeted.
“Your logic is faulty to think the telecoms will quit investing if they are not allowed to gouge, extort, use the verb of your choice, from users and sellers on the web”
What do these emotively charged, empty words even mean?
I came in here to comment, but “Ben” says it all – The big boys favor regulation to better suppress the competition.
I wonder how much of Google’s, Amazon’s, eBay’s, et al…, desire to lobby for net neutrality is the kind of “self hating commercial culture” that Jeffrey Tucker wrote about a little while back. They’re very successful, and some in their circles might feel a bit guilty for it, so why not jump on the net neutrality bandwagon that allegedly is on the side of the common man? It’s what Ayn Rand called, “sanction of the victim”.
The other alternative isn’t that they’re necessarily looking to limit competitors in their markets because they all depend on small business entrepreneurs, independent publishers, and freelancers to a degree… but that they’re looking for ways to offer network connections themselves and see Comcast, Verizon, etc., as a barrier to overcome. Recall Google’s bidding on “white space” not too long ago.
I have no problems with companies like Google or Comcast. As far as I’m concerned they’re providing a service I want and that I’ve benefited from as a consumer, life long learner, and a business owner.
Is it perfect? No. But it’s still pretty amazing. And saying that we need “net neutrality” because “our speeds are slow compared to the industrialized world” (not sure just how reliable that data really is) is like saying we need more government management in farming because my oranges and strawberries aren’t sweet enough. The so-called “slow” connection speeds in the U.S. shouldn’t be what makes or breaks a global brand like Google anyway. That kind of faulty rationale strikes me as desperate and hopefully ineffective.
While I cannot say “why” Google, et al, want to cut their own throats, I can talk about the network itself.
I was working at NASA just before, and through, the National Science Foundation’s decision to release the “Internet” to commercial uses. In late 1992, I personally believe but cannot prove that the decision was made to throw open the Internet, because someone or someones knew they had to stop AlGore’s plan for the government run “Information Superhighway”.
Everything that has made Google, et al, wealthy since occurred only because of that decision. Finally, commercial use of the ‘Net, open use of the Internet protocols, exploded across the globe. Everyone, from a BBS hosted on a single system in some guy’s mom’s basement and 5 modems, to AOL and Netcom, could talk to everyone else.
I also worked at several ISPs and network providers since, as an engineer. I will tell you flat out that the MBA and professional “management” types simply cannot understand why they can’t get a “revenue stream” out of the other networks. They have wanted to erect tolls as the borders since day 1, and have had to be brow-beaten back over, and over, and over, by those like me who recognize that doing so would be the death-knell for the company.
For exactly the same reason, “Net Neutrality” looks good to the highly educated morons in suits. They cannot grasp that their customers can swap providers at will, and will drop the company the moment they think they can get a better deal elsewhere. Slow down access to BitTorrent, for example, those that use it will communicate with each other and identify the ISPs involved. Think Prodigy died quickly? Just wait until The Pirate Bay puts a banner up that says, “If you’re using XXX, you’re getting shafted.”
Maybe, just maybe, charging for usage will come back into style. Maybe the ISPs will make their fat customer pipes cost more, and their thinner ones cost less, in order to better utilize the systems and balance usage. Maybe. But those are issues for the individual ISPs, not policy makers in Washington DC.
Certainly, the responsibility for over-selling fat customer pipes, and then complaining that people are actually USING THEM, rests squarely with the ISPs themselves.
Google et al, wants regulation so they can lobby against their competitors. With strict regulation in place, only the big boys will remain competitive while the rest drop out. It’s a method to maintain market dominance and, frankly, it works…If we let it.
There has to be collusion taking place already. I have three choices where I live: cable network, telephone line and wireless network. These are completely different methods of service delivery but they all cost about the same. This cannot possibly be a coincidence.
That’s not collusion. Most state governments grant monopoly priveleges over communication formats. Only one company can operate a coaxial cable run service. Only one company can operate a telephone line service. Only one company can create WiFi. Only one company can create a fiber optic network.
The problems that are being imagined up by the network neutrality supporters are exactly the ones created by institutionalized monopolies. Repeal the monopoly laws and all of these problems (that coincidentally have yet to manifest) will go away.
Net neutrality seems to me one of the only examples I can think of where regulation may not be such a bad idea *given the current situation.* I have exactly *one* ISP available to me at reasonable speeds. This ISP has for all practical purposes been granted a government-sanctioned monopoly in my area. As a result, there is little competition in ISPs, and little option for consumers.
Unless there is true competition (meaning taxes, regulations, zoning regulations, etc), how will ISPs who erect tolls or blocks to certain content be punished in the marketplace? I fail to see how a market can operate within the existing government-granted monopoly.
Of course, the true solution is to open telecoms to free competition. But in lieu of true competition, is there another way to prevent ISP rent-seeking by way of additional network tolls?
hah, beat me to sayin’ the same thing
There isn’t a state-sanctioned monopoly in my area. So I’m not sure what you mean. Perhaps it’s different in your area or my understanding of it is different. For cable TV, yes, local monopoly exists in my area. However, a person can still choose Direct TV, Dish Network, or just sign up for a Internet connection and watch streaming video on their computer, iPad, or TV.
As for the Internet, I can choose from either Comcast, Verizon DSL, Clear wireless, mobile, businesses like coffee shops that offer wireless to customers, satellite, or a whole bunch of mom-and-pop dial ups. Yeah, using satellite or dial up at this point wouldn’t be fun since since I’m now used to high speed cable but the choice is still there.
I think the reason so many people use either DSL or Comcast in my area is because they’re the fastest service and they do the best job out of all the providers in the market. But if Clear or mobile providers ever improved their speed and service, and either Verizon or Comcast started to screw up, then I’d have no problem switching service. I just don’t see how people think we’re going to be stuck with just the likes of Verizon or Comcast.
You could start your own ISP and demand that government end its regulatory crimes against humanity. Of course, most people just bend over and accept that they’ve been “defeated” in one area and start lobbying for “new regulations” in another area hoping to compensate for their earlier “defeat.” That’s how the decline of civilized society accelerates into what Basitat termed “…that great fiction whereby everyone strives to live [through political activism] at the expense of everyone else.”
The problem is, if you eliminate one piece of government intervention, the system isn’t fixed until you eliminate all of it. The invisible hand works in a competitive market where ISPs are on a semi-even footing. With the current state-sanctioned monopolies, ISPs can charge an arm and a leg, offer sub par service, and have no motive to change. Net neutrality makes sense when you consider that the market is not free as it stands. The way I see it, it’s either all or nothing. We either leave isps to fend for themselves and let them charge more for increased usage, or we regulate the hell out of them, only to allow lobbyists to capture the regulators and allow for an even BIGGER state “sanctioned” monopoly. I work in IT where everyone I know is a proponent of net neutrality because we know of what the ISPs are capable. Net neutrality doesn’t fix what’s broken, but the real fix is unlikely until people change their mind, so net neutrality is our best response.
The fallacy in the argument is that there pipe providers hold a monopoly in most cities. I cannot obtain cable connectivity from any cable provider only the one guaranteed a monopoly to wire my neighborhood, the same with many of the wired services. The excuse was to invest in the infrastructure they need a guaranteed return and “protection” from competition. Capitalizing on that monopoly to give preferential services to your content is anti-competitive and not free market. As long as they hold monopolies on the wire, they should not be allowed to restrict content.
“As long as they hold monopolies on the wire, they should not be allowed to restrict content.”
ISPs have been benefiting from their “common carrier” status by not restricting content, and therefore not being held liable for legal repercussions of that content. One of the problems of prioritizing based upon content is that the ISP can no longer claim to “not know” what is traversing their Net.
I see the “Net Neutrality” as being an awful distraction, lots of people thinking they can use it to their advantage and not realizing that once the camel’s nose is under the tent, the rest will come through and a lot faster than they imagine.
Maybe Broker is right, and Google, et al, see it as something they will be able to control. I’m sure that’s what the railroad tycoons thought too, and before them the canal tycoons, etc etc etc.
As network owners and maintainers, ISPs should be allowed to charge customers according to usage levels (vs. just connection speed) or should be allowed to prioritize the data going over the their own networks (that is, ration their bandwidth in some way). Neither web sites which offer bandwidth-intensive services (ex., streaming video) nor the end users that use those services like the sound of that, so they are trying to push the costs involved onto others (the ISPs themselves or other users) via the force of government. That’s pretty much net neutrality in a nutshell, correct? If net neutrality ever goes through, I strongly suspect it will inevitably result in bandwidth shortages.
The author wrote, “Why they prefer to put their future in the hands of governments instead of depending on their own proven capacities of service is simply beyond me.”
It’s because it is always easier to win a game by getting a supposedly impartial referee to make calls in your team’s favor than by beating the other team with just your own skills. That seems to be the standard modus operandi of industries in the USA today.
You all don’t think the people you rail against don’t have the power to cut Mises.org off the web?
NN, has nothing to do with protecting politically offensive sites. In fact, right now the biggest bandwidth hog sites on the net are porn sites. How many ISP’s block any of them even with no nn rules? Heck, given the recent news about the SEC and MMS, the government even doesn’t block access to porn sites on its own networks. Blocking a site on a big network with millions of access points is not as easy as you think it is. The Chinese government has been trying to block crap for years and the only way they are effective is by using the threat of violence against the users themselves. Even the US government could not shut this site down. All that Mises would have to do is move the site out of the US. If the US government somehow was able to get ISP’s to block the IP address of this site, users could simply go to an offshore proxy site and get there that way. The bottom line is that unless all of the governments of the world get together and come up with a single governing body, there is no way anyone or even a group of them can control the internet.
In plain english net nutrality is a subsidy program to solve a problem that doesn’t exist yet. The sites that are in support of it want to offer more and more robust and bandwidth intensive applications that they fear will cause ISP’s to want to up-charge their customers for using them. For instance, Google may want to get into the online movie or tv businesses and they don’t want Comcast having something like a basic package that excludes access to Google TV for $40 and an advanced package that let’s you access Google TV for $60. In short, its a program that will force all internet users to subsidize the bandwidth hog users and the bandwidth hog sites. Only someone very naive would think that there aren’t some really nasty unintended consequences buried in this idea.
Actually, I doubt ISPs will put the crunch directly on their customers; instead, they’ll likely shove Google TV et al into the lowest priority and charge them to guarantee delivery/speed, foisting the question of how to pay for the priority to the producer(not only is this simpler, it’s a lot less likely to rile up the customers). Metered internet probably will make a comeback, though(hopefully with reality-reflective caps).
It is really cute to hear from a blogger boast that they know what is best for a group of corporations and that these businesses are just too short sighted or dumb to see it. It is like hearing Obama saying he knows what is best for Americans when it comes to health care. Which makes reading this blog entry on this website all the more delicious.
Because no one ever makes a bad decision? There’s a big difference between talking about taking away choice from all Americans through legislation and arguing that the choices that some American companies (or individuals) do make are bad. Your allusion to hypocrisy here is nonsense.
I noticed you chose to completely avoid debating the actual merits of the article’s argument.
If there were a free market in internet service, I’d agree. There isn’t. Phone companies and cable TV companies have the advantage of their government-granted monopolies, and are frequently the only available options for internet service. (An earlier post made reference to wifi provided by restaurants as an alternative–was the poster serious?)
Worse yet, telcos and cable companies have a built-in conflict of interest. They want you to buy BOTH their internet service and their antiquated services (land line phone or cable TV). Cable TV in particular is highly motivated to cripple their internet services lest users “cut the cable” and drop cable TV. That also gives rise to obscenities such as “TV Everywhere”, which lets people view TV shows over the net…but only if they ALSO subscribe to cable TV, as if you could only buy a car if you also bought and maintained a buggy and horses to pull it. In Canada ISPs that offer VoIP services degrade quality of service for other VoIP data unless the customer pays an additional fee, a blatant ploy to force them to use the ISP’s VoIP services. Is that what you want? Then by all means, oppose net neutraility.
No smart guy, I wasn’t saying that wifi at restaurants or coffee shops was a “serious” or better alternative for everyone but rather just one alternative to choose from. Obviously it wouldn’t work for people who spend a lot of time working on the Internet or download/stream a lot of material. And of course it wouldn’t work for businesses. But if you’re hung up on that one point of my earlier post, I think you missed my point entirely.
People like you act like you have a right to the Internet or another persons property. Then you go whining to government whenever you think terms or a price is “unfair”. A company like Comcast goes and builds a cable infrastructure and brings the Internet out of the dark ages of dial up. Who else did that? Did you? Local monopoly (it’s wrong) or not, I’m glad they did.
You don’t have to use cable Internet, DSL, cable TV or VoIP… or any other technology. It’s all voluntary. You don’t like the terms or price they’re offering, it’s simple, don’t buy it.
The only just solution is to repeal the localized monopolies and subsidies for ISP’s. The bad consequences of previous gov. intervention do NOT justify or recommend further intervention.
Those who present NN as a reasonable compromise given our current state of affairs don’t seem to appreciate how that manner of thinking is fully capable of driving us all the way down into the abyss of total gov. control. What will be next “compromise” when the bad effects of Net Neutrality appear? And after that? It’s a perfect illustration of Mises’ theory of interventionism (is that the right term?)
Yeah, that is the right term. Also exactly what I was thinking.
Google wants a monopoly on internet searches while Americans pay more for slower internet service than most of the industrial world.
I have no problems with companies like Google or Comcast. Most state governments grant monopoly privileges over communication formats. Only one company can operate a coaxial cable run service. Only one company can operate a telephone line service. If there were a free market in internet service, I’d agree. Phone companies and cable TV companies have the advantage of their government-granted monopolies, and are frequently the only available options for internet service. Cable TV in particular is highly motivated to cripple their internet services lest users “cut the cable” and drop cable TV.
As I understand it – The FCC currently has no jurisdiction over the Internet – period. This means that the whole argument is made-up, a sham. Both sides of the debate assume that the FCC does, or should, have some form of say-so. So no matter which side you take, if you take either side, big government proponents win. If this is not understood by the majority of people then at some point in the future they won’t propose a debate but just make some arbitrary rules, and that will hurt everyone. We all know they are an audacious bunch.
Conclusion: The answer is to not take sides at all in this debate, but adamantly point out the the FCC has no say in the matter – period. (The only way to win the game is to not play the game.)
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