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Source link: http://archive.mises.org/7007/cowabunga-with-copowi/

Cowabunga with Copowi?

August 20, 2007 by

In the debate surrounding net neutrality it seems as if someone is finally willing to put their money where their mouth is: Copowi.

The founder of this new ISP guarantees that “usage will be unrestricted and traffic will not be shapped, throttled, or prioritized.”

And unsurprisingly it will cost potential customers a premium to use these unfettered lines.

At the same time, George Matafonov, its founder, sees the neutrality issue hinging on one particular point: profits.To wit:

According to Matafonov, the major telecommunications companies want to “privatize the Internet” because greater control leads to greater profits. The eventual outcome could become something more like cable television than like the open Internet we know now, and Copowi strongly supports SavetheInternet.com’s campaign to preserve an open ‘Net.

And if you watch the video explaining his position, viewers can come away with the belief that this battle is not primarily hinged on free-markets being regulated into submission via legislative acts.

Unfortunately Matafonov does not define what the Internet is or who owns various portions of it. As I have stated before, it is an amalgam of heterogeneous services and servers strewn across the globe, and owned by a smorgasbord of individuals and firms.

The issue of what can and cannot be accessed via an ISP should be a contractual issue. However, the problem is that various levels of government have historically attempted to regulate the telecom industry (specifically the FCC), which has stymied the growth and health of competition in the marketplace.

One side effect of this market interference has been the creation of geographical monopolies whose disparate power has erected barriers to entry via subsidies like those provided by the National Information Infrastructure and laws prohibiting new entrants.

In addition, there is nothing inherently wrong with operating a for-profit business venture, which Matafonov laments. It is how these profits are collected that should be scrutinized — by legislative monopoly or by consumer choice. And unfortunately, the only reason why competition is limited in this industry is solely because of government regulation.

Besides, isn’t Copowi in the business of staying in business, or are its investors not wanting a profitable return on their capital?

Shaping the network, shaping the debate

So while Copowi could certainly be lauded for its entrepreneurial efforts, their philosophical underpinnings are misguided.

And to respond to Matafonov’s note card presentation, this issue really is about who controls the market – free enterprises or bureaucratic governments – because those are the only two players involved.

See also: What to Think About Reregulation and Network Nationalization

{ 3 comments }

Ian Swift August 20, 2007 at 4:57 am

I read a prediction somewhere that cell phone companies will start to include advertisements in place of the songs you hear when you call people, but would offer much cheaper/free phone services. The prediction went on to say that it was likely that you would be able to get conventional ring, but for a higher price.

This is along the lines of what I see happening with net neutrality. I’m guessing Copowi will gain mild popularity, but eventually be run out of business when the more successful internet service providers catch on and offer net neutrality as a feature that costs extra.

Anthony August 20, 2007 at 5:48 am

Thanks for the article.

David C August 21, 2007 at 12:51 am

The ironic fact is that controling the flow of content on the internet is impossible. Not only can content change forms from text, to graphic, to sound, but it can also be encrypted. At the very most, they can throttle specific port numbers and sites – but that is also doomed to failure (eg, an encrypted p2p video services that distributes from different ports and sites) IMHO, the net neutrality debate has nothing to do with net neutrality and everything to do with corporate battels between old telecom and new telecom. It’s sad that “new telecom” thinks the net neutrality regulations will help them, it may in the short term – but not likely in the long run.

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