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Friday, February 3, 2006

Net Neutrality and Kelo
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In Kelo v New London, the Supreme Court took a pass on applying the Takings clause to a condemnation action that transferred private property between private entities, all in the name of "public good." As a matter of Takings law, the result was unremarkable and consistent with previous Takings jurisprudence. Fortunately, the case has triggered a backlash, and widespread condemnation of this use of condemnation.

With Net Neutrality, the advocates support the comandeering of privately-constructed, privately financed broadband networks -- and the proscription of any business arrangements except those they favor. Not only does this damage the investment incentives in networks, it amounts to a wholesale weakening of property rights -- with the normal rights of ownership being lost. Like Kelo, the political economy, or rentseeking, aspects of this diminution in property rights loom large.

To be sure, there are differences between Kelo and 'net neutrality.' To begin with, those whose property is being comandeered are not sympathetic families, but large communications companies. Moreover, a regulatory takings claim makes success in Kelo look easy. All that said, if Kelo alerted people to the basic justice inherent in respecting property rights, it should apply here too before the government blithely decides to interrupt the private ordering of markets with its judgement about which types of arrangements are permissible.

posted by Ray Gifford @ 11:21 AM | Net Neutrality

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