Wednesday, May 10, 2006 - The Progress & Freedom Foundation Blog

Way Off Target

Craig Fields, director of Internet operations for the Gun Owners of America, has a commentary supporting Net Neut* posted on the Conservative Voice web site. If he has a gun, let's all hope that he can shoot straighter than he does in this errant piece. Maybe there are times (very rare, I suspect!) when it will make sense for conservatives to jump in bed with But on this occasion, Craig and his fellow GOA'ers should put their guns back in their holsters.

The fundamental problem with Fields' argument for imposing Net Neut* regulations is that he still apparently believes, or wants us to believe, that we are living in a narrowband world dominated by the old Ma Bell. Wrong, Craig. We now live in a broadband world charaterized by competition enabled by rapidly emeging and developing new technologies. Despite the fact that the FCC has made this competitive finding countless times, there is not a word in his essay about competition to the telephone companies from cable companies, wireless companies, satellite providers, and emerging powerline companies. Not one word.

Here are a few of the more egregious errors in Fields' argumentation:

* While he focuses on the old common carrier rules that use to apply to "Ma Bell" in the narrowband world, he neglects to mention that cable companies, which have the largest share of the high-speed broadband market, have never been subject to Net Neut* regulation. He doesn't explain why there are no complaints that the cable companies have acted in an anti-competitive manner.

* Several times he justifies Net Neut* regulation by saying, "as long as the government is setting the rules for a handful of companiues," the rules should include NN mandates. He has this just backwards. The government has decided that in the broadband environment, in light of the competition among telco, cable, wireless, satellite, and other emerging competitors, that broadband companies should not be regulated as common carriers were regulated in the narrowband world. In other words, he perversely justifies imosing new regulation by assuming -- wrongly -- that the government is presently "setting the rules." This is hard logic to follow. And, in any event, if the government were presently setting the rules, conservatives should want to remove them.

* Several times he analogizes the Internet to interstate highways, and he wonders whether if AT&T owned I-95 it would prefer Wendy's to Burger Kings, maybe relegating Burger Kings to inferior or no locations. This analogy illustrates the tragedy of Fields' argument. While there is a lively debate occuring about whether the public would benefit in many ways (including through the introduction of new technologies) if government allowed more competition in roadbuilding (ie., more privitization of roads), constructing and maintaining highways has generally been viewed as a government function. Not so with our communications networks. True, Ma Bell was heavily regulated in the earlier monopolistic era in which Fields remains stuck. But in today's competitive environment, there is no need to convert broadband networks that were built with billions of dollars in private capital into government-managed facilities, with all of the unnecessary associated regulatory costs and error costs of government misjudgments about the direction of future technologies.

There are certainly instances in which the benefits of regulation outweigh the costs. But when markets are workably competitive, conservatives (at least principled free market conservatives) prefer not to have the government step in and dictate the rules. You would think that conservatives would not want to turn over privately owned and operated broadband networks competing vigorous in a rapidly changing, technologically dynamic marketplace to government control. That's a recipe for deterring the investment and innovation that otherwise will keep the Internet vibrant and robust.

I believe that imposing anticipatory broad-brush mandates preventing any differentiation of services on the net will diminish investment in new high-speed facilities and innovative applications, thereby neutering the net. So, in my view what the proponents of new Internet regulations are arguing for is Net Neutering, not Net Neutrality. Henceforth, I refuse to go along with the name game the Net regulators are playing by accepting the use of the "neutrality" claim. I say it's Net Neutering. But in the interest of being, uh, neutral, I am willing just to refer to the issue as "Net Neut*" with the universal asterisk indicating anyone can complete as they prefer ....That way, maybe we can strip the emotion out of the debate, and look at the economic realities.

posted by Randolph May @ 10:25 AM |