Fighting for Net Neutrality

Michael Rebmann over at North Buffalo Journal and Review is fighting the battle against net neutrality. He posted a video from NetCompetition.org to aid in his argument that the government must remain hands-off in this debate, no matter what. Now I understand that Michael’s a Libertarian, and while I agree with many aspects of the Libertarian philosophy, this particular debate is an example of why the lack of government intervention can sometimes hurt capitalism.

I commented…

Did you bother to read NetCompetiton.org, the site that produced that video? While they spout off things about Net Neutrality being “corporate welfare for dot-com billionaires” they’re backed by “small” companies such as… AT&T, BellSouth, Verizon, Sprint, and Time Warner.

There are two sides to the Net Neutrality debate, and there are big companies on both sides. But in this particular fight, you have to look beyond that point to see where the real contention is… and that is with what the possible effects of the lack of this legislation are – and that’s allowing the big telecom companies the ability to control who gets the fast lane and who gets the slow lane.

You like Flickr but use Verizon DSL? Sorry. They couldn’t cut a deal. You get bumped to the slow lane. Instead, try the new super-fast Verizon photo hosting service. Sure it has a third of the features and a clumsy interface and no other ISP has worked out a deal with Verizon to move them to the fast lane, but that’s ok. All your friends use Verizon too, right?

Michael responded…

There is absolutely no evidence that the telecoms or cable companies are going to leverage their service to give them a competitive advantage. There are already FTC laws to address that. Read the first post I made and follow the links in it. I have been reading about this issue for quite a while now. I originally thought net neutrality was a good thing. The more I learned, the more my opinion changed.

The simple fact is that improvements in speed and service availability are provided by private companies. They have to recover the costs. If they can’t have the ability to allocate costs based on usage, there are only 2 alternatives. One, service improvements and innovation will suffer. Or, two, the internet subscribers will pay these higher costs.

ISP are not going to unfairly use this ability to their competitive advantage, too many consumers are able to switch providers if this happens. Competition would keep things under control. Verizon will soon be introducing FIOS here for about the same price as regular dsl. That spent millions of dollars upgrading to do this. Someone will ultimately pay the costs. It will either be you and I or it could be companies which require huge amounts of bandwidth for their everyday operations. I as a consumer do not think I should have to support a service I do not use. Let the companies pass the costs of doing business on to the people using that business.

It is no different than me willingly paying Flickr for a pro account. It is a service I use, value and pay for. The government can not effectively legislate the value and price of a service. That scenario always results in unintended consequences and bad results.

The government’s role here is not to regulate the price of a service, it’s to determine what is the most fair way to allow access to a multitude of information and services, regardless of what company is providing it. It surprises me that a Libertarian of all people can’t see that the tactics the big telecom companies are using are using here are basically the same that our favorite union cronies use all the time – tell people that their prices will go up and that quality of service will go down if we don’t get our way.

To respond to a couple of Michael’s specific arguments… “There is absolutely no evidence that the telecoms or cable companies are going to leverage their service to give them a competitive advantage.” The competitive advantage here isn’t to aid them in the fight amonst themselves, it’s simply to redistribute the wealth from the information providers to the pipe providers. The telecom companies have been struggling with tight competition for years and are running out of ways to squeeze a few more pennies out from the bottom line. Meanwhile, these little pissant startups like Google and Yahoo and eBay are raking in billions and “all they’re doing” is sticking a bunch of eggheads in a room to punch out some intangible product that uses their physical hardware. Well, if you can’t beat ’em, lobby against them! What better approach to take than to fight for some regulatory changes that will allow them to shift the wealth without actually having to do any work? Meanwhile, who will get hurt? Not only the big established application providers like Google and eBay and Yahoo, but also the small startups who’s success has relied on their being a fair and balanced system to provide access to their content – like the YouTubes, MySpaces, and even the various blogging platforms such as Blogger. Many of these innovations would have a much harder time getting off the ground if they’re relegated to the “back alleys” of the internet. Think of your local business district and how most often the businesses that thrive are the ones on the main strip, and the ones that struggle are the ones that people have to go a block or two out of their way for.

Verizon implemented FiOS not as an altruistic gesture – they did it because they saw that they needed a competitive advantage over copper carriers and satellite and cable television companies. The current environment is what drove them to develop such a system, the reason it’s priced competitively with their own DSL services is that they know if they can get people using their “tube” they have a foot up on the competition to provide all your data and telecom services in one. Net neutrality has no bearing on that offering, as development and deployment began long before this debate picked up steam.

Finally, the costs always get passed on to the consumer. Either your ISP is going to raise it’s rates, or the services you use will all begin instituting new fees. YouTube would become pay-per-view. Blogs might institute subscription fees. Most of your favorite sites would have to institute some sort of fee or charge so they could stay on Main Street. The market is still going to dictate how much you are going to have to pay. The legislation is going to determine who you’re going to pay.

Consider joining the Net Neutrality fight tomorrow at noon. Details available at WNYMedia.net

Please plan on joining us Wednesday, 30 Aug 2006, 12:00 PM
Senator Schumer, Support Net Neutrality
130 South Elmwood Ave
Buffalo, NY 14202