Barry Fagin, Featured, Politics

Net neutrality a big government solution in search of a problem

Once again, “net neutrality” is bouncing around the blogosphere.  President Barack Obama recently called for the Federal Trade Commission to regulate Internet service providers like telephone companies, citing concerns about ISPs “picking winners and losers in the online marketplace.”

Nobody, to my knowledge, says that is actually happening. But it might someday, so Washington should do something.

The Internet works by transmitting electrical impulses known as “bits,” organized into groups called “packets.” The Internet’s real power, however, is a standard set of rules developed by the Defense Advanced Research Projects Agency back in the 1960s. These rules guarantee all machines that obey them can communicate with one another. Hook them together, run the right software, and you get the Internet.

icon_op_edAll Internet packets are fundamentally the same. A packet neither knows nor cares whether it’s part of a website, an email message or an encrypted signal vital to national security. In that sense, the Internet is quite neutral. However, when it comes to the Internet, we humans are highly partisan. Human beings treat Internet packets in a highly discriminatory manner.

Some packets on the Internet can stroll over to us in their own sweet time. Take email, for example. Sure, we’d like to get our email messages instantly, but if they take milliseconds, seconds or even minutes to get from your house in Hershey to your pal in Petaluma, chances are you don’t really care. After all, the Postal Service takes days to do the same thing.

But our passions are hardly neutral for packets that are part of streaming video. If you’re watching Indiana Jones maul a menacing mob of mummies, your eyeballs want those packets coming at you at dozens of megabits per second. They also need to get there in the right order, on time, every time. And there, as Shakespeare might say, is the rub.

Getting packets of electrical impulses from point A to point B, whether A and B are on different blocks or different planets, is actually a solved problem. Which, when you think of it, is kind of amazing. However, getting them there faster and in order is different from getting them there slower and putting the pieces together later. Achieving a lot of bits per second, what we call “bandwidth,” is harder. It takes more work. It takes more resources. In other words, it takes more money.

That’s why ISPs charge more money to get packets to you faster. Lower bandwidth connections are cheaper, higher bandwidth costs more. This bothers people, and not only the usual suspects on the left who think charging market prices for anything is by definition evil.

Video content providers like Netflix don’t like having to pay for the high-bandwidth connections necessary to get their product to consumers. So why should they, if they can get favorable regulation instead? Net neutrality, which attempts to ban bandwidth price discrimination, is little more than a form of corporate welfare for high-bandwidth content providers like Netflix and YouTube.

Neutrality advocates are worried that ISPs who own content providers (Comcast owns NBC) could provide special treatment for their streamers at the expense of competitors.

Before we cripple the greatest economic success of the past 50 years, can we see if this problem actually ever happens, then maybe ask if the benefits of regulating it are worth the costs? Or, if we’re really worried about it, can we simply require transparency of ISP bandwidth pricing?

Sure, ISPs are often enormous corporations themselves. They got that way as beneficiaries of exclusive monopoly franchises granted to them by state and local governments. But the solution to that problem isn’t to make government still more powerful. That doesn’t make any sense.

Net neutrality is the politically strange bedfellow combination of the fairness-obsessed left and the corporate-welfare-junkie right. Sure, markets aren’t perfect. But anything emerging from the union of those two is bound to be far, far worse.

Barry Fagin is senior fellow in technology policy at the Independent Institute, a free market think tank in Denver. Readers can write him at barry@faginfamily.net.  A version of this article originally appeared in the Colorado Springs Gazette.

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