-
Website
http://techliberation.com/ -
Original page
http://techliberation.com/2008/07/30/network-neutrality-is-not-about-price/ -
Subscribe
All Comments -
Community
-
-
Top Commenters
-
Popular Threads
All Comments
Two questions though:
As I’ll argue in my forthcoming Cato Policy Analysis, the best reasons to oppose network neutrality regulation isn’t because network neutrality is a bad idea (it isn’t), but because network neutrality opponents (1) overestimate the fragility of network neutrality and (2) underestimate the unintended consequences that are likely to flow from new regulations.
Isn't the threat of possible net-neutrality legislation one of the things that keeps net-neutrality non-fragile?
Second, is this discussion becoming too-US centric?
While I would agree that the point can sometimes be over-stated by some free marketeers -- including perhaps the WSJ yesterday to some small extent -- I think it is perfectly valid for us to raise questions about the potential interpretation of Net neutrality rules once they might be put on the books. In particular, that would include the potential pricing rules that would evolve out of the system. After all, as you point out in your forthcoming Cato piece on the issue, one of the best reasons to be skeptical of NN is because proponents of new regulations "underestimate the unintended consequences that are likely to flow from new regulations."
Why then would it not be sensible to question the potential pricing rules that might flow from such rules? After all, we have a century's worth of regulation that makes it clear that pricing issues always become part of the equation and eventually do get regulated. Therefore, I do not think it unfair for one to call into question the language of current proposals (like Snowe-Dorgan) and ask whether that language provides the foot in the door for government to regulate all broadband pricing more comprehensively.
Here's how I put it in an old essay on the subject:
So, in conclusion, I am not trying to be an "amateur network architect" and claim that one sort of business practices or pricing model makes more sense than another. Quite the opposite: I am trying to make sure that FCC bureaucrats are not in a position to become the "amateur network architects." More importantly, I am trying to make sure they do not come to have the authority to use price as a regulatory weapon and make determinations about who can charge how much for whatever comes along in the future. And the reason I feel passionately about that is because we have solid historical evidence that points to the innovation-killing potential of price regulation once it is allowed on the books.
As a free-market social scientist, am I allow to say that? Or does that make me look "silly"?
The Journal is making a stronger claim: that network neutrality proponents are advocating a ban on price-based congestion-control mechanisms. This is just not true. I don't think I've ever heard a network neutrality advocate argue that content-neutral metered pricing or bandwidth caps should be illegal.
As for the "amateur network architect" comment, I wouldn't include you in that category, but one example of the sort of thing I'm talking about is Bob Hahn and Scott Wallsten's paper in which they argue:
I won't get into the details of why I think this is wrong, but notice this isn't an argument about the unintended consequences of regulation. It's an assessment about the best way to organize the Internet. They're putting forward the view that the Internet's current structure is inefficient (although they do admit that "debate is unlikely to be settled anytime soon.") and they go on to tout various alternative pricing schemes that would require re-engineering the Internet's basic structure. I think they're wrong on the specifics—the pricing schemes they advocate would cost far more to set up than they'd yield in reduced congestion—but more generally I think people of a free-market bent should be careful about second-guessing the structure of a market like the Internet backbone that has evolved out of fierce competition.
But Adam is also correct that, even if today's advocates of regulation limit their demands to traffic management procedures, it's not hard to see to see how regulation could evolve to cover the pricing of consumer broadband offerings. To be fair, I agree with Tim that it's hard to see how one could reach such a conclusion based on, say, the four principles contained in the FCC's 2005 policy statements. But that hardly means it won't happen.
I think we're all in agreement that pricing broadband more intelligently (e.g., charging per GB above some very high monthly GB threshold) would fix the current tragedy of the (unmetered) commons. But nearly every time I have explained this idea to a lay person as a "third way" solution to the net neutrality debate, I have gotten the very logical question: "Would that violate net neutrality? Isn't that 'discrimination'?"
My point is simply that it's easy for these issues to be conflated in the public mind--and Adam is certainly right to fear that they very likely will be on the Hill or at the agencies if we continue down the road of net neutrality regulation.
It's possible, but that's not the focus of my paper.
Second, is this discussion becoming too-US centric?
I live in the US and work for a US think tank, so my perspective is inevitably going to be US-centric.
"What network neutrality proposals are designed to do, rather, is to prevent ISPs from dealing with congestion using non-price, content-based routing policies"
unfortunately overlooks the essence of what NN regulation is really about as far as commercial entities are concerned, i.e., profitable online properties don't want to be asked or obliged to negotiate service agreements with network providers in which they agree to share some of their profits with network providers for the upkeep of the Internet and for the improvement of the overall online experience -- just like retailers in a shopping mall share a small percentage of their profits with the landlord.
NN regulation also fulfills a utopian vision, of course.
With respect, their is a role in this debate both for engineers and for social scientists.
NN advocates have for several years now wanted to force service providers into one business plan where the end-user pays ALL the costs of the network. It would be like forcing magazines to charge $500 per year for a subscription and forego all advertising, or ordering Google to charge for search rather than use the advertising model. Who knows? Maybe end-users will end up paying most of the cost of the network. Fine by me. But we should let the market find the way in this dynamic arena.
NN is bad precisely because it interrupts the very private negotiations and experiments by network innovators that Tim rightly lauds. I agree we want to keep *that* model, not one where architectures and prices are preemptively -- and peremptorily -- decided in Washington.
Net neutrality proponents want to change the fact that there is no law or regulation preventing what they fear (and that "fear" changes daily and they can't define it.)
At core, net neutrality is about the core belief that a Government-directed/guaranteed Internet is superior to a free market Internet.
We also know that the strongest voices and proponents behind net neutrality regularly seek government regulation/coercion to deliver their desired outcomes.
What I find most outrageous is the purposeful doublespeak of adopting libertarian/conservative WORDS while cynically not embracing the VALUES of what the words mean.
Net neutrality is not "Internet freedom" it is government coercion, plain and simple. The reason I call net neutrality proponents on their cynical use of rhetoric, that they know is misleading, is that fighting for Libertarian/Conservative values is what's important not consensus around words.
I agree with Adam, and with all due respect to Tim, it is important to look past their deceptive word choices that they throw around -- and examine closely the values/ideology embedded in their ideas/proposals and the end results that they seek. Neutralism, the emerging ideology behind Net neutrality is not Libertarian/individual-centric -- its socialist/government-centric, because it relies on coercive Government and not free individuals to get to the right place.
Scott Cleland, Precursor, NetCompetiton.org
As I have mentioned in other posts, congestion management is a valid concern. The problem is that we never know whether certain activities taken by corporations to resolve congestion management are really legitimate concerns or simply "dirty tricks". CNET reported in July 2006 that "The suit accuses Cingular of engaging in a "deliberate scheme" to degrade the service of those AT&T subscribers in order to command "significant additional charges" for improvements such as requiring the purchase of a new Cingular phone, payment of an $18 transfer fee, or entry into a contract that was "less favorable" than the subscriber's existing AT&T plan."
True, it is good to be suspicious of government, but it is also equally true that you should be suspicious of corporate "promises". A quick search of the internet will quickly disclose many instances were corporations have actively and with purpose failed to deliver packets. How would you like it if you pay the Post Office to deliver a package and instead of delivering they toss it into the garbage with the lame excuse that there was no truck available to deliver the package. So the fundamental concern with net neutrality is a guarantee that your packets will be delivered. Those opposed to net neutrality don't seem to want to guarantee that a consumer will have a right to have their packets delivered.
For those opposed to net neutrality, instead of chanting "No Regulation", why not offer an industry code of conduct to guarantee packet delivery?
With freedom comes responsibility. If corporations want freedom from regulation, act responsibly.
This is partially because Libertarians have a hard time thinking of corporations as bad actors (note I didn't say it was IMPOSSIBLE, I said "have a hard time").
The content companies (Google, etc). don't want the teleco's to play the content companies off against each other in auction-style pricing and exclusive "partnership" agreements.
Google, etc. ARE NOT LIBERTARIANS! Thus, they have no trouble lobbying for laws to make the telco's desires above, be illegal.
Everything is a sideshow for this argument, because this argument is where the money is, BILLIONS of dollars.
It's not about charging different prices for different levels of service. Instead, it's about once a price is set, any customer must be able to buy at that price - i.e. no auction pricing, no exclusive "partnerships".
The irony of this all is that I think the Liberbabblers are ultimately right that the free market would solve it eventually. But a lot of money can be wasted until then, and Google, etc. are not going to stand for the teleco's extracting it from them.