Why is no one here mentioning plug-in laws? With proper governance (ie: laws) we can remove the market externality that exists in the natural monopoly of telecom infrastructure. These laws force all infrastructure owners to sell access at bulk rates (like a T3) that allow new ISPs, etc. without any burdens (ie: throttling). Most people would pick the independents without restrictions.
Net neutrality, as it's currently setup, makes it too easy for companies to influence the law. Plug-in laws are at work in many developed economies, and are more subject to market forces due to the competition for bulk rate product.
All the problems mentioned arose because WU was a monopoly. But, why was WU a monopoly?
Telegraph lines could only be installed profitably along railroad lines. Thus, the railroad companies could create a situation where there could only be one telegraph company--a monopoly.
Why could telegraph lines only be installed profitably alongside railroad lines?
Well, one could lay telegraph lines through the countryside fairly cheaply, but the problem is: high taxes on the land you're using, government not allowing you to bury lines below roads and other obstructions, and similar regulatory issues.
In other words, there were no non-regulatory reasons one couldn't set up a competing telegraph company (at great profit, if it's true that WU charged exorbitant prices and spied on your messages).
Likewise, in the modern telco industry, there are government-granted monopolies to certain companies like AT&T and Time Warner through regulatory means. E.g. typically, only one company is allowed to install communication lines in a given area.
Doing away with government-granted monopolistic regulations is the solution. Consider what happens if the other route is taken.
The other answer is to have government more heavily regulate the existing monopolies - which will lead to abuse and corruption. If you allow for excessive regulation, you have the recipie for the problem cited in the article: government and certain companies will conspire with each other, to everyone's detriment. It's already happening with AT&T and the US government (consider the extra/quasi-legal spying AT&T has done for the government), and it will get worse under net neutrailty.
> Doing away with government-granted monopolistic regulations is the solution.
I have no prescriptions, but I do observer that the grantor and grantee are typically two hands of the same will. That monopolies are granted because the grantee wants it, and has found ways to make it so. How do you do away with that?
Capitalism is premised on the concentration of wealth to fund capital-intensive investment. Given the concomitant concentration of power, how do you prevent regulatory capture and the general perversion of government? How do you dilute power and preserve the system?
There is nothing to prevent a sufficiently influential grantee-to-be from creating a grantor. In fact, I believe this is the origin of many regulatory bodies and government powers.
If you limit the power of the government, wouldn't this then simply shift the balance of power to private individuals and corporations?
Then instead of abusive governments, we'd have abusive companies.
I mean the government takes certain powers away from private citizens in order to prevent us from abusing these powers (murder, fraud, etc).
I agree that there are probably regulations that impede competition from performing ideally, but sometimes it is necessary, like in the public utilities. Some of these things simply can't work as well if we have multiple companies trying to screw each other over.
Certainly the argument is valid, at least theoretically, that if we do not codify net neutrality, and deregulate the internet business, the companies that favor the consumers the most (most likely the net neutral ones) will dominate in the end, but there are other issues that come in practice. Who gets to create infrastructure (cables and stuff) through the ground when there are hundreds of them? Imagine if we privatized electricity. We'd have multiple powerlines everywhere. It'd just increase overall waste. Or perhaps radio wave broadcasting were to be deregulated. Nothing would function. There are potential problems if we don't regulate the ISPs and let them all duke it out. Sometimes the sum of the whole does not equal the parts.
> high taxes on the land you're using, government not allowing you to bury lines below roads and other obstructions, and similar regulatory issues.
Citation?
Honestly, I'd think that the main reason that telegraph lines could only profitably be installed along railroad lines would be because of maintenance concerns.
Unfortunately, I don't have a citation on this. I'm just appealing to common sense.
If there are no regulatory barriers to providing some service, someone will do it, when they are able to do it profitably. Which means that they'll do it when it's actually worth doing.
If there were no regulatory monopoly on creating telegraph lines, WU wasn't really that bad, and it wasn't really needed/worth it. (After all, the article does not make a case that WU successfully manipulated the election.) However, I think it's far more likely that there was a regulatory monopoly, as there is for modern telecoms.
Lines (power, telegraph, gas, etc) are generally run on easements purchased from the underlying landowner. Right-of-ways and property for railroads were often government-granted, so it was easier to negotiate with the railroad for an easement for a telegraph line than with a few thousand individual landowners, any one of which could easily raise your costs by refusing to allow you to go through their land.
"government not allowing you to bury lines below roads and other obstructions"
In the 1800's this was not really a big problem. Besides, telegraph lines generally ran on poles.
Very cool article. As someone who's very much for small gov't, net neutrality has been a really hard issue for me, personally, as it's making another law to ensure more freedom? Those two concepts are kind of hard to fit together sometimes.
Ahh, but see, what if we also took away the laws which governed who could run a Telco?
For example, there's cases where cities have been forced to remove their free wifi networks.
The technology exists now to make (slow, but) free wifi mesh networks among citizens. If anyone can make An internet, then who cares if The internet is no longer neutral?
Laws enforced against deceit and theft and murder help freedom. Laws dictating what's legal to sell, at what price, not at all.
The FCC that would enforce "neutrality" also enforces "indecency" rules and has in the past required a minute-for-minute accounting and balance of political expression -- the "fairness doctrine". There is reason to doubt whether neutrality laws would be freedom-promoting or welfare-promoting, in the long run.
How well did "rail neutrality" work, in the long run? See:
How about laws requiring that ISPs be 100% transparent with all filtering/throttling/etc that they do with company-crippling penalties for avoidance (instead of laughable penalties that large companies will just write off as the 'cost of doing business')?
edit: Thinking more about this, ISPs would just bury this information in the EULA in obtuse legalese so that normal users would ignore it or at least have a hard time understanding it. Then they would be in the letter of the law, but not the spirit and they would still get away with stuff. Though it would help in places like taking the ISPs to court (as right now what happens on their network is essentially a blackbox and when there's a problem they can just shift the blame to someone outside of their network and there's little you can do to prove/disprove that).
> Laws enforced against deceit and theft and murder help freedom. Laws dictating what's legal to sell, at what price, not at all.
Laws are far from the only way to restrict what is sold to the public. Large corporations can leverage their market share to shut down competition in other areas. In order to maintain a healthy market place, you have to ensure that a market is not completely controlled by a few large corporations.
A simple way to do this would be to limit some of the advantages of a corporation, which is itself a state-created entity. I've no problem with government limiting the freedom of its own creation which enjoys unlimited life, limited liability, tax advantages. I do have a problem with government restricting the freedom of individuals and partnerships to contract freely in the marketplace.
I think the problem still remains; a free market does not necessarily mean it is an optimum market, and the government is not the only factor that can adversely affect a marketplace.
...you have to ensure that a market is not completely controlled by a few large corporations.
Maybe. But if so, that's an argument for antitrust enforcement, not net-neutrality type-and-price-of-service regulations.
As the example of regulatory capture in many industries should make clear, regulations often turn out giving an advantage to the few large operators who can play at Washington rulemaking games -- with large staffs of lobbyists and big donations at election time -- no matter what the regulators' initial rationale.
Isn't net-neutrality a form of antitrust law? Net neutrality is essentially a way of stopping corporations from using their influence over communication lines to unfairly affect other markets that use those communication lines.
Usually laws restrict what individuals can do, limiting thier individual freedom, to provide what will (hopefully) be a better situation for the greater good.
But companies are owned and run by individuals, so you're interfering with an individual's ability to run his company as he sees fit.
But governments are run by individuals, so saying that they aren't allowed to pass such-and-such a regulation means interfering with the individual's ability to run their government the way they see fit.
The notion of "absolute freedom" suffers a stack overflow if you actually try and think about it. Any action whatsoever, not merely government regulation, reduces the freedom of some people and increases it for others.
> The notion of "absolute freedom" suffers a stack overflow if you actually try and think about it. Any action whatsoever, not merely government regulation, reduces the freedom of some people and increases it for others.
Yep. But this isn't neccessarily about 'absolute,' it's about "minimal as possible," at least in my eyes. As I said to someone below, I prefer to fix problems after the fact, rather than before, but I feel like this will almost certainly be a problem, so why not just cut to the chase?
I believe in a democracy+capitalism gov't has to be as large as necessary and no larger. We cannot always say that gov't has to be small, it has certain duties one of which is to make sure, through legal means, that the system does not destroy itself. Once we agree that net neutrality is required for healthy capitalism, what possible ways are there to guarantee it other than a meaningful amount of regulation. It is in the same vein as regulation needed to prevent monopolies.
EDIT: Holy crap, everyone. Please refer to my two responses just below about the reason I said "Ideally." This statement is in response to "what possible ways are there to guarantee it other than a meaningful amount of regulation." So I gave one.
I will define "market" for you. A "market" is a set of human beings interacting with each other freely, voluntarily, and without coercion.
So, to say that "the market" will take care of something is equivalent to saying that a set of human beings interacting with each other freely, voluntarily, and without coercion will take care of it.
Just like how the market prevented crap like Enron? Just like how the market punishes companies that dump toxic chemicals into waterways?
I'm sorry but the idea that the market will solve every problem the world could ever dream of is a ridiculously out-of-touch-with-reality idea. Though the idea that Congress can come up with laws to solve even one problem without creating side-effects is equally naive.
The 'market' can be gamed, and there are plenty of people that make a career out of it. As long as you can bury the truth in bureaucratic nonsense and hide behind diffusion of responsibility you can get away with practically anything.
There's a reason I said "Ideally." I don't think it would work that way, hence my support of Net Neutrality. But I still like to think long and hard about restricting market forces, and so I'd almost rather wait until the market is proven unable to handle it before enacting legislation, rather than doing it pre-emptively.
Exactly what I said. In a perfect world, nobody would buy internet service from a company that's not a dumb pipe, because this [1] wouldn't be in a consumer's best interest as opposed to a competing company that's a dumb pipe. And if things worked the way they were supposed to, if the industry colluded to cause this to happen, we could either break it up, or new players would enter the market, and people would flock to them, putting pressure on the other companies to stop being restrictive.
But there's a reason for the first word of my statement.
"we could either break it up".. aka, the market not handling things at all, and government intervention being necessary.
There's a whole set of well-defined problems in which everyone following their individual interests, the "invisible hand" so to speak, lead to a clearly terrible situation -- monopolies, prisoners dilemmas (collusion), tragedy of the commons (pollution, resource extraction, public education)..
Talking about how "ideally the market would take care of those problem" is just silly, the market will categorically not care about those problems -- it's not an intelligent force, just a sum of individual actions.
I hate my health insurance company, cable company and cell phone company -- what are my options here in this supposedly free market, start my own multi billion dollar nation-spanning infrastructure?
Some might see your analogy as backwards, especially if they view individual freedom as having natural bounds which are easily identifiable to mentally stable humans. I have a feeling that's why you were voted down (not by me, sorry). An example of this line of reasoning: http://en.wikipedia.org/wiki/A_Theory_of_Justice
Net neutrality, as it's currently setup, makes it too easy for companies to influence the law. Plug-in laws are at work in many developed economies, and are more subject to market forces due to the competition for bulk rate product.