Net Neutrality is one of the most contentious topics on the internet, largely due to the fact that it directly effects internet users and ISPs alike.  While many tech moguls and blogosphere titans are virulently pro-Net-Neutrality, their opinions are lacking in nuance and are heavily influenced by the interests of some of the internet’s largest players.

Before jumping in to opinion, however, let us consider some facts.  For starters, Net Neutrality is not a policy or piece of legislation; rather, it is a set of regulatory powers granted to the FCC by the Obama Administration, allowing it to use 1934 communications legislation to regulate the internet “in the public interest”.  The specific regulations in place today essentially prohibit Internet Service Providers (ISPs) from having the ability to tinker with network speeds. Additionally, these regulations create “rate-of-return” regulations, which hold a cap on profits of ISPs in exchange for protection from competition.  These regulations have empowered ISPs as profitable institutions, while simultaneously stunting potential development of new means of Internet bandwidth distribution.  This means that big ISPs are guaranteed profits, and that smaller ISPs have a de facto barrier to entry.

The first problem with Net Neutrality is that it gives the FCC undue power.  The FCC was and is fundamentally a communication department, created to ensure airways were clear enough for unhindered government wartime use and lack of radio piracy.  This made sense in the 30s, where a rogue broadcaster could have created his own signal to disrupt a legitimate station.  It continued to make some sense in the age of analog TV, where signals had to have protection for the sake of legitimate TV channel owners.  The internet, however, is fundamentally different from those two mediums because of the fact that there are no natural limits to its size, and therefore no limits to the amount of bandwidth one could consume.  Therefore, FCC jurisdiction over the internet is founded upon shaky legal language.  Even conceding the limited nature of ISP competition (due to the fact that in-home internet connections are likely to be accessible to only 2-3 ISPs), one still finds that regulation of ISPs should fall to Congress.  Indeed, a more economically beneficial ISP regulation might take the form of subsidies for the extension of competitor ISPs into monopolistic or duopolistic territories.  Another strategy could be to allow local governments to treat internet lines as utilities, giving flat rates for ISPs and giving them the opportunity to compete on level ground.

Examining the specific arguments for Net Neutrality, one finds issues as well.  The most common fear of the pro- crowd is that corporations will throttle speeds, place limits on bandwidth usage on competitor sites, or provide favored bandwidth ‘fast lanes’ for certain sites.  However, what most consumers do not understand is the extent to which this would likely be implemented and the extent to which these practices might be beneficial.  First and foremost, the favoring of internet speed for one or two sites will not be absolute.  Companies understand the unpopularity of tinkering with speeds, and would be likely to do so in small, marginal amounts if at all.  Second, it is clear that companies will have many clients desiring faster speeds, even at marginal differences (due to the fact that marginal speed differences can aid in preventing crashes when sites are overwhelmed with visitors).  Therefore, it will likely be expensive to broker a deal for faster site speeds, meaning that it would be impractical for any extreme changes to occur.  Thirdly and most importantly, ISPs would be stupid not to offer a baseline speed guarantee for all websites.  The constant growth of the internet means that a baseline speed for any and all new sites is a necessity for a functioning ISP.  Now, all of these are admittedly hypotheticals.  However, they are hypotheticals because I am not an Internet Service Provider insider.  Since the market has been prevented from experimenting with pricing models, speed variation, and lateral deals between sites and providers, it is unknown what the future will look like free from these overbearing regulations.  What is known is that markets tend to work: they cater to consumers, and react to public and private market pressures.

Consumers, meanwhile, have reason to be excited about the repeal of these costly regulations.  Consider the example of Netflix.  Netflix uses a lot of bandwidth with millions of users drawn daily.  With lateral deals to pay, say, Comcast for increased speed, frequent users of Netflix might find reason to switch to Comcast.  Meanwhile, both Comcast and Netflix might find lower prices for their customers.  Comcast receives payment from Netflix, making Comcast less dependent on customer bills for profit margins.  Netflix, having invested in higher speeds, requires less intensive R&D for streaming efficiency. Higher speeds, though likely marginal, never hurt the consumer.

While one might note that personal internet usage is diverse, it is important to note that internet usage by time is not the same as bandwidth.  Wikipedia and Facebook don’t use as much bandwidth as YouTube or Hulu.  Most people spend a majority of bandwidth on a handful of bandwidth-intensive sites.  Further, there are a few sites that tend to take up lots of our time: Facebook has about 77% of the social networking market, Google 80% of the search engine market, and Amazon 70% of e-book sales.  Even if one feels that the amount of time on a site is more relevant than the amount of bandwidth one uses, we have to remember how un-diverse internet use is in the big picture.  Simply put, consumers have already created an internet usage topography that would benefit, with little drawback, from ISP-website deals.  The internet may, in the future, face issues stemming from the oligopolistic nature of ISPs and the market-cornering of online giants.  The answer to these problems must be thought out and careful—options could include forced breakups or tax credits for competitors—but it must never be an answer that fundamentally restricts the market processes of the internet.

So, through the paranoid obsession with this vague, complicated standard of neutrality, we have stunted market processes and hurt consumers.  Those who cry that Net Neutrality is essential have good intent: they believe that the internet should be kept free of malignant meddling.  However, they forget not only the extent to which the government has been given power over the internet, but also the extent to which the Internet is a great experiment in emergent order.  On the internet, data are gathered from choices and funneled into advertising, connections are made between sources of information to grow knowledge, entertainment is custom-made, and businesses directly hear the feedback of consumers.  All of this organization cannot be regulated with an iron-fist in the name of ‘fairness’; indeed, it is good that when Googling “Burkina Faso”, the revelant Wikipedia article comes before a 15-year-old post on a nationalist forum.  Similarly, it would be good for certain websites to have ISP speed favor, especially given the fact that competition between ISPs means that baseline speed guarantees will be generous.  In sum, when viewed from an open-minded but cautious perspective, Net Neutrality is restrictive, costly, protectionist, and certainly not ‘neutral’ in any sense of the word.


One thought on “Against Net Neutrality

  1. Hi Ben, I was wondering how I could contact you or the owner of this site. I was interested in helping write for The Centre Right Review after Ian TheNewKeynesian introduced me to this site. My email is if you would like to contact me there. Thanks!


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