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Net Neutrality II
Posted by: Dale Franks on Sunday, April 23, 2006

My fellow blogger Jon Henke appears to object to the suggested solution of my previous post on this subject:
I certainly see the argument — both economic and libertarian — for deregulation of providers. More of a free market in access provision would be beneficial to everybody.

I can also see the economic argument for net neutrality, but I’m having trouble seeing how it’s consistent with libertarianism. Maybe I’m missing some basic fact here, but are you really arguing that we should pass legislation dictating how ISPs muct provide service? If a private company wants to provide restricted service, how is it my place to tell them they may or may not do so.

In fact, such a paradigm might be a good market opportunity. You could have an ISP that provides access only to an approved kind of site that meets some kind of value metric. For example, religious folks could sign up with COL (Christians OnLine) which would only let them (and their children) access sites consistent with their values. Porn addicts could sign up with a service that only serves up porn. Parents could sign up with a site that restricts access to sites potentially dangerous to children. Etc.

And finally, the rest of us could sign up with a service provider that does not and will not restrict access at all. And there will be a market for that. As soon as providers start restricting access, all a company has to do is promise not to restrict access and they’ll skim dissatisfied users from other companies left and right.

At the end of the day, though, why should we favor legislation telling ACME how they must do business?
First of all, this objection makes the fundamental mistake of conflating desktop access with the architecture of the network. The architecture of the network and the level of access desired by the user of the desktop are two entirely different things.

All that requiring the network to act as a common carrier would do would be to ensure unrestricted end-to-end access to all users. If an individual user doesn't want end-to-end access, because their children may see the uncovered breasts of women, the answer to that problem is a desktop software solution, not breaking up access to the network in different tiers.

Under my proposal, if Christians online wanted to sell a desktop solution with a limited-access browser, there'd be nothing wrong with that at all. Indeed, even BellSouth or Time-Warner could provide such a desktop solution to their customers that provided preferential access to their business partners. As long as their customers have the ability to ignore that solution, and a standard browser for unrestricted access to the network if they choose, companies would be perfectly free to provide it.

The destop is not the network, and it's a mistake to overlook that. Big Telco argues as if refusing to allow network tiering means that they can't create business partnerships, and provide tiered solutions to their customers. That is flatly untrue. What they are really saying that they can't exert economic leverage against content providers if they aren't allowed to restrict network access.

The type of regulation I propose would tend to equalize the playing field in terms of negotiating partnerships between content providers and ISPs.

The destop is not the network, and it's a mistake to overlook that.What the big ISPs want is the power to shut off access to their networks from big content providers like Google, Microsoft, or Yahoo. If Cox tells you you must pay them millions of dollars a year, or lose the ability to provide content to millions of consumers, you can a) refuse, and hope their customers get so irked by the policy that they will force Cox to change it, or b) knuckle under, in order to avoid the risk that Cox customers will be satisfied using Yahoo instead of Google, or vice versa. Moreover, as a consumer, what do I do if both Cox and GTE ban Google? Those are my only two broadband choices. Where do I go if I'm PO'd at Cox's decision?

Under the system I propose, Cox can't extort "partnership fees" from Google. Cox and Google have to work together to negotiate a agreement as partners that provides value to each, rather than one side threatening to shut the other off from customers. And, no matter what the outcome of those negotiations, Customers stil receive unrestricted access to Google, if they desire it, even if Cox's desktop solution excludes Google completely.

In one case, the negotiation is "Give me money, or I'll shut you out from your customer base". In the other, it's "What's it worth to you to have preferential access to you in our desktop browsing software?"

As for the libertarian principle involved, that's easy: Preventing aggregations of power. Libertarianism isn't just about limiting the power of government. Libertarianism doesn't assume that concentrations of power in the hands of government is the only dangerous aggregation of power. It merely assumes that government is the most dangerous aggregator of power, because of the state's monopoly on the use of force. That does not mean that aggregations of power in a large corporation are assumed to be benign.

Large corporations are no more interested in a free market than hard-core statists are. As Adam Smith observed over two centuries ago, businessmen are just as eager to restrain free trade in ways that accrue to their own benefit as anyone else is.

I don't trust aggregations of power in either government or in large corporations.

The complicating problem, of course, is that, under the current system of regulation, broadband access is almost entirely the province of large corporations. Thus, the actual consumer faces either the necessity of using a local monopoly, or duopoly when it comes to broadband access. Hence, my suggestion that carriage itself be completely deregulated. Imagine hundreds, perhaps thousands, of local ISPs who build small citywide, or county-wide networks that connect subscribers to the internet. Imagine opening the phonebook and seeing 10 or 20 broadband ISPs in your city, rather than one or two. Moreover, wouldn't increasing the level of competition for subscribers also serve to reduce the temptation from Mountain Bell to tier their access in the first place, because customers could easily switch to another ISP?

Is providing that range of choice to the individual a more libertarian solution, or less of one?


Another commenter, Matt S., of the "The Only Republican in San Francisco" Blog, asks:
Is there any way to legislate neutrality short of having the gov’t do benchmarking? If one of the central offices has a sub-par router, and the result is that some packets are slow, should they be held in violation? If that’s the case, upgrades are out of the question, as it would be too risky from a legal perspective.
I reject this argument.

First, if a router is malfunctioning, unless it has an extremely odd malfunction, it is still providing thr same bandwidth either way. It may be lame, suck bandwidth, but it's the same going either way. By the same token, if you replace Router X tnat provides a 10 base-T pipe with a 100 base-T pipe, you're still providing the same bandwidth, so upgrades aren't a problem.

Again, what I'm suggesting is a very simple, technical regulation. As a common carrier, ISPs must provide unrestricted, end-to-end access to the network, employing the same upstream and downstream bandwidth.

I don't care what the bandwidth is. If you're providing 4 MBPS downstream and 2 MBPS upstream, you change that to provide 3 MBPS up and down, and you're golden. If you're providing 56k down, then provide 56K up.

If you want to provide a tiered desktop access solution to your customers, then go right ahead. In fact, if that desktop solution has asymmetrical bandwidth...well...I don't care. Customers that choose to use it can do so with my blessings. As long as customers can choose to open Firefox or Macromedia Dreamweaver and use it with symmetrical bandwidth, instead of the proprietary Time-Warner software, I don't really care. As it happens, most customers probably won't use a lot of upstream bandwidth.

I also don't care is ISPs choose to levy charges for excessive bandwidth use. Bandwidth isn't free. Most people will use X GB per month. If an ISP wants to set a 100GB limit per month, and charge extra for every 5GB of bandwidth consumed, upstream of downstream, that's perfectly OK, too. Only by pricing bandwidth will customers have an incentive to ration it. You wanna watch Brianna Banks get drilled in streaming video, then you go right ahead, for as much bandwidth as you're willing to pay for.

Big Telco complains that file-sharing and streaming video take up an inordinate amount of bandwidth. Fine. Then charge customers for using that bandwidth. There are, after all, no price controls under my scheme of regulation.

See, that's the quid pro quo. The ISPs have to offer two things, symmetrical bandwidth, and end-to-end connections to every lawful content provider. In return, I don't care how they configure their preferred desktop solutions, their pricing structure for bandwidth, or anything else.

As long as the architecture of the internet is an open, symmetrical one, and competition among ISPs is unrestrained, I expect that market forces will prevent rent-seeking on bandwidth charges or access fees.


One more thing: Much of this agonizing over bandwidth is, in the not-too-long-term, a tempest in a teapot. We are already on the horizon of unlimited bandwidth. Power companies are already experimenting with using the power grid as a transmission medium, and they'll be in the broadband market within the next few years. Then there are satellite and terrestrial wireless technologies on the horizon. Plus, there are compression and burst-signal transmission technologies that can layer on top of that.

It is, in many ways, carrier regulation, and the refusal to liberalize the broadcast spectrum that hinders these new technologies. My proposal would eliminate this regulation, allowing innovative new bandwidth-increasing technologies to flourish.

If bandwidth is essentially free, then many of the arguments against Net neutrality simply vanish...into the aether, as it were.
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Previous Comments to this Post 

Still, your argument comes down to the pretty anti-libertarian view that the government should be able to tell companies how to do business.

When there was a big hue and cry over Microsoft engaging in "unfair" practices that favored their products and discriminated against competitors products, you correctly pointed out that nobody was holding a gun to consumers heads and forcing them to buy MS. If they didn’t like Microsoft’s internal bias towards MS products, they could just take their business elsewhere.

So, why is that not also the case with net access. If you don’t like ACME’s multi-tiered access rules, you can just take your business elsewhere. Why, instead, do you want the government to force ACME to provide you with the kind of service you want them to provide?
As for the libertarian principle involved, that’s easy: Preventing aggregations of power.
I don’t know of any particular libertarian principle that objects to "aggregations of power" — only to the use of force or fraud to aggregate that power. We’re right to be skeptical of aggregations of power, but to use force to dissolve them? That’s very anti-libertarian. And where was this principle of yours when Microsoft — one hell of an aggregation of power — was being criticized for prejudicial market activities?

I agree with you on the need to deregulate provision. But it seems to me that the deregulation of provision would effectively accomplish net neutrality, since there would inevitably be a market for full access.

Written By: Jon Henke
Net neutrality is a fantastic design principle. In fact, much of the Balkanization of the web derives from violations of that principle. However, the idea of symmetrical bandwidth is hardly a requisite, and in fact it is customer preference that leads to this. If you have X bandwidth, and you are browsing the web, it’s a good thing to have 0.8X of your bandwidth to be downstream and 0.2X upstream: it better suits your needs. If you need symmetrical bandwidth, there are numerous ways to get it. Similarly, DHCP suits such customers just fine; few of us need static IPs. In my case, I was willing to pay for the static IPs (2.5 times the cost of an asymmetrical DHCP) but not willing to pay for the symmetrical bandwidth, guaranteed uptime and 24-hour service availability (2 times the asymmetrical static IPs).

I’d love for there to be a service that just provides a wire, and doesn’t charge 4-5 times a basic DHCP-only asymmetrical line, but the reality is that there is not in most locales. (If there were more of a market for these services, their cost would come down. In fact, it already has, just not enough.)
Written By: Jeff Medcalf
As for the libertarian principle involved, that’s easy: Preventing aggregations of power.
I don’t know of any particular libertarian principle that objects to "aggregations of power" — only to the use of force or fraud to aggregate that power. We’re right to be skeptical of aggregations of power, but to use force to dissolve them? That’s very anti-libertarian.
Seems to me that libertarians (and before we had to invent a new and inappropriate word for it, liberals) have been most successful at preventing aggregations of power from abusing that power by playing them off of other powerful actors.

These are all processes which, when operating healthily, are models of this principle:
* Each branch of government is checked by the other two.
* Government is held accountable by the people, in a variety of ways.
* People are accountable to each other, with government being loaned the power to police the legitimate use of force within our territory.
* Businesses are held accountable by the public primarily through competition and price signals.

Now, what happens when a business gains a monopoly over a resource, whether it be a natural resource or a government-enforced monopoly? Call me crazy, but isn’t bandwidth just such a limited resource for the time being? Now, there’s a whole lot of content online that up to this point has been quite freely available to everyone because once someone bought the bandwidth, they could look anywhere in the giant internet marketplace for whatever they were looking for.

Let’s liken the internet to that giant agora.
Now, let’s say that someone bought up all the land at the entrances to this giant, existing marketplace, and declared: "We’re not just charging a price of admission anymore. We’re going to decide where you go."

Is that conducive to liberty? It seems more like a ransom on all the people inside that marketplace. "Yeah, sure, your customers will be perfectly free to see you again as soon as we get the money."

Well, it seems to me that some companies have been granted that very "land" by our government, and stripping away net neutrality would be abusing that government-created monopoly/oligopoly.
Written By: OrneryWP
URL: http://
Still, your argument comes down to the pretty anti-libertarian view that the government should be able to tell companies how to do business.
No, not really. All I’m doing is specifying a technical architecture for the network. I don’t care how they do business.

Look, when a private company builds a private toll road, there are still technical specifications that have to be met. When a construction company builds an office building or home, there are building and safety codes that have to be met. Apparently, we’ve decided that having 80-story office blocks collapsing every five years or so is a worse idea than mandating certain architectural standards.

All I’m doing is saying, in return for eliminating all carrier regulation, and eliminating the current government-created oligopolies that make up broadband ISPs, we’ll implement a "building code" that specifies the minimum requirements for connecting to the Internet.

Jebus cripes, that’s a massive reduction in "telling compnaies how to run their business"!
Written By: Dale Franks
The building code analogy helps, but it assumes we are at the zenith of network architecture and we need to lock it in. Asking the gov’t to dictate technical requirements is exactly the problem.
Since that isn’t what I’m doing, it’s hard to see what your objection is. The only thing I’m codifying is a result of the architecture. I don’t care what the actual architecture is, or how the result is accomplished. I’m saying end-to-end and symmetricality is the standard. The technical details of how that is achieved is completely beyond the scope of the standard.

Written By: Dale Franks
All I’m doing is specifying a technical architecture for the network. I don’t care how they do business.
I’m not sure I understand the difference. If ACME wants to discriminate for and against certain packets on their own pipeline, how is that your business to stop? And if we create legislation forcing them to treat all bits equally, how is that not telling them how to do business?
Apparently, we’ve decided that having 80-story office blocks collapsing every five years or so is a worse idea than mandating certain architectural standards.
Yeah, well "imposing a major safety hazard on thousands of uninformed people" is not quite the same as "carrying one bit instead of another".
Jebus cripes, that’s a massive reduction in "telling compnaies how to run their business"!
No, deregulating provision is a massive deregulation. But once we’ve deregulated provision, what’s the need to regulate the network? If we’ve got a wide variety of providers, we can get around censorship ourselves. If the market cares about net neutrality at all — and I’m certain that it does — competition will ensure there’s plenty of non-censoring ISPs. So, if you get the deregulation of provision, why is "net neutrality" regulation necessary at all?

You’d mentioned previously that if we didn’t have net neutrality, the internet could end up like cable tv. Ok, fine. So, do you propose legislation forcing cable companies to carry every tv channel, without discrimination? Or to at least make every channel available to customers?

Of course, since there are options — satellite, for example — we can access every channel without forcing cable providers to give us service in the manner we’d like rather than the manner they choose to operate their company. Why is the internet different?
Written By: Jon Henke
I think part of the problem that comes in here is that the infrastructure that net runs on is already in defiance of libertarian principles. If I want a cable broadband connection, I must choose to go with Cox, because no one else is allowed to compete for my business. As long as that instituted monopoly is still in place, everything else is made more complicated because of it.
Written By: Dustin
URL: http://
I don’t think using cable companies and stations is the best analogy. Because there is no communication going upstream in a cable company. I think a closer correlation would be a telephone company deciding that you couldn’t call someone. (or a correlation with the ’bandwidth shaping’ - making a call to your friend steve take 3 minutes to connect because that isn’t as important a call as a 911 call)
Written By: Dustin
URL: http://
"Apparently, we’ve decided that having 80-story office blocks collapsing every five years or so is a worse idea than mandating certain architectural standards."

This is a poor analog both because it doesn’t fit the network issue and because it assumes this is what would happen in the absence of mandated building codes. It might happen, once or twice, before lawsuits would fly and certain contractors would be out of business. Building codes are useful as standards, but mandated building codes are coercive and often excessive.

Written By: Unknown
URL: http://
analogy, not analog.
Written By: Unknown
URL: http://
I wish here not to enter the technical debates on this issue, but simply register a principled objection to government intervention in business. I think that the consumer’s voice and dollar, and not the FCC, are the proper tools to solve any problems here.
Written By: pkp646
URL: http://
While I appreciate the very interesting and intelligent discussion on the libertarian aspects of the net neutrality debate, I tend to agree with those who’ve said that it seems unwarranted to ask for government regulation. It seems to me that 1) the market will sort out any violations of the principles of net neutrality since the vast majority of consumers have a choice of more than 2 ISPs and 2) innovation and efficiencies may well spring from such.
Written By: FOS
URL: http://
My first inclination is to agree with Jon: A libertarian asking for governmental regulation of a business is in most cases somewhat akin to a communist championing the virtues of competition. However, I find it hard to muster up any sympathy for the telcos or cable companies, since they owe their very existence to government enforced monopolies, (or oligopolies at best, as others have pointed out).

Certainly consumers in some areas now have multiple possibilities when choosing an Internet Service Provider (ISP). However, as Dale sort of points out, a network provider is not the same as an Internet Service Provider. Some company owns the lines that your ISP uses to provide service to your house. It may be the same company that owns the network, such as Time-Warner or Comcast, or it may be a company such as Earthlink, which piggy-backs on the network lines. But ultimately it’s not the ISP’s decision to charge Google or Yahoo an extra fee, it’s the network provider’s. It’s not Earthlink that has the ultimate power to shut Google down: if Google refuses to pay Earthlink an extra fee and Earthlink then cuts off its customers’ access to Google, many of those customers will just change ISPs, a fact that Earthlink knows very well.

But, if the network provider in your area wants to drop Google, you’re somewhat screwed. You could switch to another network by, for example, changing from cable to DSL, but there are differences between networks that are far larger than the differences between ISPs, particularly in regards to speed.

I still would agree with Jon that this isn’t any of the government’s business except for one thing: it’s already the government’s business. In my neighborhood, if I want cable modem internet service, I have to go through Optimum., which owns the network. But this ownership did not come about through the working of any market, but because the government gave Optimum the exclusive "right" to provide my area’s cable service.

Because of this, I think I ultimately agree with Dale’s position, but not his reasoning. I may be wrong, but it sounds to me as though his position would be the same regardless of whether the network providers earned their exclusivity or had it handed to them by the government. My position is that since Optimum has been "granted" a cable franchise in my area by the government, and thus has been mostly spared from the sometimes harsh realities of competition, the people in my neighborhood have the right to demand that Optimum provide open access to any url they choose to enter or click on.

However, unlike Dale, if Optimum had achieved its market dominance freely and fairly, I would neither expect nor want the government telling its execs how they must operate their business, any more than I want the government regulating gas prices because some people believe they have a "right" to cheap fuel, or telling Walmart how much it needs to pay its workers. The latter, unless I’m reading him wrong, seems to essentially be Dean’s position: he believes he has a right to net neutrality and wants the government to protect this right.

I’m philosphically incapable of agreeing with that. I believe that net neutrality is most likely the most beneficial system for the public, but as a libertarian this doesn’t mean that I want the government to ensure its outcome. I think America would be much better off if everybody spent some time in the military, but I’m vehemently opposed to the draft. In addition, from a purely utilitarian position, wireless networks are probably not far from providing high quality service and speed at competitive prices, and are thereby poised to become serious competitors to the telcos and cable systems, all of which means consumers will have more network providers to choose from. This should ensure having the option of net neutrality, and if that’s what most people want, network providers are going to have a hard time denying it to them.

(Obviously, Dean, if I’ve misinterpreted you, I humbly apologize and will begin flagellation upon receipt of comment informing me of the error of my ways.)
Written By: The Cranky Insomniac
I just realized that with one post, I may have somehow managed to offend two QandOrians (from the bottle city of Qandor?). Stupid! Stupid! Stupid!

I guess I’ll start gathering my things and get ready to leave the Life, Liberty, Property blogroll...
Written By: The Cranky Insomniac
Pull yourself together, Cranky. I actually think there’s a lot of merit to your suggestion: that is, if the ISPs continue to enjoy monopoly status by government fiat, then they ought to be neutral carriers of data. If they want to be able to discriminate, then they must lose their monopoly status.

So, pretty much exactly the opposite of Dale’s suggestion: deregulate provision and lose the idea of legislated "net neutrality". so long as provision is regulated, though, "net neutrality" is the standard.
Written By: Jon Henke

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