Net Neutrality: Toward a Stupid Internet | Hacker News Reader

Net Neutrality: Toward a Stupid Internet

theobjectivestandard.com

26 pointsdwwoelfel48 comments

There is one critical flaw with the reasoning of all these opponents of Net Neutrality. They claim the ISPs should have the right to regulate traffic to remain 'competitive', and that users who aren't happy with the regulation can simply choose another ISP. That's how the free market works.

Except this isn't really a free market. In most locations, consumers only have a single choice for broadband access (or two at most). Most ISPs have a regional monopoly. So if your local cable provider decides to charge you extra to access wikipedia, you're SOL.

You can't appeal to the 'free market' when there really isn't one. Your only choice is to create one, which is exactly what net neutrality aims to do.

Since the lack of broadband competition may be caused by government regulation, the author would prefer total deregulation rather than Net Neutrality or the status quo: "The key to competition in the Internet is less regulation, not the added regulation entailed by net neutrality. ... We must undo the relatively few controls already placed on the Internet..."

Except that it's not created by government regulation, tt just doesn't make economic sense. Broadband is very much a natural monopoly, like electricity or water. In a free market, the first few incumbents (usually the phone provider and the cable provider) who have already built out their infrastructure for old services (phone and cable TV) have a huge advantage over any other company, which would have to spend billions to lay their own wires. Thus market forces prevent any other company from entering the market.

Furthermore, it's not really clear that the socially desirable outcome is to promote competition at the line level. Because each producer has to spend billions on infrastructure to serve fewer people (because the more providers there are, the fewer customers for each), costs will be higher and profits lower the more companies enter the market.

The best solution is in fact government regulation. Instead of promoting competition at the line-level, governments should (and most OECD countries do, with the exception of Mexico, the Slovak Republic and...the US) require local-loop unbundling, whereby the incumbent telco is given a monopoly on laying lines to houses but is required to lease their lines to competitors at a set price.

For more information, read the Berkman Center's Broadband report, which was commissioned by the FCC and is presently the more thorough empirical look at these topics. It's available here: http://cyber.law.harvard.edu/pubrelease/broadband/.

A government commission studying [subject] recommends more governmental control over [subject]? I don't find that impressive.

The study was merely commissioned by the FCC, but it was actually conducted by Harvard's Berkman Center for Public Policy. And your curt comment neatly avoids actually evaluating this very well-done study. I've done my own analyses of the data (which is mostly all publicly available from the OECD) and found similar conclusions (for example: about 68% of the variance in price of "fast" connection (12-36Mb/s) in the OECD is attributable to the presence of various government regulations, including LLU, as is about 30% of the variance in price per mbit). If you doubt their methodology or results, I invite you to look at the data and make your own conclusions.

How can you possibly isolate something to a percentage point that involves things as nebulous as "various government regulations" operating on vast industries spanning multiple countries? My skepticism meter is off the charts here.

It's not actually that nebulous (I was simplifying because it seemed more appropriate for the setting than to give a thorough discussion of the relevant analysis). The technique, though, is regression analysis, which is widely used in econometrics (amongst other fields) to gauge the marginal effect of various variables. Obviously the exact percentage should be taken with a grain of salt, but those numbers (which are significant at 5% confidence) clearly demonstrate the point.

Again, the Berkman Center's study is very well-done, and if your skepticism remains I encourage you to at least skim it. Otherwise, you're arguing from a position of ignorance and are contributing little to this discussion.

Broadband is very much a natural monopoly, like electricity or water.

ATT used to say that the phone network was "a natural monopoly". Today we'd laugh at that. Really, this example is so glaring that I'm surprised you'd offer this argument. And in fact you acknowledge that the local loop is separate from the actual network. But the difference in the US is that this is a free market -- I can choose to use Embarq (the traditional copper-wire circuit-switched carrier), or I can (and do) use Vonage, or scads of other IP-based carriers, or I could do like many people do and just use cellular. We the consumers are getting to choose just how this unbundling happens.

If, for some reason, you think that there's something sacred about telephone, while data is different (or vice versa), there are other counterexamples as well.

In New York, while electrical transmission remains a monopoly, generation has many choices. It works just like the phones: where the infrastructure demands a single source, that's what we get, but that doesn't mean that the people that provide the wires can be the only one involved in the business. (I pay more for electricity that's generated in part by windmills)

And most obviously, it seems to me that most people have access to two broadband carriers, albeit their capacity varies widely (but that's what markets are all about, right?). Virtually everyone I know has a choice of a DSL provider or a Cable provider.

I can (and do) use Vonage, or scads of other IP-based carrier

You're missing the point, services like voip could end up priced arbitrarily in the interest of the carrier. What if non-AT&T voip services were priced out of the market? This is not beneficial to the consumer. It's easy to claim wireless or some new technology will always provide innovation and options, now, when the market is new and less consolidated. 10 years from now, there's no reason to think a single company won't own cell networks as well as cable networks, or any other medium for that matter. The status quo sucks! I don't know about your area, but around here ISPs rarely, if ever invest in infrastructure, and upgrades are unheard of. My parents in a rural area have been waiting for years for any land based broadband options, 3g doesn't even work there!

You're missing the point, but not for the reason given below. The pipe is the natural monopoly, not the services provided over it. This is so obvious that it hardly bears repeating, but again: it makes no more economic sense for multiple companies to run fiber to each house than it does for multiple companies to run electric wires to each house.

Sure you can use Vonage for phone instead of AT&T (or whatever), but you can only do that because you have a pipe to the internet. VoIP services are means of getting phone over a different pipe, but you still need a pipe.

You also seem to miss the point of my comment: governments should have policies like mandatory local-loop unbundling (also called line-sharing) which produce competition where it makes sense (providing backbone) instead of where it makes little sense (providing the "last-mile" connection).

Finally, a duopoly is better than a monopoly, but not by much. It still gives the players far too much control of the market.

Here in Ontario, we have the illusion of choice. Bell owns the DSL system, and allows other companies to resell access. Bell still controls the network, however. Back in 2008, Bell implemented bit torrent throttling and forced the change on all resellers. So now we have a choice of throttled DSL, throttled DSL, or throttled DSL.

This is why I think it's dangerous to describe open access as a competition-based solution. In open access there's competition only for the part of the network that doesn't matter and thus such competition doesn't solve very much. The real benefit of open access comes when the last mile has to be neutral, in which case the benefit comes from neutrality regulation, not open access.

He never claims that the ISPs have a right to regulate traffic because they have to remain competitive (whatever that means). He makes it very clear that ISPs have a right to regulate traffic because they own the infrastructure.

The alternative is "government control of the privately owned infrastructure that makes the Internet possible."

How many choices you have doesn't determine whether something is or is not a free market. That's like saying that there is no free market in tablet computers because you can only buy iPads or JooJoos. Men are free to create and sell their own tablets, just as men are free to create their own ISPs. That is what makes it a free market.

Of course, the ISP market isn't totally free, but the solution is to remove regulations that violate the property rights of the ISPs. Net neutrality only makes the market less free.

The premise of net neutrality is that the internet is a limited resource. The physical space required for building infrastructure is limited, effectively making the internet a limited resource as well. Most cities have already leased out the space for building networks, or let companies own the poles and conduits outright.

This is why i took issue with his car showroom example. Its a big difference when there are plenty of places to build a showroom. There's only one easement behind my house. The poles are owned by comcast, the ground has sewers.

So the only way to get an internet signal into your house is through the wires owned by Comcast? Do they also own the power lines? The phone lines? The space on your roof for a satellite dish?

Even if there was no other way to get an internet signal into your house, that still wouldn't justify violating Comcast's property rights.

Just because someone owns property does not mean that they have unending rights to do with that property what they wish. Go buy a piece of land in the middle of the city, build a giant bonfire, and see what happens. Due to state "regulation," your landlord can't just barge in on his/her property whenever he/she wishes. Laws like this have existed to protect the weak or meek for ages.

In a sense, "property" does not exist. Property only exists because laws exist to protect it. If the country you live in is invaded by a more powerful nation, how much do you think your "property" matters at that time? It's just a set of limited rights granted to you by the government, not unlimited license to do whatever you wish.

What you are suggesting depends entirely on the source of rights. If rights are granted by men and can be removed then you're right. If your rights are inherent or granted by God then you are incorrect.

If my rights are granted by God (and included in those rights is the right to private ownership) then if someone invades my land they are violating God's law.

Private property is the basic requirement of wealth. It is defined by law to codify what existed for the protection and benefit of everyone. I'm basically quoting Aristotle here.

If God has laws to protect our rights, then He really should be way more vigilant about enforcing them.

Rights aren't granted by men, they're asserted by men. We have the right to free speech because we assert that we have the right to free speech, and the collective will of those who wish to assert the right to free speech is (currently, in this country, for the most part) greater than the will of those who wish to restrict it. This is why it's so important that we all agree on what rights we do have, and that we all spend a lot of time vigourously asserting them.

^^^ This is mostly exactly what I'm getting at, but said in a much more eloquent way. Thank you.

God's laws would define our rights and if you believe that Hell exists then he makes sure things get sorted out in the end just fine.

Without a basis for defining rights you're leaving room for those rights to be trampled on by the next popular tyrant who comes along. That's what I'm concerned about.

TLDR: This is exactly what you'd expect ultracapitalist Objectivists to say: ISPs should be allowed to do whatever they want because their networks are private property.

Quite. I looked up some other articles by this guy, and his viewpoint is very evident.

ISPs networks are not (totally) private property though. They are in many cases publicly subsidized, and they operate with a state-backed grant of monopoly or oligopoly within each region.

IMHO, regardless of what you think of Objectivism or libertarianism, the standard libertarian critique of government interference does not apply to net neutrality. It would apply if telecom were actually a free market and if telcos did not receive large amounts of state support.

Conservatives and most libertarians usually fail the see the distinction between actual private businesses that operate in a free market (e.g. Google, Apple, etc.) and state-backed quasi-private enterprises like telcos. The latter are aptly called "Soviet bureaus."

I don't think they fail to see the distinction, but instead of further cementing government control they in fact argue that telcos should lose their government privileges and be left to compete in the market. Sure at first they will have significant advantages but as time goes on competition should be able to function.

Yeah, because if I have a problem with my ISP, I'll just head to the bank, borrow a few hundred billion and build my own backbone.

This is sort of funny, but despite receiving many more upvotes than its parent, it displays a startling lack of understanding of the capitalist system.

More likely than you borrowing a few "hundred billion," large, midsize, and even small corporations would invest a "few million" in a city or neighborhood somewhere and use the profits to continue investing in other profitable areas. They might even collaborate and start connecting entire cities together (oh look, a backbone). I find this a much more desirable outcome than a government-run or (the current) psuedo-government run scenario.

Well, ok Mr. Capitalist, why hasn't that happened yet? It's certainly not because the existing cable companies' sterling customer service leaves no room for improvement.

It hasn't happened because most communities grant a monopoly to their cable provider so their can only be one legal cable company in a given area.

That might be true but it's irrelevant. I'd have no objection if you left out the introductory clause.

http://www.paulgraham.com/disagree.html

Actually I'm not disagreeing. I'm saying that you probably don't need to read this (long-winded) article because it simply reiterates a well-known and well-worn position.

Sorry. I didn't notice your TLDR tag.

That's not an argument and it adds very little to the discussion. I don't know why you're being voted up.

If you disagree with his points, state your reasons.

Ultracapitalist? You mean an entrepreneur?

Or were you just trying to slur someone for having a different viewpoint?

The problem with a lack of net neutrality is not how ISPs relate to their paying customers, it's how they relate to content providers. That's not to say that I agree with the arguments in the article; I find them extremely distasteful, although there is some reasoning behind them, based on ideas of morality that I disagree with but don't find completely invalid.

I'll outline the scenario that worries me. Comcast sends all internet data as second-tier data, unless the content provider pays Comcast to provide it as first-tier data. The difference between the two is small, say one or two tenths of a second in delivery time. The end user doesn't notice a difference. But, as Google has found, the extra tenth of a second has huge impacts on conversion for websites. So, Comcast effectively offers the same experience to users, but now also holds a huge sword over the head of content provides. Effectively, it is in an excellent position to leverage its ISP monopoly to create a massive extortion racket to content providers. And the magical free market isn't going to push back against Comcast, because the experience for the end-user has not noticeably suffered.

It's quite possible that under such a system the internet could actually be free, because it's subsidized by corporate content provider partners, and charging the content consumers becomes obsolete, although I doubt Comcast would suddenly drop a revenue source. However, it also raises the barrier to entry for small content providers, because they don't have the spare cash to pay Comcast for non-sub-standard conversion rates. In a (weasel) word, it's less democratic. Not to mention, Comcast can sustain its monopoly on ISPs by giving even shittier third-tier access to its competitors. The end result is a less-free internet, Comcast enriching themselves by abusing a monopoly, and all of this done without Comcast delivering a higher-quality internet to users. I think I'll take my stupid pipes, please.

I agree with the author insofar as I accept that his conclusion is consistent with Objectivism, although it's still debatable if owning the wires means owning the data that goes through the wires. Fortunately for me, I'm a pragmatist, not an Objectivist, and I think the loss of property rights (if any!) is perfectly acceptable for the benefits to expression and communication.

It's worth saying, that if the ISPs are taxing the content providers, and are totally free to do so on a discriminatory basis...

We actually have a much-less-free market for everyone except the ISPs, who operate in a totally-not-free market to begin with.

Way to go, free marketeers. Don't let those details fool you, just stick with the ideology.

> Effectively, it is in an excellent position to leverage its ISP monopoly to create a massive extortion racket to content providers. And the magical free market isn't going to push back against Comcast, because the experience for the end-user has not noticeably suffered.

So in the end, being an internet provider is massively profitable, and maybe another company decides to jump into the space to take a share of the highly profitable market. Maybe two companies, maybe three. Suddenly there are choices, these companies are competing on price, service, bandwidth, etc. for customers and everyone wins, all at the price of Mom's free blog being served 1/10th of a second slower in the interim.

Sounds good to me.

So what you're afraid of is, using an analogy, if the government doesn't regulate the lemonade industry, there will be no high quality lemonade available to you at any reasonable price. By regulate, I mean ensure that everyone gets the same quality lemonade.

Of course, if everyone gets the same quality lemonade and the government keeps pouring money into the big lemonade stands, you're actually creating a system where lemonade will never improve.

The only chance we have of having optimal lemonade is to deregulate the lemonade stands.

> Were it not for net neutrality, a start-up ISP might compete against Comcast by configuring its fledgling network to favor Bit Torrent’s peer-to-peer data packets, thereby earning it the business of serious movie downloaders without having to match or exceed Comcast in expensive infrastructure.

Really? If someone advertised their ISP as 'BitTorrent-friendly' they would have to contend with the MPAA, RIAA, BSA, etc trying to sue their company back into the stone-age.

> If an ISP were left alone to manage the transmission of data packets across its property, it could profitably improve the speed of its network, it could profit from charging more for more bandwidth consumption, and it could profit from providing special services to certain customers, such as smoothly streaming high-definition video feeds. But because none of these things is possible under net neutrality’s rules, the property of Internet service providers is worth considerably less to them in terms of its profit potential. Accordingly, their incentive to expand and improve the infrastructure on which the Internet relies is greatly diminished.

The government poured billions into the country's major ISPs to 'upgrade infrastructure' and there was little to no return on that investment. Infrastructure was not upgraded and we are now at a point where ISPs are trying to claim that their networks can no longer handle capacity, so they are forced to do filtering and 'QoS.' Where did all of that money go? Shouldn't the free market have allowed the ISPs to use that money to improve their networks so that they could reap larger rewards from those better built networks?

The problem with trying to treat Internet Service Providers as some sort of 'free market' is that it isn't. There are huge barriers to entry in the market, and well-established incumbents. Most places in the USA only have 1 or 2 choices for internet service. How is this in any way a 'free market' that the government should say out of? In fact, the governments created this mess in the first place by creating phone company and cable company monopolies. Now these telcos preach about how 'the market should be free' just because they have a huge advantage (i.e. established customers and deep-pockets) against any possible competitors. Which is a hypocritical stance seeing as they are where they are today due to government-granted monopolies.

tl;dr The ISP business model:

  1. Get the government to give you a lead in the market through a monopoly
  2. Grow your business by leaps and bounds during this monopoly period
  3. Government opens market
  4. Complain that government intervention in the market is evil and lobby
     against the government helping out any potential competitors

So it seems your problem is with the initial government intervention? So in order to fix that we need more?

Limiting what lobbyist and special interest group can squeeze out of government should give a fair shake.

I'm not really offering solutions. I'm pointing out the lack of a decent evaluation of how we got here and how we can fix it. Almost all net neutrality discussions are people that want to prevent large ISPs from enacting draconian restrictions on their networks vs the people that don't want any government regulation of anything. There doesn't seem to be much constructive discussion. Just people taking traditional 'liberal-vs-conservative' positions and digging in to duke it out on the canned talking points that traditionally follow.

The people that say "networks are private property and I don't want no government in my private property" are forgetting that most of those networks were built during periods of guaranteed profits (AT&T) or just regional monopolies (cable companies). It's not like these companies were little mom-n-pop shops that were built from nothing with no help from anyone, and now the 'big bad government' is coming in to kill them off by helping their competitors. These companies where weened off the government's teat.

The people that want to bring in the government to restrict the internet are forgetting that there is a whole can of worms that will be opened if the government starts getting their hands into the internet. Sure it could be just 'net neutrality' regulation now, but what you picture as what 'net neutrality' should be will not be what it looks like once an actual bill gets passed. Not to mention all the attempts to tack on 'child porn' filtering and crap (possibly creating some 'Internet Filter Czar' position in the Executive Branch).

Even solutions like: "the internet should be like the highways; built and run with tax-payer money." So the government now runs the major backbones of the internet in the US. This means:

  1. Companies can easily become ISPs by hooking into
     the backbone at reasonable rates
  2. Congress will be salivating to pass bills to put filters
     on these backbones to 'protect the children.'
  3. The networks will be less secure as routers, servers,
     etc are administered by incompetent administrators that
     only have their positions because they know how to play
     the government bureaucracy politicking games better than
     more technically skilled colleagues.

The average consumer is stuck between a rock (the government) and a hard place (large corporations with vested interests). Neither solution is particularly palatable, and it's naive to say that one solution or the other will save us from all the evil in the world.

I'll take large corporations with vested interests over the government. At least those interests are maintaining a profit and answering to the market. I can pick between a few different COMPETING mega-corps (if they are a monopoly, break them up via anti-trust). With the government I will have no choices and I can see them chomping at the bit to take away liberty "for the children."

The thing is that you're buying into the false dichotomy of the Net Neutrality debate. It's not an all-or-nothing prospect. Rather than framing the question in terms of, "who should control our internet," we should be asking, "how can we fix the current situation." In your post, you make an excellent suggestion, anti-trust. The only issue with that, is that we've proven in recent years that the power of the corporation extends well into the government, and most anti-trust attempts end up as not much more than slaps on the wrist.

No what we need to do is enforce the terms on which that initial government intervention happened. And that is that in return for the government granting you monopolies subsidies and a lot of rights you agree to promote the public interest.

Government control of private property - this is how some public utilities operate. Private industry builds the infrastructure, but the government aims to bring stability through regulation to what a large part of the general population sees as an essential service.

This article makes the analogy to the printing press; that the Internet is changing our worldwide society dramatically. Those who are for net neutrality (myself included) would likely agree - that this transformation is a positive thing and should move towards becoming an essential service.

How this is accomplished - either through private industry or government ownership - is really just a matter of culture. Many countries have significant government ownership of network infrastructure.

Many countries gradually cannibalize themselves in the name of the "public good" as well.

USA has been the only experiment in capitalism so far (and a raving success until the income tax was instituted)... why re-model on failed socialist principles?

I wonder if there's a simile to make with electric utilities.

A "smart grid" could potentially distinguish between surcharge-able electrons, just as a "smart internet" (one without net neurtrality) could distinguish between good and bad packets. Would you want an electric utility to be able to charge you more because you bought the wrong brand of refrigerator? Or were charging an imported electric car?

Of course utilities will charge more for peak hour usage right now, but at least every electron is charged the same at that time.

What do you think?

Bittorrent invented P2P... Stopped reading when I hit that.

--edit-- Read it again and he says "developed p2p" which could be construed as further developed I suppose. Benefit of the doubt.

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