Net Neutrality Developments

net neutrality pictureIn recent years the “Net Neutrality” movement has gained steam. This is an effort by various statists, interventionists, do-gooders, meddlers, and techno-ignoramuses who seek to have the government forbid network providers (e.g. cable companies, telcos, and wireless carriers) from selectively blocking certain types of Internet use–for example, to require companies to give Web users equal access to all content, even if some of that content is clogging the network. Of course, as I noted on A Libertarian Take on Net Neutrality, the network neutrality movement is unlibertarian. There is nothing wrong with price discrimination or with charging different prices for different levels of service. As some anti-corporatist types are only too eager to point out, without state intervention the major telcos might well not have as much monopolistic power as they currently do. But it doesn’t make much sense to urge that the state engage in further intervention to fix the problem of previous state intervention. It is state intervention that is the problem.

In the latest development on this front, as reported in U.S. Court Curbs F.C.C. Authority on Web Traffic, cable company Comcast Corporation had challenged the F.C.C.’s authority to impose Net Neutrality rules. Last week, a federal appeals court ruled in Comcast’s favor, holding that F.C.C. regulators have limited power over Web traffic. As the article notes, “The decision will allow Internet service companies to block or slow specific sites and charge video sites like YouTube to deliver their content faster to users.”

Libertarians should not leap for joy, however. The court merely held that current federal statutes do not happen to give the F.C.C. quite enough authority to regulate Internet companies in this manner. They didn’t say it would be unconstitutional or even unwise. So all Congress has to do is pass a law. And they’re good at doing that.

Update: See my posts Kinsella on This Week in Law discussing IP, Net NeutralityAgainst Net Neutrality; and Fernando Herrera-Gonzales’s articles Net Neutrality: Unwarranted Intervention and Opening the Internet — with an Axe.

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  • What net neutrality legislation, if passed in its idealized form (and obviously, it would not get passed in its idealized form) would do is to prohibit service providers from blocking the voluntary download of applications or favoring one sort of traffic over another. At its heart, this is a commons issue. 80% of all of the bandwidth out there is consumed by 20% of the users. We hit on something here and ran right over it. Debating this topic from a libertarian point of view is problematic. We don’t live in a libertarian society, many assume that we are slowly headed towards socialism. If I may make an oversimplified analogy, net neutrality is like deciding on what flavor of ice cream to order in a world where there is only vanilla and chocolate. I’m sorry to those that think this is a valid libertarian argument, it is not, in a libertarian world Net neutrality would be a mute point. You cannot argue a libertarian philosophy inside of a socialist regime and not look like the fool you seem to me. Its like being in a quantum mechanic course and arguing a point based on Einsteins’ general relativity. Does this make sense to you psudo-libertarians or libertarian-lite types? It might help if we libertarians could elaborate the various state regulations and laws that have given current network providers more market power than they would have in a truly free market–taxes, minimum wage laws, implicit and explicit subsidies, the legacy of government-granted monopolies, pro-union legislation, and various other regulations that disproportionately shackle and hamper smaller companies and potential competitors; regulations that help the existing, larger companies by increasing barriers to entry into that field; state taxes, IP laws, and regulations that stifle dynamic change, innovation, and competition. A true libertarian response to this issue is to call for the elimination of all forms of corporation, tax funded subsidies, IP law, wage and hour legislation, mandatory worker benefits, labor union legislation, minimum wage, incorporation statutes [note: this does not mean I think that limited liability is a privilege conferred by the state on corporations], and so on. Instead of supporting a “net neutrality act” pause to ask: what is the state’s role in causing the industry to be the way it is?