All Your Tubes Are Belong to Googlizon

What you say!!!¹

There has been a lot wailing and gnashing of teeth recently over a joint announcement by Google and Verizon of a legislative-framework proposal they’ve been working on.

Now, I’ve seen this variously referred to as a backroom deal or pact, a secret treaty, or a set of regulations Google and Verizon are imposing on the internet. The FCC is shamefully abdicating its responsibility to regulate the internet! Nevermind that the D.C. Circuit court determined recently in the Comcast case that the FCC has no such regulatory authority over broadband internet; hence, the calls to disastrously reclassify broadband internet access in order to place it under the same regulatory rules as regular telephone service. Some are even intimating that Google and Verizon are trying to “own” the internet. Net neutrality activists are up in arms about this proposal, viciously attacking Google for selling out and reversing its longstanding defense of net neutrality, and calling for people to stage a silly boycott of Google products and services. If you don’t join the herd, you get labeled a Google-Verizon apologist or it is insinuated that you are on their payroll (see comments on the CNET articles linked below, for example).

So what should libertarians make of all this?

As libertarians, we must of course oppose the Google-Verizon proposal and favor the abolition of the FCC and all internet regulation.

First, it is necessary to get a few facts straight. Larry Downes provides the best analysis I’ve yet seen in “Deconstructing the Google-Verizon Framework” at TechLiberation.com and “What the Google-Verizon proposal really says” at CNET. (There’s some overlap, but it’s worth reading both.) Also good and level-headed are Peter Suderman’s “No More Net Neutrality?” at Reason.com’s Hit & Run and Berin Szoka and Adam Thierer’s “Just say no to Ma Bell-era Net neutrality regulation” at CNET (though libertarians cannot agree with their claim that governments should step in “when . . . self-regulation fails”).

As Downes points out,

the Google-Verizon framework has absolutely no legal significance.  It’s not a treaty, accord, agreement, deal, pact, contract or business arrangement — all terms still being used to describe it.  It doesn’t bind anyone to do anything, including Google and Verizon.

Moreover, if Downes’s analysis is correct, there are very few significant differences between the Google-Verizon proposal and the FCC’s own Notice of Proposed Rulemaking (NPRM) made way back in October of last year. So much for the “FCC is abdicating regulatory responsibility” nonsense (the authority for which it lacks, remember). Keep in mind this is just a proposal. We don’t know if the FCC or Congress will adopt any of its points. Google and Verizon cannot write or impose regulations without Congress and the FCC.

According to Downes, it is primarily for the very points on which the Google-Verizon and FCC proposals are identical or very very similar that Google and Verizon are being attacked. And, bizarrely, it is these points that net neutrality advocates usually support — and, notably, do support…when they come from the FCC. Odd how vague terms and turns of phrase get interpreted much more charitably when coming from a government bureaucracy than from a corporation.

Where the Google-Verizon proposal does differ significantly from the FCC proposal is where things get interesting. It does suggest the FCC not be granted any authority to regulate broadband internet access and only be granted the authority to enforce rules passed into law by Congress. Libertarians can get behind the first part of this at least. And one would think people of a democratic bent would approve of keeping regulatory control in the hands of a democratically-elected body rather than a technocratic, politically-appointed bureaucracy.  Unsurprisingly, the FCC is none too fond of this part of the proposal, insisting the only way net neutrality will be achieved is if Congress gives them more power and authority. Imagine that.

The proposal significantly departs from net neutrality by suggesting wireless broadband, i.e., mobile network, infrastructure is not mature enough yet to function reasonably well under its rules. This appears to be a compromise Google made with Verizon, long a staunch opponent of net neutrality, in order to come to an agreement on a middle-ground policy proposal before Congress or the FCC got it into their heads to do something drastic, like reclassifying broadband internet or otherwise granting the FCC broad regulatory authority to screw up the internet.

Another noted exception to net neutrality is the exclusion of “unlawful” content from the non-discrimination rule. Libertarians can object to this that there is much that is unlawful, under positive law, in the US that should not be. But is this exception really that unusual? Don’t landlords often include such provisions in leases? Do we really imagine that governments won’t mind ISPs allowing “unlawful” activity and content or that ISPs won’t mind bearing the risk of liability for what customers do on their networks? Instead of attacking Google and Verizon on this, net neutrality advocates ought to attack governments for unjust laws and get them repealed. Still, it would be heroic of Google and Verizon to defy governments on this.

The Google-Verizon and FCC proposals don’t seem all that radical, status-quo altering, or different to me. It seems much is being made ado about nothing and the claims of the death of Google’s commitment to net neutrality as well as the FCC’s exercising of its regulatory responsibility have been greatly exaggerated.  Surprise Surprise. The boring truth wouldn’t generate as many page views and as much anti-corporate political outrage.

But all this is really neither here nor there. Whether Google has sold out on net neutrality or not, whether Downes’s analysis is correct or not, whatever the correct interpretation of certain phrases in the Google-Verizon proposal that net neutrality advocates are criticizing – it shouldn’t have a significant impact on how libertarians ought to view what Google and Verizon are trying to do.  Google and Verizon are attempting regulatory capture. They are trying to get Congress and/or the FCC to regulate the internet in certain ways. This is understandable. It can be seen as defensive in a sense – to prevent regulation that will be harmful to their business. The proposal seeks to preserve the lack of net neutrality in wireless broadband, at least for now, effectively maintaining the status quo for Verizon. And it seeks to preserve, codify, and extend net neutrality in wired broadband, which benefits Google on personal computers.

Meanwhile, in a separate move, Google is apparently starting to co-locate portable data centers with Verizon’s network hubs to speed up its services for mobile users as well as save space for other traffic and probably save the two companies money. There’s nothing wrong with this at all, legally or morally, as it is a shrewd business decision that involves no aggression; and it will only benefit users.

While the Google-Verizon legislative-framework proposal may be defensive in a sense, self-defense against impending aggression (i.e., the threat or use of initiatory force) cannot justify aggression against innocent third parties. The proposal as a whole will involve just such “collateral damage.” Government regulation involves initiating force against people to prevent them from engaging in voluntary, mutually-agreeable transactions with their own property.  As libertarians, we must of course oppose this and favor the abolition of the FCC and all internet regulation. Depending on your point of view, the Google-Verizon proposal may be the best politically-realistic option on the table or there may be better alternatives (though it’s not the abominable betrayal many are making it out to be), but because it is a proposal for regulating the internet it is not something libertarians can actively support.

Against this position I have personally seen a number of different objections (in blockquotes below):

This is naive and reflexive. What you propose is dangerous, because voters and internet users do not have a voice in corporate decision-making (unless they own stock and exercise voting privileges). This is not hands-off government, this is hands in the pockets government.

This makes it sound as if voters have much of a voice in government decision-making. This, along with turning to government to solve perceived problems, particularly when it has to do with corporations, could be labeled naive and reflexive. As if government agents are disinterested and altruistic. Public Choice Economics 101. I don’t see the difference between hands-off government and hands-in-the-pockets government. In any case, either type is an oxymoron. Government is always putting its hands in other people’s pockets, often on behalf of big corporations. Why are people still surprised at regulatory capture? I’d be surprised not to see it.

Libertarian idealism is great in theory, but in practice it is co-opted by the interests of those who have risen to the top in business and now want to solidify those gains by making it difficult for others to take the same level playing field they enjoyed when they were smaller.

This is not libertarian ideals in practice. The only way the guys at the top in business can do this successfully is through the government. This is the very opposite of the libertarian ideal; it is not libertarianism in action. It is precisely why much corporate regulation is actually proposed by the big players in an industry once they’ve risen to the top, not by forward-thinking, altruistic politicians. What the objection actually describes is Republicanism, which pays lip service to liberty and free markets but in reality is corporatist. But the Democrats are corporatist too, in a different way. The existence of internet regulation and the FCC just serves to support the state-corporate plutocratic partnership.

Libertarians do not suggest regulatory capture as a solution. We suggest abolishing the FCC so that there is nothing for Google or any other corporation to capture and no political reason for them to feel they need to do so.

Google is great and I would love to see government stay out of a fair fight. This isn’t one, and you’re rooting against your own best interests, unless of course you own stock in Google or Verizon.

What is fair about a fight in which those with the best political connections — usually the wealthy and big corporations, mind you! — can employ the massive force of the government to impose their will on those who disagree? This generally is not good for the little guy. In fact, if this issue weren’t thrust into the political arena, it wouldn’t even be fair to call it a fight. Politicizing the issue and vying for control over the minds, bodies, and property of others against their will is what turns this into a fight. It is not in my best interest (properly conceived) to force others to let me use their property the way I want.  Government regulation of telecoms has also gone hand-in-hand with invasion of privacy, such as government snooping after “terrorists” and whatnot. And do we really want to open the door to Hollywood, the RIAA,  indecency police, and Homeland Security influence on internet regulation?

Allowing Google and Verizon to write regulations for themselves is like letting the financial industry regulate itself. (How well has that worked for us?)

As I’ve pointed out, Google and Verizon cannot write regulations without Congress and the FCC. Moreover, the financial industry most certainly was not left to “regulate” itself. It is shot through and through with government regulation, regulation that failed, that will continue to fail, that is in fact counter productive. Regulation is what screwed up the rating agencies, making them worse than useless. Government interference in the housing market and the money/credit supply is what created the housing bubble upon which the infamous credit default swaps were built. Regulatory capture happened and will continue to happen in the financial industry. It has and will continue to happen with the internet so long as the government seeks to regulate it.

Moreover, the politicians and bureaucrats are ignorant of the very things they are regulating. Regulators didn’t catch Enron. They didn’t catch Madoff’s scam and they ignored the guy who did. They didn’t understand credit default swaps. Does anyone really expect them to understand how the internet works, what business models work best, and what consumers really want? The late, and unlamented, former Senator Ted Stevens, famously referred to an email message as “an internet” and described the internet as a “series of tubes” (referenced in the post title). This man chaired the Senate commerce committee for years, overseeing a large overhaul of the telecommunications bill and “authoring” S. 2686, the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006.

Do telecoms understand the technology better than politicians and political appointees? Yes, they do. That’s precisely why they should not be allowed to police themselves.

What you say!!!

The illogic of this is mindboggling. I do not understand how “telecoms understand the technology better than politicians and political appointees” leads to “That’s precisely why they should not be allowed to police themselves.” Is this based on fear? I’m more afraid of politicians and political appointees. They have much more power and much less accountability. That makes their ignorance all the more worrisome. At least companies have to compete with one another for (voluntary) customers and revenue.

I think most people do not understand the extent to which the telecom and internet industries are regulated by governments already, leading to myriad problems, including distorted and decreased competition. Separate economy and state, and corporations would have far less power.

What I am advocating is defending the status quo. If the status quo must be defended by regulation, then I am for government regulation.

Why defend the status quo? What’s so special about it? Change can be good. Ask Obama. Seriously though, by what right can anyone use regulation to maintain the status quo?

Left alone, I’m afraid internet would go the way of television — mostly garbage for free and very dumbed down, the more you pay, the better. My other biggest concern is lack of access to information by people who are low income, or schools on limited budgets, etc.

The internet is for porn! Seriously though, I’m fond of Sturgeon’s Law: 90% of everything is crap. Still, there is a lot of great, free content on the internet. That would be the case even without net neutrality. And I see no reason why non-commercial sites like Wikipedia would slow to a crawl and become hard to use, as some have irresponsibly claimed.

Peter Suderman said it well:

And, of course, that’s the big picture here: allowing and encouraging a diversity of feature sets and service options for content providers and consumers. Neutrality advocates stress the concept of equality for a reason — the goal is to ensure a level of sameness amongst consumers. But when it comes to information-service markets, especially the growing world of mobile data access, not all plans, phones, and networks are created equal. But that’s as it should be, because not all consumer needs are the same. Those who want more should be able to pay for it. Those who don’t shouldn’t have to.

Broadband may be becoming so voluminous and cheap that we’ll effectively see net neutrality for most users by default. But if this turns out not to be the case, and traffic needs keep up with expanding supply, then we might not see net neutrality fully realized in all respects. If net neutrality is not what would arise in an unhampered market, then so be it. It won’t be the end of the world and the poor will not be more unable to access the internet (at reasonable speeds) than they already are. I expect they will be better off.

Free wifi with reasonable speeds is offered by a growing number of businesses, including coffee shops and restaurants. Even Sam’s Club will soon be offering free wifi to shoppers. Businesses have an incentive to do this as a loss leader, to get customers inside to sample and purchase their products and other services. Companies like Google want everyone to be online and having a good experience; it’s better for their bottom line.  Even Verizon benefits from providing customers a satisfying internet experience.

Tell Googlizon to do no evil, but do it for the right reasons.²

Cross-posted at Is-Ought GAP.

1. Confused by this sentence and the title? The title is a mash-up of a few geeky internet memes. Know your meme, and also check out this Wikipedia article and this YouTube video. ↩

2. Googlizon, for those who haven’t figured it out, is my Japanese Godzilla-style mashup of Google and Verizon. ↩