Against Monopoly

defending the right to innovate

Net Neutrality

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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A Libertarian Take on Net Neutrality

The cool, hip techno-pundits are usually reliably Obama-liberal/libertarian-lite types. A bit California-smug, engineer-scientistic, anti-principle, anti-"extreme." But okay overall. A soft, tolerant, whitebread bunch.

On the last This Week in Tech, I was pleasantly surprised to hear the always interesting Jason Calacanis voice support for nuclear power; and even more surprised to hear soft-liberal host Leo Laporte echo mild agreement with this. Good for them!

But then they had to revert to form when they, along with Natali Del Conte and Patrick Norton expressed unanimous disapproval of McCain's Internet Freedom Act, since they are all--"of course"--in favor of net neutrality rules imposed by the FCC. McCain's proposed statute would block the FCC's proposed net neutrality rules, which would forbid network providers (e.g. cable companies, telcos, and wireless carriers) from selectively blocking certain types of Internet use.

Got that? The techno-pundits are against regulation (by cable companies) ... so they favor regulation (by the FCC) of the cable companies ... so they oppose government legislation regulating a government agency. They sit there fuming about how disgusting McCain's draft legislation is. So they see that the state is terrible. Yet it doesn't occur to them that it might be a bad idea to trust the government to oversee the Internet. They are against regulation of the Internet, so they support ceding power to the government to ... decide how and whether the Internet should be regulated. It doesn't occur to them that we should simply favor property rights, individual freedom, and the free market. The closest any of them come to this position is John Dvorak, who has a libertarian and contrarian streak, and who often observes on TWIT that there's nothing wrong with tiered pricing--charging more for a fatter pipe, etc.

Is "no regulation of network providers" the libertarian position? It clearly would be if the network providers were purely private. In the libertarian view private property owners determine how their property may be used. There is no "right" to access the Internet. A private network provider ought to be able to offer service on whatever terms he wants; and consumers to accept or reject it. Tiered services, deep packet inspection, prohibition of certain types of uses or even certain types of content--that's up to the providers and customers and whatever deal they agree to. We libertarians believe in "capitalist acts between consenting adults," to use Nozick's phrase (see Rothbard's earlier formulation).

But because of various degrees of corporatism--state favors and protectionism, tax funding of infrastructure, etc.--the service providers are arguably not 100% private. But the solution is not to regard them as essentially part of the state and thus fair game for regulation, but to pair our call for no state regulation of the Internet (no net neutrality regulations) with a call for the abolition of all forms of corporatism, such as various laws that work out protecting larger companies (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).

This is my take, anyway. I am not aware of much informed libertarian analysis on the net neutrality issue. Kevin Carson pointed me to Jim Lippard as "one of the better libertarian writers on net neutrality"--I'll have to take a deeper look, but from a quick glance I'm not sure he's a libertarian; here he writes, e.g., "providers shouldn't be able to block access to competitors' services"--should be able? This seems to presuppose the legitimacy of an overarching state regulation, which is certainly not libertarian.

Update: Leo Laporte must have gotten a lot of flak in the past week for supporting the FCC imposing net neutrality rules on Internet network providers. In TWIT 220, he expresses genuine concern with this. And he seems to get that the issue is not what rules the FCC should impose--which most of his technocratic guests in that episode focus on--but the issue of the danger of empowering the state itself to regulate at all. Most of the panelists at least seem leery of state regulation, but are concerned there is not enough competition in the network provider industry to ensure self-regulation. This concern is understandable, but the pundits should pause to ask: what is the state's role in causing the industry to be the way it is? In addition to being leery of state regulation of the Internet, they should oppose state policies that subsidize and prop up large companies or reduce competition; one of them even brings up the issue of how utilities are given monopoly status by municipalities. So they are almost there. 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 on 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.

Laporte also mentions some kind of split on this issue among EFF board members. I looked at the EFF site and can't find much explicit about net neutrality--no categories, etc. They seem to be trying to keep a low profile on this issue, maybe because they have some pro-state-regulation board members. I did find this recent EFF article by Corynne Mcsherry, "Is Net Neutrality a FCC Trojan Horse?," which expresses the concern that if the FCC just grabs "ancillary jursidiction" to impose net neutrality regulations, who knows what other regulatory powers it might just unilaterally decide to assme the power to impose regulations pursuant to an "Internet Decency Statement." But though McSherry here seems to display healthy skepticism of state regulation, she is obviously trying to leave open the door that some state regulation of network providers might be favored by EFF: e.g., McSherry writes, "If 'ancillary jurisdiction' is enough for net neutrality regulations (something we might like) today, it could just as easily be invoked tomorrow for any other Internet regulation that the FCC dreams up (including things we won't like)." Note the bolded language. And she notes that one possible solution to the FCC's "ancillary jurisdiction" power grab is: "Congress could limit the FCC's power by authorizing to regulate only to ensure network neutrality."

The EFF, if it is to remain principled and a proponent of individual, Internet-related freedoms and "digital rights," must be clear on the enemy of such rights: the state. The moment EFF supports any state agency's regulation of private companies or the Internet, they have succumbed to their leftist confusions and statist sympathies and become worthless as principled defenders of individual freedom.

[Mises blog cross-post; SK cross-post]


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