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Finding Bias in Net Neutrality

"Net neutrality" won't work as advertised.

By Will Offensicht  |  January 7, 2018

It's really too bad that liberal commentators have become so fond of hyperbole.  Nancy Pelosi said that the Trump tax cuts were theft from the government and would lead to multiple deaths because the government would no longer be able to provide essential services, which is so extreme in the absurd that it devalues whatever legitimate criticism she might have.  In the same way, liberals claim that the FCC changing the manner in which the Internet was regulated would lead to the end of the Internet as we know it.  Their constant "end of the world" rhetoric means that if the world actually does end, as many people believe it will, we won't believe whatever they write about it.

The main talking point in the "end of the Internet" hyperbole was the suspicion that the FCC would retract Obama-era rules requiring net neutrality - even though relatively few people understand what this means.  As it turns out, the furore over "net neut" as it came to be called was a straw man argument.

Back in 2014, President Obama asked the FCC to regulate the Internet under a different law.  From its founding, the Internet had fallen under Title I of the Communications Act which applies to "information services," which are regulated lightly.  Mr Obama asked the FCC to reclassify the Internet as "telecommunications services" which are regulated much more heavily under Title II.  Mr. Obama's rationale for moving the Internet to Title II was a court case which had declared that Title I did not offer the government enough authority to impose "net neutrality" regulations he wanted.

In May of 2017, Chairman Ajit Pai, who was appointed chairman by President Trump in January, voted to approve a proposal to move the Internet back to Title I where it had been for many decades of extremely rapid growth.  Mr. Pai had been on the FCC when Mr. Obama's previous order was carried out, which he'd described as "a radical departure from the bipartisan, market-oriented policies that have served us so well for the last decades."  His desire to undo Mr. Obama's change to Internet regulation was no surprise, which no doubt is why Mr. Trump appointed him chairman.

Mr. Obama's "suggestions" that the Internet be put under Title II included the demand that ISPs would not be permitted to block any web site, that they could not slow any services or speed up others, and that ISPs could not offer "paid prioritization" to create "fast lanes" and "slow lanes" on the Internet.  This desire that all Internet traffic be treated equally is the essence of "net neutrality."

Since the fiber optic channels which carry Internet traffic are owned by various companies, telling them how to handle their traffic and how much to charge would be like telling the airlines that all passengers had to be charged the same amount of money for each trip.  Readers with long memories will remember that airline routes and prices used to be closely regulated by the government, and indeed, the fare for travel between two cities was the same regardless of airline, time of day, or time of the year.  This led to half-empty planes most of the time and high fares all the time to cover the costs, since there were no competitive pressures to drive ticket prices down.

Airfares remained high until they were deregulated, at which point air traffic boomed as discount airlines sprang up to compete with the legacy carriers.  Air travel today my be rather more crowded and unpleasant, but it is also available to the masses which it wasn't back then.

Similarly, as one would expect, investment in Internet cables dropped after it seemed that the Internet would be as heavily regulated as the airlines of days gone by.  If prices are to be regulated, there would be no way for new entrants to recoup their infrastructure costs vs the existing services which have already long since paid for installing their cables - so naturally, there wouldn't be any new entrants, and costs would rise for all.

Blast from the Past

Title II is part of the Communications Act of 1934, predating even President Trump.  It gives the FCC very broad regulatory authority including the ability to dictate prices if it deems this necessary. Title II could allow the commission not only to enforce complicated rate-making schemes via tariffs and price caps, but also to impose technical mandates, wholesaling obligations, or literally anything else lobbyists can dream up and ask for.

For example, at the time Mr. Zuckerberg founded Facebook, MySpace was the dominant social media offering.  If Mr. Zuckerberg had had to get FCC permission to offer his new service, what would MySpace lobbyists have done?  Of course, as a startup, Facebook would have had few if any lobbyists but as an established incumbent, MySpace would have had plenty.

Under Title II, the FCC could have levied a tax on each Facebook member, or forced Facebook to charge membership fees. Not having many users, Facebook would have lacked the ability to rouse its supporters to protest; indeed, it probably would have had an impossible time gathering users at all.  A smart man like Mr. Zuckerberg would have chosen to express his talents in some other line of work.

Uber and Lyft provide an example of how new entrants can disrupt a market and become too big for bureaucrats to squash as long as they are not in an environment where approval to enter business is required. As startups in "information services," these companies operated what were, in effect, taxi services, but outside of the mammoth regulations and labor-union agreements that make normal taxi services so outrageously costly and unpleasant.

The sclerotic taxi bureaucracies did not react quickly enough; by the time they realized the threat, Uber and Lyft were large enough, wealthy enough, and popular enough to fight back when taxi companies tried to keep them from offering services customers liked better.  Even so, though, the taxi regulations are limited in scope.  Would Uber have gotten off the ground at all if the taxi companies had been able to lobby the FCC to force ride-sharing to charge, say, twice as much as standard taxi fares?

As important as low prices and competition are, though, the Internet has a far more important purpose: supporting liberty.  America has always enjoyed a free press, but as an old saying goes, our presses are free "to every man who owns one."  With the Internet, though, every American can be his own publisher without requiring a fortune; this lets everyone's views get out into the public square, most particularly those views which are despised by our elites, as nearly all conservative perspectives are.

We suspected at the time that Mr. Obama wanted to seize control of the Internet to minimize his political opponent's opportunities to criticize him.  Mr. Obama's motivations became clearer in a recent radio interview reported in the Asia Times:

"One of the dangers of the Internet is that people can have entirely different realities," Obama told listeners of BBC Radio 4's Today program. "They can be cocooned in information that reinforces their current biases."

He also singled out the issue of fake news and expressed concern about a future where facts are discarded. Obama felt such actions were distorting people's understanding of complex issues and spreading misinformation.

Finding common ground, he said, could only be achieved through a diversity of views[emphasis added]

He's a fine one to talk about a diversity of views!

We've pointed out that liberals in the mainstream media have spread fake anti-conservative stories for years and show no signs of changing their ways.  Not only that, the Obama administration weaponized the IRS to attack his political enemies, so it's pretty clear that had Hillary succeeded Mr. Obama, she'd have used Title II to shut down web services and block users who spread whatever her allies deemed to be "fake news."

"The question has to do with how do we harness this technology in a way that allows a multiplicity of voices, allows a diversity of views, but doesn't lead to a Balkanisation of society and allows ways of finding common ground," Obama added.  [emphasis added]

"Harness this technology" is Obama-speak for controlling what may be said on the Internet.  We're already seeing conservatives blocked from You Tube and Twitter, and Facebook's definition of "fake news" leans definitely to the left.  Leaving in place a redefinition of the Internet which gave the government power to define services and regulate prices would have silenced any views liberals didn't like.

Contrary to the hysterics who proclaimed the "end of the Internet as we know it," leaving the Internet under Title II would have allowed a President Hillary to shut off innovation and any content her minions disliked.  That's another reason to be grateful we got President Trump, and a reason to oppose any government meddling in the freedom of the Internet.