Why are we so eager to regulate the Internet?

[Roxanne Appleby]

The following is from an editorial that I thought raised some good points about the "Net Neutrality" debate. I'm no expert so I can’t debate the specifics, but I do have a general warning, a prediction, and a recommendation:

Warning: Beware billion-dollar companies that affect to support "populist" policy preferences. That is, don't trust them for a heartbeat.

Prediction: Given what this piece says about the likely litigation environment under "net neutrality" regulations, should they become law the event will be remembered in the future as the moment when the explosive-growth phase of the Internet ended and was replaced by much more modest expansion. Related to this, it will be the beginning of the end for small ISPs, because only giants will be able to absorb the litigation expense and risk.

Recommendation: Things are very fluid in the information transmission business right now. Big phone and cable companies are butting heads, data-through power lines may be near, Wi-Max may be coming, and who knows what else. This is no time to cool things down with a raft of new federal regulations, and a potential lawyers' feeding frenzy. Better to let it all shake out for a few years, see where we're at, and if needed, with as light a touch as possible, make changes to correct real abuses, not imagined or "potential" ones.


Net Loser

Chances are that by now readers have heard the term "Net neutrality," even if they haven't figured out what all the fuss is about. This week, the controversy reached the Senate, with Net neutrality proponents attempting to write a whole new layer of Internet regulation into law.

A recent incident may illuminate the controversy for those wondering what both sides are after. Several weeks ago, users of Cox Communications' broadband Internet service found that they could no longer access Craigslist.org, the free classifieds site. Some bloggers immediately smelled a rat -- Cox's parent company also owns newspapers, which compete with Craigslist for classified ads. In a letter to the editor last week, Senator Ron Wyden (D., Oregon) cited the Cox incident as an example of why we need Net neutrality rules. Without them, supposedly, Verizon, Comcast, Cox and other Internet access companies would control users' Internet experience to the detriment of consumers.

Well, not quite. It turns out Cox had installed another company's security software to protect its users, and a bug in that software inadvertently cut users off from Craigslist. But don't take our word for it. Craigslist founder Craig Newmark, no enemy of Net neutrality, said this about the incident on his blog: "The whole thing was exacerbated by folks talking about Net neutrality," adding for good measure: "None of this was deliberate" by Cox.

Nevertheless, this is a teaching moment. Net neutrality advocates say we need new regulations for the Internet to make it illegal to do what Cox was supposedly doing. Of course, Cox is innocent in this case -- but this is precisely the point. There are all kinds of innocent or inadvertent ways that a user's access to a given site can be disrupted or slowed today. Under a Net neutrality regime, Cox could well have been subject to investigation, sanction and lawsuits for what amounted to a bug in someone else's software. This is so because most versions of Net neutrality would create a legal obligation for companies like Cox to manage their networks in a "nondiscriminatory" manner. This may sound simple, but it's not.

As it is, the big phone and cable companies, which also offer Internet service, try to ensure that a user's experience is "optimized." They have every business incentive to do so if they want to keep those customers. That this sometimes seems hard to believe (say, when there are delays in downloading a streaming music video) is testimony to how difficult a task that is. Exposing these companies to litigation or prosecution for not doing this to some Web site's satisfaction is not going to make the task easier.

Meanwhile, Google, Microsoft, Yahoo and other Net neutrality proponents seem to want it both ways. They insist both that this is pro-consumer legislation and that the best thing is for consumers to pay for things that Google and other content providers would rather not. Net neutrality only became a cause of these companies and of groups that favor more more regulation in general when some phone companies suggested they might want to charge Google or other content providers for priority access to their networks.

No way, shouted Google and its allies, many of which have fabulously rich stock prices. Far better to charge individual consumers. Well, the American Consumer Institute, a Washington think tank, actually asked an economist to look into whether this is true. In his 40-page paper, Larry Darby's answer is that pricing flexibility is good for consumers.

He cites the newspaper industry -- in which the costs of providing news are split between readers and advertisers -- as an example of the kind of "multisided market" that can develop when businesses are free to charge whoever is most willing to pay. Mr. Darby's conclusion is that barring network operators from charging for value-added services would be bad for consumers. "The practice of 'end users only paying' evolved in, and was suitable for, the world of . . . voice message only technology," Mr. Darby writes. "But, Congress should not lock that business model into a market for which it is ill-suited -- and certainly should not do so on grounds that consumer welfare is thereby enhanced."

 

[Stella_Omega]

"WE"???

Who do you know that is "eager to regulate the internet"? Certainly not me. Anyone here think it's a good idea?

 

[Joe Wordsworth]

"WE"???

Who do you know that is "eager to regulate the internet"? Certainly not me. Anyone here think it's a good idea?

*raises hand*

 

[Stella_Omega]

*raises hand*

Why?

(The single word is too short for the forum's liking)

 

[rgraham666]

"WE"???

Who do you know that is "eager to regulate the internet"? Certainly not me. Anyone here think it's a good idea?

Me, as a matter of fact.

The 'freedom' of the Internet started with an illusion.

Back in the days of dialup it only looked like the internet was unregulated. In fact, the phone companies were regulated to be common carriers. They sold bandwidth to ISPs and the ISPs sold it to customers. The phone companies were the highways and the ISPs were the vehicles.

The broadband industry more resembles the railroads. There isn't a lot of competition. You are pretty much going to have to use a single company in your area for broadband, which gives them huge market power. Look at history to see how the railroads misused their market power.

I can't understand. The telecommunications companies have made it quite clear that they intend to allow 'special service' for those willing to pay. Those who can't pay will be relegated to a secondary tier of service. This will make it very hard for small companies to stay in business. Lit, for example, will suffer. Either they'll have to pay much larger fees to reach their customers promptly, or they won't be able to reach their customers promptly. They might have to become a pay site to stay in business.

Strange, if government regulates business, that's bad, unfair interference. But if a business interferes, makes business difficult, that's good.

 

[rgraham666]

Never mind. No need to regulate the Internet.

Joe and I are on the same side so the universe is coming to an end.

 

[Roxanne Appleby]

The broadband industry more resembles the railroads. There isn't a lot of competition. You are pretty much going to have to use a single company in your area for broadband, which gives them huge market power. Look at history to see how the railroads misused their market power.

But it's not true that "you are pretty much going to have to use one company" for broadband. Right now I have DSL through a medium size ISP, but I could have broadband through my cable company or the phone company's DSL. The phone company will soon offer a better system that uses the regular phone line. Wi-Max may be coming soon, and the power companies may get into the game. So right now I have three choices, and I may have five soon. So why do you say "one company"? If that were true I might see a need for regulation.

 

[Guest]

Never mind. No need to regulate the Internet.

Joe and I are on the same side so the universe is coming to an end.

BWAH!

 

[Joe Wordsworth]

Why?

(The single word is too short for the forum's liking)

Economically, I'm just generally opposed to any recreational turned desireable turned necessary service or product lacking regulations on its distribution and availability, left to chance. If we were talking about the distribution or availability of comic books or candy bars or the latest fashion magazine or Vince McMahon's XFL sports franchise... I wouldn't care about its being regulated or not. But we're talking about phones or public transportation or radio or television or the internet... we're talking about a thing that is quickly becoming the most essential service on the planet, aside from food and shelter.

Personally, I think there need to be clearly defined protections for the internet, regulations guaranteeing the existance of certain things about it I believe are essential to its propogation and positive employment (no charging for e-mail, as an example). I think there ought be careful examination of copyright protections and distribution of information, set down and regulated legally instead of litigiously.

I think, and this is a truth, that the hesitation of people to consider regulation or agency control of a thing is a dangerous ignorance--and dishonors the notion of government-in-essence.

 

[rgraham666]

But it's not true that "you are pretty much going to have to use one company" for broadband. Right now I have DSL through a medium size ISP, but I could have broadband through my cable company or the phone company's DSL. The phone company will soon offer a better system that uses the regular phone line. Wi-Max may be coming soon, and the power companies may get into the game. So right now I have three choices, and I may have five soon. So why do you say "one company"? If that were true I might see a need for regulation.

Do you live in a large city, Roxanne? It sounds like it. But in a lot of places, like the case was with the railroads, people only have one company to choose from.

And you may have five in the future. But the power companies may not be willing to invest as profits may not be large and guaranteed. And Wi-Max may end up being provided by the current telecommunications companies, and may not work.

So currently, you only have three. And who own your ISP? So it may only be two.

And with the way the rules are changing one company may own both your cable company and your phone company.

And your 'independent' ISP goes through your cable company, so if the cable company stops being neutral your ISP will have to stop as well.

It's not that I worry about the telecommunications companies being put out of business or becoming poor, they won't. Their service is in high demand.

It's a freedom of speech thing. Every one should have equal access to it, not just the wealthy.

 

[FallingToFly]

But it's not true that "you are pretty much going to have to use one company" for broadband. Right now I have DSL through a medium size ISP, but I could have broadband through my cable company or the phone company's DSL. The phone company will soon offer a better system that uses the regular phone line. Wi-Max may be coming soon, and the power companies may get into the game. So right now I have three choices, and I may have five soon. So why do you say "one company"? If that were true I might see a need for regulation.

Lucky you! In this area it's one of two choices:

Phone (and in my case DSL)
Cell Phone (and no DSL, not to mention no way to access Internet)

Some people have lots of choices, some people, not so much.. and especially in my particular part of Florida, if you have a home phone- you MUST have the carrier I have. They are the only carrier, AND they own all the access lines. So we get shafted on a regular basis by rate hikes and can't get around it. It sucks, big blue-balled donkey dick, but we have learned to live with it. And get everything, such as guarantees that "No, we won't hike your rate for DSL ever, this is a limited time flat fee offer to have 14.99 DSL for as long as you have it" in writing. It comes in handy.

 

[Liar]

The regulations we need is not on the ISP's service. They should be free to sell whatever product they want to.

The regulations we need is on how the ISP market their services. The consumer MUST know what it is they are buying. Especially when, like Joe says, it is such an essential service we're talking about.

here's a suggestion: Full Internet Access should be non discriminating and equal access to all publicly available parts of the net. Only an operator that does not apply favorism or filter access to some ther should be allowed to call their service that. The others can call their service...something else. Streamlined Internet Access would be a possible name.

The exception to this would IMO be access to content that is illegal. Kiddie porn, for instance.

 

[Roxanne Appleby]

Do you live in a large city, Roxanne? It sounds like it. But in a lot of places, like the case was with the railroads, people only have one company to choose from.

And you may have five in the future. But the power companies may not be willing to invest as profits may not be large and guaranteed. And Wi-Max may end up being provided by the current telecommunications companies, and may not work.

So currently, you only have three. And who own your ISP? So it may only be two.

And with the way the rules are changing one company may own both your cable company and your phone company.

And your 'independent' ISP goes through your cable company, so if the cable company stops being neutral your ISP will have to stop as well.

I live in a city of 100,000. My ISP is independent but does have to use phone company resources for its DSL. But the phone and cable companies are completely independent platforms and they are competing vigoursly. I mentioned that "phone company will soon offer a better system that uses the regular phone line." I forgot to say that this new system is really about the phone company offering cable, plus internet. (And the cable companies are fighting hard in the legislature to stop it! Everyone hates the real monopolist of recent decades - cable - so much that they're losing that fight. LOL!) Those other plausible coming technologies - Wi-Max and data-over-elecric lines will also be independent platforms.

So at the very least there will be two big companies using independent platforms providing internet everywhere in my state, and possibly four companies and platforms soon. That "cable vs. phone company" situation is about to become very common around the US. It's already the status quo in Texas and Indiana.

Given this reality let me suggest an alternative to address the real concern, which is coming under the thumb of a single provider: Anti-trust laws. They're already on the books, and there's a mature regulatory regime in place. Given the fact that we are talking independent platforms (phone lines, cable lines, power lines, beaming through the ether) keeping ownership separate will be easy.

"Net neutrality" gives the federal government police powers in the area of Internet content. You can pretty-up the description of it all you want, but that's what it boils down to. Are you sure your really want to go there? To address "potential" threats, not even demonstrated ones?

 

[Stella_Omega]

Okay, duh, so it's obvious to me that we are talking about regulating internet access- okay, I'm in favor of that More coffee anyone?

 

[Liar]

Okay, duh, so it's obvious to me that we are talking about regulating internet access- okay, I'm in favor of that More coffee anyone?

Well..um...kind of.

Here is a simplified explanation:

The bill wants to forbid Internet providers from regulating their customers' access to sites. For instance, a nightmare scenario: They could make Literotica load slower for you, or not at all.

They can do this today, but nobody does. So why there is a need to try to eliminate a possible (maybe not even probablt) future threat, I can't say.

The bill wants to regulate the ISP's freedom to regulate. I think that's wrong. I think the consumer should dictate that by choosing an ISP that gives them the service they want. That however, provides that all consumers have a choice at at least one ISP that doesn't regulate their Internet access. Might be naive of me to think that will be the case.

 

[Joe Wordsworth]

O.k... I can make this more interesting. And, this is being honest and unpopular (because we just don't like possibility here, sometimes)...

There are arguments that participate in legitimacy with regard to restricting content on the internet via regulation in the form of governmental control. The notion of "entirely free speech = internet = protect at all costs" is made in light of very positive reasons for allowing its restriction on access (seemingly undisputed), usage (likely not-harshly-disputed), /and/ content (doesn't seem the popular category).

 

[Roxanne Appleby]

Given the political makeup of AH, it's not surprising that in political threads I frequently find myself single-handed against five, six or more voices on the other side of an issue. I don't mind this, but don't relish it, either. I don't go out of my way to be a "controversialist," but don't hesitate (or fear) to weigh in on issues that I care about or think are important.

Here's my problem, and this is not directed at any particular individual here: I often get the sense that some people jump in and express opinions without reading the previous posts made by the person on the other side – me. So they express concerns that have already addressed, assert facts that have already refuted, or argue for proposals that have already been shown to have large and negative unintended consequences. They don't engage the previously raised points because they have not read them.

I understand and sympathize with the impulse to jump right in with an opinion, especially in a thread like this where the issue was raised in a rather lengthy post (934 words: 234 mine and 700 a newspaper editorial's). I can't do much about the opener, but apologize for the fact that some of my subsequent posts aren't as streamlined as they could be. Still, it often leaves me scratching my head.

Edited to add: The article pasted in the orignal post provided evidence that there are very signifigant and negative unitended consequences to the proposed regulations at the root of this discussion. No one has addressed this, and it was the point of opening post.

 

[Stella_Omega]

I plead guilty..
And add that this is a social forum, and me, I find politics, and social issues discussions. decidedly uncongenial. It's not that this is not the place for them... but they do clutter the board on some days! Make it hard to find the mindless twittering threads that I come here for most often.

I do try to stay out of them, as much as possible and I'll try harder...

 

[Joe Wordsworth]

Someone asked a question, I gave an answer...

I don't really understand the problem--unless we just have a thing about slight threadjacks (in which case, woe be unto most everybody).

 

[Roxanne Appleby]

I plead guilty..
And add that this is a social forum, and me, I find politics, and social issues discussions. decidedly uncongenial. It's not that this is not the place for them... but they do clutter the board on some days! Make it hard to find the mindless twittering threads that I come here for most often.

I do try to stay out of them, as much as possible and I'll try harder...

Oh darn, now I feel bad. I would love to benefit from your thoughtfulness (in both senses of the word) in political threads, which often certainly could benefit from a lot more of that (in both senses of the word). For your own happiness, though, if you don't enjoy the intellectual mud wrestling for its own sake at least a little bit then it's probably wise not to engage. It's a matter of taste.

I too enjoy flirting, sharing humor, sharing warm feelings, spitting out venom, and all the rest that happens in the non-politicals. I think the political threads do add some weight to this place, though. It wouldn't be the same without them, that's for sure. For some a steady diet of sweets but no meat would pall.

 

[Stella_Omega]

I enjoy the writing threads and shop-talk that I get here. They've been kinda meaty, once in a while.

But politics just send me round the bend. Mostly, I feel so damned helpless. I, by myself, can only do a few things about the social wrongs I see around me. And debating is almost always useless- One either preaches to the choir or wastes time argueing with someone that already has their mind made up. And some types of debating tactics make me want to murder, all too often, someone I like under other circumstances. It's too hard for me to disengage.
The only time I enjoy these things is when I am in a mood to beat someone senseless- And what a waste of energy that is, and no skinned knuckles to show for it...

One of these days, I'll be able to disassociate my emotions from these issues. Untill then, it's so damn uncomfortable!

 

[Stella_Omega]

... Did I actually stop this thread? Damn, I am so sorry if so.
Nah, must be my arrant egotism.

 

[Roxanne Appleby]

... Did I actually stop this thread? Damn, I am so sorry if so.
Nah, must be my arrant egotism.

Nah - I think it was me asking folks to read a 920 word post before expressing an opinion! Not that I blame them much - life is short, and political threads can be sooooo looooong.

 

[SEVERUSMAX]

I live in Houston. We have at least 3 choices. Given that different areas appear to have different levels of competition, perhaps it is best to simply leave this matter to state, provincial, or local governments? Just a thought. It doesn't seem like an issue with a "one size fits all" approach. As long as it is only rates and availability being regulated by a local entity (but not overregulated), I'm cool. If they continue this anti-sex, anti-porn thing, of course, they can kiss my ass. I'm not cool with that. Just my 2 cents.

All in all, in principle, I would have to side with Roxanne. We don't need the Feds coming down like a ton of bricks to make sure that the ISPs "behave" themselves. Only local regulation of monopolies, which is where she and I would probably disagree, from the sound of it.

After all, consider what party runs the Federal Government. Do we really want President Bush, his appointees in Federal agencies, and the GOP-controlled Congress deciding what is appropriate Net content?

 

[Roxanne Appleby]

I live in Houston. We have at least 3 choices. Given that different areas appear to have different levels of competition, perhaps it is best to simply leave this matter to state, provincial, or local governments? Just a thought. It doesn't seem like an issue with a "one size fits all" approach. As long as it is only rates and availability being regulated by a local entity (but not overregulated), I'm cool. If they continue this anti-sex, anti-porn thing, of course, they can kiss my ass. I'm not cool with that. Just my 2 cents.

All in all, in principle, I would have to side with Roxanne. We don't need the Feds coming down like a ton of bricks to make sure that the ISPs "behave" themselves. Only local regulation of monopolies, which is where she and I would probably disagree, from the sound of it.

You don't want to leave this to state or local governments. The industry is one where there are advantages to consumers that can be provided by big national or multi-national firms, like google, for example. You don't want to create a balkanized regulatory environment with a patchwork of conflicting or duplicative regulations. The Federalist Papers made the case for this perfectly and nothing has changed.

Plus, it's too easy to buy legislatures and local governments. An example is the cable industry, which is in bed with local governments because the locals get 5 percent of cable revenue as phony "franchise fees," ostensibly to cover the cost incurred by the cities from the cable companies running wires all over their towns. Everyone knows it's a sham and just a cash cow for the cities. It raises consumer cable bills and provides them no benefits. Yet now the locals are working overtime in state legislatures hand-n-glove with cable companies trying to stop the phone company from busting their monopoly. They're both cryng crocodile tears, claiming the phone company will "cherry pick" and leave low income neighborhoods behind. It's all bogus, and all about money. So no, you don't want to leave these things to the local or state level.