Written by Wayne Crews
In what the Washington Post referred to as Federal Communications Commission (FCC) Chairman Tom Wheeler’s strongest endorsement yet of net neutrality, he said:
Public policy should protect the great driving force of the open Internet: how it allows innovation without permission…. This is why it is essential that the FCC continue to maintain an open Internet and maintain the legal ability to intervene promptly and effectively in the event of aggravated circumstances.
Other outlets regard Wheeler’s recent pronouncements as being more ambiguous. Does he favor the right to offer variations in prices and services, or not?
I see matters opposite from the proponents of net neutrality; I think variations in pricing and service are essential, as is the creation of future generations of networks, which can’t happen optimally without such fundamental property rights. (Yes, property rights.)
I recently cosigned with a group of economists a letter of congratulations to Wheeler in which we stressed:
The economic evidence…is clear: in all but a few areas, communications networks no longer have the characteristics of natural monopolies, and should no longer be regulated as public utilities. Indeed, the convergence of the communications sector into the dynamic, intensively competitive Internet ecosystem is now virtually complete.
Whatever happens with Verizon’s challenge to the FCC’s December 2010 Order on “Preserving the Free and Open Internet” in the United States Court of Appeals for the D.C. Circuit, the “openness” doctrine will persist, potentially holding competitive networks (yes, plural) and critical infrastructure advances down to the speed of government.
I espouse the very opposite of the neutrality doctrine: the FCC should safeguard the ability to develop completely non-neutral networks and “splinternets.” The “background hum” of the existing “neutral” Internet as we know it today will thereby expand faster.
Competitive responses to unreasonable and abusive non-neutrality and misbehavior (not political or bureaucratic ones) must happen to create the foundation for the robust communications networks needed by our descendants. Bureaucracies like FCC benefit from locking in what happens to exist today and creating imaginary constructs for themselves to regulate.
New models of business are emerging. Content and infrastructure firms increasingly overlap, and invade each others’ turf. Neutrality, which it is not neutral, makes perpetual enemies out of firms that should be both competing and cooperating, just as we individuals do in our private lives. Neutrality will undermine innovation and the constant churn of “creative destruction.”
There are at least 15 reasons I insist net neutrality is poor philosophy, economics, law, policy and politics, and I hope FCC staff and policymakers disinclined toward regulation will take a look at them (below). Broadly, our free enterprise system as a whole is young; in telecom, it’s a toddler. I’ve tried to ring the alarm; let me try it again.
Part 1: Net Neutrality vs. Infrastructure Wealth
Part 2: An Alternative Case for Agency Neutrality
Part 3: The FCC’s Disdain for Markets
Part 4: FCC Order Creates Political Vulnerability for All Market Participants
Part 5: The Fallacies Motivating Net Neutrality
Part 6: Does “Market Failure” Demand Neutrality Regulation?
Part 7: Mandatory Dumb Pipes? But Why Sacrifice Genius?
Part 8: The Essential Elements of Non-Destructive Rulemaking
Part 9: How to Expand Consumer Choice and Access to Content
Part 10: Who’s Discriminating Online?
Part 11: The Inappropriateness of Compulsory Transparency
Part 12: Why Net Neutrality Threatens Homeland Security and Cybersecurity
Part 13: What FCC Should Do Now
Part 14: What Should Congress Do About Net Neutrality?
Part 15: Can We Please End This. Please.
Wayne Crews is vice president for policy and director of technology studies at the Competitive Enterprise Institute. Prior to joining CEI, he worked at the Cato Institute, the U.S. Senate, and the Food and Drug Administration.