Posts Tagged ‘broadband’

Net Neutrality Lunges In The Wrong Direction

Thursday, May 18th, 2017

The Left specializes in creating mental spam. Every few weeks, there is a new distraction that they hype into an end-of-the-world style issue, not so much because they care about the issue, but because they need to keep their base panicked and angry so that they become a personal army to crush opposition and demand Leftist power.

Currently the Leftism media-political establishment is raging about net neutrality:

Federal regulators will move to roll back one of the Obama administration’s signature Internet policies this week, launching a process to repeal the government’s net neutrality rules that currently regulate how Internet providers may treat websites and their own customers. The vote on Thursday, led by Federal Communications Commission Chairman Ajit Pai, will kick off consideration of a proposal to relax regulations on companies such as Comcast and AT&T. If approved by the 2-1 Republican-majority commission, it will be a significant step for the broadband industry as it seeks more leeway under government rules to develop new business models. For consumer advocates and tech companies, it will be a setback; those groups argue that looser regulations won’t prevent those business models from harming Internet users and website owners. The current rules force Internet providers to behave much like their cousins in the legacy telephone business. Under the FCC’s net neutrality policy, providers cannot block or slow down consumers’ Internet traffic, or charge websites a fee in order to be displayed on consumers’ screens.

As usual, the Left wants to confuse one method of addressing a problem with the set of all methods, so that their voters think there is only one way to fix the problem and any deviation from that is treason.

First, we should talk about net neutrality. The original idea of the net was that every node could forward packages to every other node, based on the idea of mutuality, or that each did the same to others. This works in a subsidized or military system, but not in a market, where some sites are massively larger than others. This means that the little guys spend their money and energy supporting Google, Amazon, Wikipedia, Apple, Facebook and Twitter, while the big companies owe them nothing.

This means that net neutrality, as a concept, was dead the minute that the internet was commercialized.

Next, we should talk about monopoly. When a large search engine like Google, or massive site like Amazon or Wikipedia, controls most of the eyeballs, the policies this site uses to list links on its pages regulate who lives and who dies. A site with low Google rank disappears and its business evaporates; a concept that Wikipedia refuses to mention — in a model like that of the mainstream media, excluding its ideological enemies — just drops out of public consciousness. Any concept of neutrality is long dead.

With those in mind, we can turn to a solution. Regulation adds expense and litigation to otherwise thriving industries, displacing little guys and favoring big guys. The consumers ultimately want the ability to see anything they want on the net without consideration of what it is. But they have already lost that, long ago.

Instead, it makes sense to let the market cure this one. If an ISP is blocking your traffic, you can sign up with a competing ISP… except you cannot, because regulation keeps the market small and so you have few options. Instead of piling more bad regulations on top of that, it is time to repeal more laws and let the problem work itself out.

If consumers desire net neutrality as much as they claim they do, they will be willing to put market pressure on their ISPs instead of relying on Big Daddy Government to do it for them.

Why American Broadband Is Expensive And Slow

Tuesday, May 2nd, 2017

As the Left advances its narrative, it likes to blame “capitalism” for many of the problems with consumer services. Looking at internet broadband, it becomes clear that the critics have a point, but have blamed the wrong source.

American broadband is notoriously slow compared to the rest of the developed world and often costs a good deal more than faster services in other countries. In most areas, people have a choice between only a few providers, most of which are content to be equally bad, knowing that as with cellular phone service, users will bounce between them but never like them.

When one does a little digging, the reason for this situation becomes clear: a lack of broadband competition because local regulations make it prohibitively expensive for new competitors to enter the market:

Broadband policy discussions usually revolve around the U.S. government’s Federal Communications Commission (FCC), yet it’s really our local governments and public utilities that impose the most significant barriers to entry.

This seems counter-intuitive because broadband across the country shares the same conditions. Local authorities have enacted very similar rules originally designed to prevent too many firms from laying wire:

States have given municipalities the authority to offer broadband but made it difficult with tons of bureaucratic requirements, he said. “The bottom line is some states have created thickets of red tape designed to limit competition,” he said. Local residents and businesses are the ones suffering the consequences, he argued, pointing to members of the two communities in the audience.

Cities and towns fear a situation where fifteen different cable companies will run lines to homes, disconnecting each other’s wires and making a mess of the backyards and public utility poles they must share. Out of that fear, these municipalities limited utilities and tended to make them public or regulate them heavily, as did the federal government, giving the illusion that this regimen of laws was working.

Instead, the collaboration between federal, state and local governments created markets where regulatory costs make it impossible for new businesses to enter the market and make a profit, which effectively limits competition to whoever got the original cable and telephone (from which DSL lines originate) contracts in the area:

And whose fault is that? Well, that would be the government’s fault. It regulated the cable TV business with a heavy hand since its infancy, giving monopoly rights to operators to string cities with coaxial cable. Those policies have been relaxed, so now it’s easier for a new provider — like telephone companies or fiber-upstarts like Google — to create broadband competition. But the market power of entrenched cable operators and the remaining regulatory hurdles still deter new entrants, suppressing the sort of competition that would make broadband companies more mindful of the needs of customers.

It is expensive enough for a new company to physically run the lines. Regulation introduces many secondary costs: there is paperwork to file, inspectors to pay, and possibly city bureaucrats who must be hired to oversee the process. In addition, the possibility of legal action brought by cities or other companies on the basis of these regulations requires the hiring of lawyers and compliance experts, which also drives up the cost.

In many American industries, we see the same pattern. Capitalism is shoved aside in favor of government, which solves one problem and creates a dozen more. Somewhere in the middle — between raw capitalism and the regulatory state — there could be a flexible zone where informal leaders, like local aristocrats, could make principled exceptions and deliver people the bandwidth they desire.