Internet Freedom–Real vs Imagined

by on December 12, 2007 · 8 comments

Bravo for Larry Downes of ZD Net who has a smart new column out today entitled “Save Internet Freedom–from Regulation.” Downes is referring to the ominous threat posed to the future of the Internet by the Net neutrality bill that Rep. Edward Markey (D-MA) is likely to introduce shortly. Downes points out that:

The Internet has thrived in large part because it has managed to sidestep a barrage of efforts to regulate it, including laws to ban indecent material, levy sales tax on e-commerce, require Web sites to provide “zoning” tags, and to criminalize spam, file sharing, and spyware. Some of these laws have been overturned by the courts; some died before being passed; and the rest–well, the rest are effectively ignored, thanks to the Internet’s remarkable ability (so far) to treat regulation as a network failure and reroute around the problem.

Exactly right. Why then, Downes asks next, “do the same civil-liberties groups that recognize the value of keeping the government out of Internet content want to open a loophole large enough to drive several Mack trucks through?” GREAT question, and one that we’ve been asking on this site for many years.


I suppose it comes down to the inherent trust many liberals and some in the civil liberties community are willing to place in government to do good things when they intervene in the economy. After all, their intentions are good, so we shouldn’t just trust ‘em, right? And they same goes for calls to regulate to preserve Internet freedom, right? If Ed Markey and some FCC regulators knock on our doors and tell us they are here to help, then we should just invite them right on in and let them get down to the business of regulating, right?

Wrong, wrong and WRONG. As Downes correctly argues, “the information superhighway to hell is surely paved with good intentions.” What proponents of regulation often fail to realize is the lesson that the intellectual giants FA Hayek, Milton Friedman, and Thomas Sowell taught us long ago: the best of intentions cannot protect us against the worst of unintended real-world consequences. For example, Downes points to the dismal results of previous well-intentioned regulatory interventions for industries such as railroads and airlines:

Nearly 100 years ago, shippers in cities between the Mississippi and the West Coast, which were largely served by only one road, found that they were being charged higher rates to subsidize competitive tariffs from cities east of the Mississippi, where shippers had several choices. Like those calling today for Net neutrality, the Intermountain shippers demanded “reasonable and fair” rates of carriage. Congress agreed, but it left the definition and enforcement of these deceptively simple terms to the Interstate Commerce Commission.

So, what was “reasonable”? The ICC struggled for decades to answer that single question, spending 20 years and hundreds of millions of dollars before giving up, unable to agree on how to value the railroad’s assets in order to calculate a reasonable rate of return. With the industry consumed by this “simple” effort to make its operations “fair,” other forms of transportation emerged and ultimately put the railroads out of their misery.

More recently, the Civil Aviation Board (CAB), which micromanaged U.S. commercial air travel until 1978, worked to ensure “fair” ticket prices for everyone but in practice created a mess of routes, subsidized carriers, and indecipherable rate structures. Since the CAB was dismantled, air travel has not only expanded but, thanks to market forces, is now also cheaper for consumers.

And what about the Sarbanes-Oxley Act, the law passed in the wake of Enron, WorldCom, and other corporate scandals? SOX requires “transparency” in financial statements, a worthwhile goal, but one that, so far, has cost public companies that weren’t committing fraud billions of dollars in compliance. No one seriously believes that money has helped investors make sense of a single balance sheet.

The problem with “simple” regulations is that they never are–especially when the industry being regulated, thanks to new technologies, is evolving rapidly.

Again, exactly right, and the regulatory problems we experienced in those sectors would likely be magnified many times over if we tried to apply “non-discrimination” regulation to the Internet, as Bruce Owen makes abundantly clear in his latest essay in Regulation magazine.

The proponents of Net neutrality are trying to sell us “freedom” in the form of regulatory chains on the Internet. We shouldn’t buy into their Orwellian doublespeak.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    The network neutrality debate has two perspectives. You have only presented one perspective. And by the way, I agree that we should not have government regulation that “censors” the flow of information on the internet.

    The second, and overlooked, perspective is the responsibility of corporations not to do what you want the government not to do. To put it another way, corporations must not censor the internet themselves.

    Websites such as the Gripeline, TechDirt, Freedom to Tinker, and this forum have exposed numerous attempts by content providers to “manage” the flow of content, even to the extent of forcing third parties to monitor (spy on) networks to actively seek “unauthorized” content so that it can removed.

    If the government should stay out of network regulation then private industry should stay out too. Since, I don’t have much belief in the honesty of corporations to keep their hands clean, I wouldn’t mind seeing network neutrality laws that would fulfill this very limited purpose.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    The network neutrality debate has two perspectives. You have only presented one perspective. And by the way, I agree that we should not have government regulation that “censors” the flow of information on the internet.

    The second, and overlooked, perspective is the responsibility of corporations not to do what you want the government not to do. To put it another way, corporations must not censor the internet themselves.

    Websites such as the Gripeline, TechDirt, Freedom to Tinker, and this forum have exposed numerous attempts by content providers to “manage” the flow of content, even to the extent of forcing third parties to monitor (spy on) networks to actively seek “unauthorized” content so that it can removed.

    If the government should stay out of network regulation then private industry should stay out too. Since, I don’t have much belief in the honesty of corporations to keep their hands clean, I wouldn’t mind seeing network neutrality laws that would fulfill this very limited purpose.

  • v

    Regulations live Steve suggests could be good, but I’d think they’d work best if consumers (or a state attorney general) could just sue misbehaving ISPs when they commit violations, rather than have a government agency actively regulating.

  • v

    Regulations live Steve suggests could be good, but I’d think they’d work best if consumers (or a state attorney general) could just sue misbehaving ISPs when they commit violations, rather than have a government agency actively regulating.

  • http://managingmiracles.blogspot.com/ Steve Schultze

    Adam Thierer has just written another thought-provoking post on TLF/PFF about the well-trod net neutrality debate. He is riffing on a ZDNet article by long-time net neutrality critic Larry Downes. The heart of his (and Larry’s) argument is that the Internet should remain free from meddlesome regulation. I must say that I wholeheartedly agree. Where I take issue, is whether most net neutrality proposals are necessarily meddlesome. This is a critical distinction too fine for Thierer or Downes.

    I agree with Thierer on a great number of issues. He is spot-on when it comes to the perils of presumptive content regulation in the name of child protection. The risks of caving to DOPA-style regulation or other ill-conceived technological “solutions” to the issues that youth face online cannot be underestimated. Closing off vast swaths of the internet to the next generation of online artists, innovators, and entrepreneurs is self-evidently foolish. What Thierer fails to recognize is that the risks he envisions under the banner of “child protection” are paralleled in the world of net neutrality — just not in the way that he assumes.

    (my critique continues at http://managingmiracles.blogspot.com/)

  • http://managingmiracles.blogspot.com/ Steve Schultze

    Adam Thierer has just written another thought-provoking post on TLF/PFF about the well-trod net neutrality debate. He is riffing on a ZDNet article by long-time net neutrality critic Larry Downes. The heart of his (and Larry’s) argument is that the Internet should remain free from meddlesome regulation. I must say that I wholeheartedly agree. Where I take issue, is whether most net neutrality proposals are necessarily meddlesome. This is a critical distinction too fine for Thierer or Downes.

    I agree with Thierer on a great number of issues. He is spot-on when it comes to the perils of presumptive content regulation in the name of child protection. The risks of caving to DOPA-style regulation or other ill-conceived technological “solutions” to the issues that youth face online cannot be underestimated. Closing off vast swaths of the internet to the next generation of online artists, innovators, and entrepreneurs is self-evidently foolish. What Thierer fails to recognize is that the risks he envisions under the banner of “child protection” are paralleled in the world of net neutrality — just not in the way that he assumes.

    (my critique continues at http://managingmiracles.blogspot.com/)</p>

  • http://www.ikeelliott.typepad.com Ike Elliott

    I object to legislation like Markey’s because it ties the network operator’s hands with respect to providing the service that the market demands. Let’s look at one shining example: the VoIP services offered by cable operators. For many years now, these services have used the PacketCable and DOCSIS standards to provide priority to to VoIP packets over the rest of the best effort Internet traffic on the cable network. The cable industry developed these standards for two big reasons: to provide a consistently high-quality voice service to their subscribers, and to avoid investing in antiquated and expensive circuit switching equipment to provide those voice services. In other words, they were trying to compete with the telcos with a service of roughly equal quality and they found a cheaper and more advanced way of providing that service at lower cost than the legacy telco solution. And yes, the cable company charges extra for the voice service. Do we really want to tell the cable company that they can’t prioritize their voice packets any more? Of course not.

    More on my blog at http://ikeelliott.typepad.com/telecosm/2007/12/net-neutrality.html

  • http://www.ikeelliott.typepad.com Ike Elliott

    I object to legislation like Markey’s because it ties the network operator’s hands with respect to providing the service that the market demands. Let’s look at one shining example: the VoIP services offered by cable operators. For many years now, these services have used the PacketCable and DOCSIS standards to provide priority to to VoIP packets over the rest of the best effort Internet traffic on the cable network. The cable industry developed these standards for two big reasons: to provide a consistently high-quality voice service to their subscribers, and to avoid investing in antiquated and expensive circuit switching equipment to provide those voice services. In other words, they were trying to compete with the telcos with a service of roughly equal quality and they found a cheaper and more advanced way of providing that service at lower cost than the legacy telco solution. And yes, the cable company charges extra for the voice service. Do we really want to tell the cable company that they can’t prioritize their voice packets any more? Of course not.

    More on my blog at http://ikeelliott.typepad.com/telecosm/2007/12/

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