Contact FreedomWorks

111 K Street NE
Suite 600
Washington, DC 20002

  • Toll Free 1.888.564.6273
  • Local 202.783.3870
LISTEN NOWThe Freedom Files Podcast Episode 49: Project Arizona Part 5Listen Here

Blog

Net Neutrality is theft

09/22/2009

In an article for the Associated Press, reporter Daniel Lovering describes soon-to-be-proposed rules on “Net Neutrality” as “prohibit(ing) Internet service providers from interfering with the free flow of information and certain applications over their networks.”

The cries of “interference” are standard rhetoric from those who support regulation of the Internet, intentionally ignoring the fact that Internet infrastructure isn’t free. The very term, “neutrality”, is a nice-sounding but intentionally misleading description of the policy. Would you call a policy “neutral” by which a customer could walk into a store and demand a service or product that is expensive for the store to provide at the same price as some service or product that is cheaper to provide?

This so-called “interference” is little difference from people in front-row seats at the stadium paying more than those in the 50th row or from large trucks being charged more at the highway toll booth than passenger cars are. It is not only normal, but necessary, for companies to manage demand for their products and recover costs of providing those products with tiered pricing.

Currently, ISPs can slow or block certain types of content, such as file transfers which use peer-to-peer software. According to the Heritage Foundation, “such (peer-to-peer) networks are used by about 5 percent of Internet users, but consume as much as 70 percent of broadband capacity.” Since bandwidth is a finite resource, overuse of bandwidth can slow or cripple Internet access for the rest of the ISPs customers.

ISPs like Comcast and AT&T spend billions of dollars building network infrastructure. “Net Neutrality” advocates are essentially arguing that anybody should be able to use as much of that infrastructure’s capacity as they want to without any additional cost for being a “bandwidth pig.” The ISPs want to be able to charge more to firms which are using more of their infrastructure. And why shouldn’t they be able to?

Once-capitalistic firms like Google, Amazon, and eBay which are increasing their offerings of high-bandwidth product, like movies and music, are trying to use government to keep them from paying their fair toll on the Internet.

There are only two likely outcomes from FCC regulations designed to allow so-called “Neutrality”: First, broadband prices will rise. (A Financial Times report last year said “Broadband prices could rise by up to one-third if regulators in Europe insist on strict “net neutrality” rules…” And second, as happened with other major industrial regulation of the past century, the rules will stifle competition and harm consumers.

The AP article also notes that “the proposals would uphold a pledge Barack Obama made during the presidential campaign.” Anyone want to guess where most of Google’s campaign contributions went? One FCC commissioner argues that “Net Neutrality” is the camel’s nose under the tent regarding government regulation of Internet content and may be intertwined with an attempted reimposition of the Fairness Doctrine. Perhaps it should be no surprise that two such Orwellian-named policies would be supported by the same people.