As you may know, the DC Circuit Court of Appeals on Sept. 9 will hear Verizon's case challenging the FCC's net neutrality mandates. CEI's Wayne Crews has been tearing that apart in a series of blog posts, "Before Net Neutrality Eats the World," criticizing the alleged justifications for net neutrality (like "market failure") and suggesting alternative plans (such as "agency neutrality").
Before Net Neutrality Eats the World
by Wayne Crews
On September 9, 2013, the United States Court of Appeals for the D.C. Circuit will hear oral arguments in Verizon’s challenge of the Federal Communications Commission’s (FCC) December 2010 Order on “Preserving the Free and Open Internet.” (That day, you’ll be able to stream a TechFreedom/International Center for Law & Economics luncheon panel discussing the proceedings.)
The arguments mark the critical culmination of a longstanding effort by FCC to expand power over speech and infrastructure in America in violation not merely of the Constitution and the rule of law (as plaintiffs and allies certainly allege; my organization took part in an amici curiae brief), but of common sense, economic efficiency, and consumer welfare.
The Order, the prior 2009 Notice of Proposed Rulemaking (see CEI filing to FCC) and the even earlier Notice of Inquiry on Broadband Industry Practices (see CEI filing) asserts national government authority over the Internet’s future with respect to broadband access and pricing.
Unelected FCC commissioners contemplate this action without authority from Congress, and even with such authority, it should have and would have been challenged.
Net neutrality contends that the government should oversee the Internet rather than the private productive sector. It contends that Washington should decree that Internet service providers treat online traffic the same, in “non-discriminatory” fashion as to be decreed by regulators rather than defer to consumer demand, market and technological realities, and competitive pressures. Those competitive pressures already greatly militate against unreasonable blockage of traffic flow and easy access to content.
No credible case exists for universal neutrality rules in contrast to a potential rifle shot to deal with legacy (clearly diminishing) market power owing to past exclusive franchises and other legacy government-created monopoly power. And even here, unfavorable press generally does the trick. I don’t think antitrust is the solution as some do, but the industry does not require sweeping regulation because somebody might misbehave.
> View more - Before Net Neutrality Eats the World, Part 1: Net Neutrality vs. Infrastructure Wealth
Instead of compulsory net neutrality, let’s mandate agency neutrality. The FCC should turn a deaf ear to politically driven business and pressure-group demands for special treatment for any sector of the communications industry.
To the FCC, corporate giants are a problem. Ironically, consumer welfare would benefit from more corporate giants and a bit less of an agency leviathan more powerful than them all put together.
Before Net Neutrality Eats the World (Part 4): FCC Order Creates Political Vulnerability for All Market Participants
Neutrality holds that broadband service providers are not entitled to set the terms on their privately owned network property. For them, First Amendment and Fifth Amendment rights shall not apply. If that holds, major content firms increasingly will find they are not entitled to their business approaches either.
Since it is a consciously anti-competitive framework, net neutrality is “not neutrality.” In that light we can see that Federal Communications Commission’s (FCC) net neutrality campaign rests upon numerous misperceptions and outright untruths about competitive markets and capitalism.
Market failure cannot be a problem in telecommunications and the Internet, since communications has been a comprehensively regulated industry almost since the outset. If anything, political Failure is the matter at hand.
Freezing today’s Internet into a regulated public utility via net neutrality’s FCC-serving price and entry regulation will slow investment and innovation — meaning fewer new companies, networking deals, products and technologies. Net neutrality turns the entire industry “dumb” — not just the pipes — ultimately hurting content companies too.