All We Need to Know About “Net Neutrality”

In thinking about the controversy over “net neutrality” that President Obama stirred up on Monday, we should keep in mind that private ownership and freedom of exchange are the foundations of a free society. Internet service providers own their fiber optic cables, switches, and so on, the physical infrastructure of the Internet. It’s their property. Their rights to their own should be respected.

They should be free to sell the use of their property to content providers on whatever basis they choose, including charging heavy users such as Netflix and Google a premium to get their customers consistently fast service.

That’s really all needs to be said in this controversy. We don’t need to talk about economic consequences. If we believe in property rights and freedom of exchange, “net neutrality” is a non-starter.

As for the economic consequences, the incentives to innovate, expand service, and reduce prices that always come with wide-open enterprise based on property rights and free exchange will drive ever-wider access to Internet services at ever-lower prices, while letting bureaucrats dictate who may, or must, provide what services at what prices is a sure recipe for stultification.

But we don’t need to consider the economic consequences to know what to do here. In a free and decent society we respect others’ ownership rights and grant them freedom to make exchanges or not as they see fit.

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5 Responses to All We Need to Know About “Net Neutrality”

  1. Sean Lansberry says:

    On most occasions, I while heartedly agree with your posts, today is not one of them.

    The problem, as I experience it, is that in many markets there is no competition amongst ISPs. In Baltimore city, for example, this is due in part to the influence that Comcast has on the legislative and regulatory process; effectively blocking competitors from laying their own fiber optic lines.

    Unfortunately, this leaves Comcast in a position where if they are not regulated under Title II, they would have the ability to effectively terminate my favorite services. Frederic Bastiat warned us of a world in which different groups in society would seize the government and, in turn, use it as a weapon to bludgeon one another. This is the world as we know it. Rather than sell my home and change jobs, in order to have choice in which content I’m allowed to stream, I instead support this violation of a corporations rights. Especially a corporation which has contributed to it’s own misfortune.

    After all, you taught us to follow the money when analysing public policy, and in this case Comcast is at the heart of using political contributions to influence local and regional policy in an effort to suppress competition.

    • Eric says:

      “…letting bureaucrats dictate who may, or must, provide what services at what prices is a sure recipe for stultification.”

      Sean, local government legislation that would deny access to markets for competing ISPs should be repealed on the same grounds. The existing ISP and the local government (or even State/Federal goverment) has no right to block competition as it impacts the property rights of the competing buisness owners.

  2. Wireless mobile companies introduce competitive forces in most locales. I can choose not to subscribe to Comcast’s broadband service or Verizon’s FiOS, and instead opt for a 4G data plan which acts as a substitute.

    The bigger question is whether or not regulation has any place in a market-based economy. I am more inclined to side with the Jean Tirole answer of “it depends in the industry.” There are industries which have significant barriers to entry, which can prevent an entrepreneur from implementing an innovation; however, I am not convinced that internet service providers fall into that category.

  3. Sean, I live in Baltimore city, and I use Verizon, not Comcast. And T-Mobile is pushing me to use their wireless service. A Google search suggests that Dish Network, DirecTV, and a company called Clear all offer Internet service also. Isn’t that meaningful competition? Am I missing something?

  4. […] An earlier post gave a rights-based reason to oppose “Net Neutrality”: […]

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