How Free-Market Internet Will Protect the Little Guy

An earlier post gave a rights-based reason to oppose “Net Neutrality”:

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.

Not everyone is persuaded by rights-based reasoning. Dan H., for example, discussing the post on Facebook, frets that property rights and free exchange for Internet service providers would be disastrous:

As someone who is trying to use the Internet to spread my work and gain an audience, ending net neutrality would be one of the worst things that could ever happen to my plan for the future. Giving priority to those sites that have deeper wallets will kill the freedom and innovation found on the Internet.

Dan is mistaken. Freedom for service providers to offer different speeds and services at different prices is not only right in principle, it will also foster innovation, expand service, and drive prices down as competitors strive to satisfy customer wants, guided by free-market prices and the prospect of profit. Joshua Steimle characterizes the process nicely in “Am I the Only Techie Against Net Neutrality?” (HT Aeon Skoble) Here are three relevant slices:

If the telecoms are forced to compete in a truly free market, Comcast and Time Warner won’t exist 10 years from now. They’ll be replaced by options that give us better service at a lower price. Some of these new options may depend on being able to take advantage of the very freedom to charge more for certain types of Internet traffic that Net Neutrality seeks to eliminate. If we want to break up the large telecoms through increased competition we need to eliminate regulations that act as barriers to entry in the space, rather than create more of them.

… Internet bandwidth is, at least currently, a finite resource and has to be allocated somehow. We can let politicians decide, or we can let you and me decide by leaving it up to the free market. If we choose politicians, we will see the Internet become another mismanaged public monopoly, subject to political whims and increased scrutiny from our friends at the NSA. If we leave it up to the free market we will, in time, receive more of what we want at a lower price. It may not be a perfect process, but it will be better than the alternative.

… The worse services provided by the large telecoms are, the more incentive there will be for entrepreneurs to create new technologies. Five years from now a new satellite technology may emerge that makes fiber obsolete, and we’ll all be getting wireless terabit downloads from space directly to our smartphones, anywhere in the world, for $5/month. Unrealistic? Just think what someone would have said in 1994 if you had tried to explain to them everything you can do today on an iPhone, and at what price.

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