Net Neutrality: Who Wins?

Under the Trump regime, there’s a move afoot to end Net Neutrality, something the Obama administration championed. Everything supported by Obama seems to be subject to reversal in the current political climate. Net Neutrality should not be one of them.

The concept underlying net neutrality is an easy one to understand: Internet service providers should not be able to slow down whatever parts of the internet they choose to. Every data stream should have equal access from server to client.

There are obvious ways that an internet without net neutrality can be skewed to benefit the service provider while the customer suffers. Some theoretical examples:

  • Comcast and NBC are now one corporation. What if Comcast slowed down video traffic from all non-NBC sources?
  • What if Google Fibre slowed down traffic from all non-Google services or charged a premium to provide other companies with the full bandwidth traffic Google content would automatically have.
  • What if Verizon Wireless blocks all AT&T services and AT&T Internet blocked all Verizon sites?

Without net neutrality, there is no way to guarantee it won’t happen and no law in place to give end users the right to sue over such practices.

Monopolies Must Be Regulated

Monopolies are not always bad, but that potential always exists. Virtual monopolies, such as Microsoft, can abuse their domination of a market. When the AT&T had an almost complete monopoly of the US phone network, it was able to charge a lot more for services and for a time was able to block other carriers from using its landlines. Standard Oil was once so dominant that it could crush any competitor in any market with a local or regional price war on gasoline.

In most market, utilities are highly regulated, and if they want to raise their rates, they need to have a commission study and approve the change. That keeps the electric company and gas company from gouging users with electrical devices and natural gas service.

In most US markets, only one provider is authorized to run cable to residential customers, making it more difficult and expensive for competitors to provide alternative services. Verizon FIOS and Google Fibre, two of today’s faster wire-based internet services, are only available in limited markets. Locally I have AT&T internet service, formerly known as U-verse. It’s a lot slower than Comcast cable internet, but after too many years with connection problems, I had to leave Comcast behind years ago.

Wireless is proving to be a competitor in some areas. Sprint and some other services offer WiMAX, and 4G LTE is another way to move data without miles and miles of cable.

Still, by and large users choose the cable route, because they are already receiving television service through the cable provider. No matter how many speed- and cost-competitive alternatives there are, most people will go with the company they are already working with.

The Free Market Religion

Here in the United States, capitalism is our creed and free markets are treated with almost religious reference, especially in Republican circles. Capitalism is good, but free markets are not always fair markets. With an infrastructure already in place, cable providers have an unfair advantage against other internet services. If they wanted to, they could do like Standard Oil and undercut competitors in one market after another.

Americans are an odd lot, scared to death of “socialized” medicine but unwilling to give up their Social Security. We love a market with lots of alternatives, such as the insurance industry, and believe that the free market will result in the greatest good for the greatest numbers. We conveniently ignore that in all the other G20 nations, total health care expenditures – whether under a single-payer plan or some alternative – are half as much as in the US, and to top it off, the service is about twice as good.

But the free market religion blinds people to realities like that, and the cost of providing medical coverage puts the US at a competitive disadvantage against the rest of the world. To “make America great again” we should be going way beyond market-based Obamacare and whatever the Trump Republicans have cobbled together, making the US competitive with nations that provide medical coverage to everyone.

Instead we have big pharma, big hospital networks, big insurance companies, big malpractice settlements, big bills for medical training, and big bills from doctors and specialists giving us the most expensive health care in the world. It might be worth it for the best health care in the world, but our falls far behind.

The Case Against Net Neutrality

The argument goes that if you have an internet service provider, such as the cable company, providing uneven service to its customers, those customers have other options. If you don’t like the way Comcast does things, get Google Fibre, FIOS, WiMAX, or DSL. You make your choice and you pay your monthly bill.

Problem is, it’s hard to compare services. Cable is much faster than DSL, but fibre is much faster and much more expensive. Wireless fall between the extremes. You have to compare different speed options and data bundles that never seem to provide matching levels of service between carriers.

Imagine removing net neutrality from the picture. Will your new carrier provide full speed for the services you use, or will the scale them back?

Why We’re For Net Neutrality

You have two choices: Let carriers decide which services they want to scale back – or charge users a premium for full-speed service one those services. Or require carriers to provide fair and equal throughput for all services.

The wild west free market approach does not serve the public interest (known as general welfare in the Preamble to the US Constitution), and those who think it does are padding their wallets. The general welfare could be served by allowing all service providers to use the wires provided by the cable company, which usually has a monopoly on their use, just as AT&T was required to allow other phone carriers to use its landlines.

The best option seems to be to allow carriers to choose their own technology – landline, cable, wireless, fibre – and offer whatever service packages they think will make them competitive. All of this in conjunction with antitrust laws and net neutrality gives us a range of market choices makes it that much easier to choose an internet service provider, knowing that they won’t be slowing down Netflix or Google or Amazon or any other service.

Despite Trump’s almost religious devotion to open markets, ending net neutrality will disrupt the market and not serve the general welfare. And that’s why we support retaining net neutrality laws.

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