Net Banality

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1934 was
a bad year for the constitution. 69 years to the day
after Galveston Texas learned the Civil War had ended and that southern
slaves were now free, Congress passed the Federal Communications
Act, creating the FCC. Seven days later Congress passed the National
Firearms Act. The Communications Act expanded the influence of what
was once the Federal Radio Commission to include television. The
act has been amended over the years to include wired communication
of all types. Ever since it became obvious that the Internet was
going to be an important means of transferring wealth and information,
the FCC has turned a jealous eye to it. The hyperventilating Congress
has been more than willing to hand over power to the FCC
when it is allowed. We had the “Internet Decency Act,” thankfully
struck down for the most part by a temporarily sane Supreme Court,
taxing attempts and now the latest is so-called Net Neutrality.

The term Net
Neutrality
(NN) is not even satisfactorily defined but has certainly
attracted a large group of followers. NN proponents are quite certain
that at any moment AT&T, Southwestern Bell, AOL, and any number
of ISPs and bandwidth providers, are going to suddenly start preventing
their customers from visiting sites or accessing services. Why they
would want to do such things is explained with hand-wavy responses
and hyperbole. Attempting to get a net neutrality proponent to give
a concise definition or rational argument to support the fear-mongering
is like pulling teeth with a set of rusty pliers. One of the most
vocal proponents of NN is Columbia law professor Tim Wu (occasionally
given credit for coining the term). Tim really wants us to care
about Net Neutrality. In Why
You Should Care About Network Neutrality (The future of the Internet
depends on it!)
he pants:

“In trying
to figure out who’s right, let’s forget about the Internet and
look at KFC. The fast-food chain discriminates. It has an exclusive
deal with Pepsi, and that seems fine to pretty much everyone.
Now, let’s think about the nation’s highways. How would you feel
if I-95 announced an exclusive deal with General Motors to provide
a special “rush-hour” lane for GM cars only? That seems intuitively
wrong. But what, if anything, is the difference between KFC and
I-95? And which is a better model for the Internet?

We’re all supposed
to care so much about “Net Neutrality” that we throw logic and common
sense out the window. Wu wants us to that KFC,
a private entity with the right to engage in private contracts and
competitive agreements, is the same as a government transportation
agency engaging in fascist policy – the subsidization of an
automobile manufacturer. He also wants us to believe that a competitive
agreement between two companies is “discrimination.” If you are
a consumer and want Coca
Cola
, but KFC only serves Pepsi,
you have a choice. In Wu’s highway example, the traveler has no
choice. He is the victim of a government-imposed monopoly (a redundancy
– monopolies are not possible in free markets). This is generally
the level of argument you can expect from neutrality proponents.

The overwhelming
historical evidence of ISP behavior in the marketplace would itself
suggest that these fears are unfounded. While it is true that competition
for ad revenue is fiercely contested and many content providers
have tried to make their content "sticky," users still
have a tendency to wander off the reservations. The companies that
have rejected tight controls on their users have thrived and the
companies that have attempted to force users into closed systems
haven’t fared so well. A good example of this is AOL. Their customer
base is largely made up of people who are happy with the way that
AOL’s software tries to keep them “in network,” though AOL before
their merger with Time Warner were losing customers as other alternatives
emerged. AOL’s inclusion of a web browser allowing customers to
surf outside the AOL network was primarily done to prevent their
customer base from fleeing. It was in their best interest to provide
access to other locations. They still have a significant customer
base and they can credit the inclusion of a standard browser for
this.

Internet companies
have responded slowly to customer desires at their own peril. I
remember the day I was hired at Lycos
to help manage their ad delivery network. Lycos’ stock was trading
at $107 dollars and the company was a legitimate threat to Yahoo.
At that time page views were the current measure of success and
Lycos was in the #2 spot with 38,000,000 page views per day. A year
later, in 2000, Lycos’ stock was trading at just over $30 dollars
a share. They didn’t listen to their customers and paid the price.
Their customers found other destinations. After the Terra/Lycos
merger, they have become almost irrelevant. They aren’t even listed
as significant in search engine rankings
compared to their competitors even though they were one of the first
to claim the space. This kind of market fallout isn’t limited to
strictly ISPs. The Internet has totally changed the face of the
tech industry. Where proprietary business models were once very
lucrative for technology companies – systems with networking
protocols and devices locked the customer into a single brand –
you can count on one hand any of the companies which have managed
to survive those practices as the demand for open systems grew.
I still remember the Wang “Soup to Nuts” radio commercials from
1991. Where’s Wang
now?

Net Neutrality
proponents want us to believe that in spite of market forces dictating
that content and destination restrictions are not good for business,
they will one day defy all logic and start engaging in the practice.

But let’s at
least discuss an equivalent to the KFC example provided by Wu. Let’s
say that AOL/Time Warner decides it no longer wants to allow AOL
customers to reach Google and instead drives them to their own in-house
search engine. Why is this bad? Time Warner/AOL owns the equipment
and network they’ve built. Net Neutrality proponents would claim
that the FCC needs to step in to prevent this. What if AOL, who
by the way has to pay for the bandwidth it provides to its customers,
limits movie and file downloads or certain chat clients that they
haven’t written? It’s their company. Their customers are not required
to continue to accept bad service. Customers are still free to switch
providers. Nobody has been harmed.

NN proponents
would like you to believe otherwise but their entire argument is
based on fear. NN is the classic protection racket with the FCC
as “savior.” This idea is barely newer than prostitution. Ironically
Wu projects his own designs on those he is attempting to punish:

But what
must be banned are blocking, gratuitous discrimination, and choosing
favorites. While it’s one way to earn cash, it’s just too close
to the Tony Soprano vision of networking: Use your position
to make threats and extract payments. This is similar to the outlawed,
but still common, “payola” schemes in the radio world. Yes, there’s
money in such schemes, but they aren’t good for the industry or
the country. If allowing network discrimination means being stuck
with AT&T’s long-term vision of the Internet, it won’t be
worth it. [emphasis added]

This would
be amusing if it weren’t for a good number of people taking this
drivel seriously.

There is one
area the NN proponents touch upon which I find compelling. The main
infrastructure which allows the Internet to thrive has been traditionally
controlled by the monopoly phone companies. Landlines and power
infrastructure are good examples where the consumers have not been
given a fair shake. In many areas, there is little choice but to
use a single provider because the rights of way and easements were
long ago co-opted by government and business interests in concert
to create monopoly phone and power companies.

However, rather
than inject yet another bureaucracy to protect us, why not try something
different for a change? Why not try freedom? If the easements were
not controlled by monopolies, entrepreneurs could start delivering
fiber to your neighborhood  (there is quite a bit of “dark
fiber” already available which represents a great deal of potentially
available bandwidth). Any local or federal easement could be auctioned
off to the highest bidder. Wireless companies could gain access
and put up towers. Innovation and creativity may even eliminate
the necessity for unsightly towers, poles and lines to deliver services.
Why not introduce real competition in the areas where currently
none exists and let the market decide? If content-limiting schemes
prove successful, maybe we should, rather than assume that the company
doing this is evil, consider the customers are getting the service
they desire. What if this turns out to be a valuable service which
is then further emulated? It would be far better than the unimaginative
solution being proposed which has the ugly side effect of encroaching
upon our liberties.

July
20, 2007

Rick
Fisk [send him mail] is
a 44-year-old software developer and entrepreneur. He is married,
has 3 children and resides in Austin, TX.

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