The Misplaced Endorsement of Net Neutrality by Google and Verizon

[RussK]

I just got a Facebook account. Continuing to figure out the 'notes' feature by posting this, and thought I'd share here as well.

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Recently, there has been a lot of buzz about net neutrality, the idea that the internet must be protected and remain 'open' and free from discriminatory service filtering. The supposed threat posed by a 'non neutral' internet has been deemed severe enough for the FCC and its regulatory authority to get involved. In fact, the FCC has been in 'off and on' meetings with service providers for some time now, with their latest bout of meetings having been declared "dead." It is interesting then that both Google and Verizon, who preside over some of the largest internet service offerings in the world, and, therefore, have the most to lose from net neutrality regulation—being told how they must offer and manage their services—are willing to enter into a joint policy agreement on the issue. Unfortunately, while both Google and Verizon may get some short term gain by leading the way toward net neutrality regulation, any such benefit will come at a price: the further erosion of property rights, which have been essential to the growth of the internet services, which both companies are dependent on.

First off, however, for those interested or in need of a primer on the concept of net neutrality, as well as an excellent analysis of what effect it will have, I recommend the article, "Net Neutrality: Toward a Stupid Internet," by Raymond C. Niles, published in the Objective Standard in late 2008. When I first read the article, it was the first time that I had even heard of the topic, yet it remains the best and most informed piece on the subject that I have come across. I have heard a few pundits, especially on television, bring up the topic once or twice; however, every time, they had an extremely limited knowledge of it and usually only spoke about political activism aspects that could be affected by net neutrality. On the other hand, Niles breaks the issue down to fundamentals by explaining what the internet is and how it was created, what net neutrality is and how it will work in practice, and why "America morally must recognize the rights of Internet service providers to manage their property as they see fit."

Of course, the decision by Google and Verizon to enter into a joint agreement, helping to bring about net neutrality, is not motivated by their desire to see their companies harmed. More than likely, it's an attempt to be the leaders in adopting net neutrality regulation, so as to help create the regulations itself, thereby reducing the harm it will cause. In a mixed economy, especially one with a fascist bent, like ours—private ownership of companies operating under the authority and demands of the government—such action is common place. For example, many of the largest companies in the health care industry, including private insurance companies, approve of increased government intervention, so long as they get a good, seemingly permanent share of the market (reference Great Britain's healthcare system, operated by private insurance companies). This, however, is short termed thinking with long term consequences that continue to destroy private enterprise.

Just as is the case with insurance companies in Great Britain, who continue having to capitulate to government orders after having 'gotten in bed with the government,' so too does Google and Verizon risk being in the same boat in the not too distant future. While both companies, as well as other large providers, might be able to etch out some beneficial arrangement—and others are left to wither and die—with the government, the precedent that they will set will be their downfall. By voluntarily agreeing to support net neutrality and endorsing FCC regulations, both companies have implicitly rejected their rights to operate their own property in the manner that they decide is best. Once they have decided that such regulation is necessary and proper, they have agreed to submit their rightful authority to the government, and the government isn't going to repay the favor. Instead, the government is likely to use its new authority to force more regulation down the throats of Google and Verizon—really, the whole industry will be affected at the end of the day—who agreed to subjugate their rights to begin with.

What then should Google and Verizon do in this case? Instead of endorsing regulations that subjugate the rights of service providers to operate their own networks, they should actively engage in promoting their property rights. If they continue to give the "sanction of the victim," not only do they risk losing their autonomy for decision making, which would harm the longevity of any corporation, but the harm to the tech sector could be irreparable.

[rebelconservative]

For example, many of the largest companies in the health care industry, including private insurance companies, approve of increased government intervention, so long as they get a good, seemingly permanent share of the market (reference Great Britain's healthcare system, operated by private insurance companies). This, however, is short termed thinking with long term consequences that continue to destroy private enterprise.

Just as is the case with insurance companies in Great Britain, who continue having to capitulate to government orders after having 'gotten in bed with the government,' so too does Google and Verizon risk being in the same boat in the not too distant future.

You are correct that Google and Verizon are collaborating with the state in this matter to protect their own businesses and should not be sanctioning this (though the state is to blame for putting them in that position). However, the example you use is incorrect, the British healthcare system (NHS) is funded through direct taxation of income and provided entirely by the state bureaucracy (I think it is what you call 'single-payer' in the US), there are no private insurance companies working within the British national healthcare system (though some exist outside of it, e.g. BUPA, AXA PPP Healthcare). I think that France has something similar to the system you are talking about.

[RussK]

You are correct that Google and Verizon are collaborating with the state in this matter to protect their own businesses and should not be sanctioning this (though the state is to blame for putting them in that position). However, the example you use is incorrect, the British healthcare system (NHS) is funded through direct taxation of income and provided entirely by the state bureaucracy (I think it is what you call 'single-payer' in the US), there are no private insurance companies working within the British national healthcare system (though some exist outside of it, e.g. BUPA, AXA PPP Healthcare). I think that France has something similar to the system you are talking about.

Thanks for the tip. I'll have to do further research into it.

[RussK]

I think that France has something similar to the system you are talking about.

Yep, right on the money. Thanks for the heads up. It's easy to get confused by the world of European health care.

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1447687/

[avgleandt]

I was wondering why google would want promote such policies. My friend who is more knowledgable in computers explained. 90% of bandwith is used by 5% of people who download stuff on peer to peer networks. Its immpossible for a server to be able to indentify who is using regular internet and who is using peer to peer. Peer to peer activity can swallow up a lot of bandwith and leave regular internet users with slower internet. Comcast created somekind of new mini servers that can somehow differentiate between peer to peer and regular users. They use these servers to protect some bandwith for regular internet users. This leaves peer to peer speeds almost untouched, and speeds up regular users internet to high speeds.

Verizon has its own internet providing network, and Google owns large part of an ISP(internet service provider)called clear. Both don't have access to these new mini servers, I think because of a patent. So they will have a hard time competing with comcast, because their servers that cannot tell the difference between peer to peer and regular will not be able to offer the same high speeds to regular users as comcast. So they want to use the power of the government to level the playing field for them. They want to make the new mini servers ability to tell the difference between peer to peer and regular illegal.

Edited August 18, 2010 by avgleandt