Freedom v. Market Mythology

Here's a question that answers itself:

...what is it about individual freedom that "conservatives" like the Spectator and Armey don't like?

To be fair, the debate is larger than the Spectator and Armey. Most congressional Republicans oppose the idea of giving consumers freedom on the Internet. They take shelter in their anti-government, anti-regulation rhetoric, preferring to allow Internet freedom to apply to the corporations which own the networks connecting the Internet to consumers, rather than to consumers themselves. There could, of course, be a larger discussion about the meaning of "conservative" and Republican, and whether the two are synonymous.

(To be fairer still, it's not only Republicans. Many a Democrat also speaks out against Internet freedom. They don't have the fig-leaf of misbegotten ideology to hide behind, as they largely back worthwhile government action in many other areas. They are simply servants of corporate and/or union interests. The question applies equally: What about freedom don't they like?)

— Why The 'Right' Gets Net Neutrality Wrong, Art Brodsky, HuffingtonPost, Posted May 5, 2008 | 10:21 AM (EST)

The clue is "servants of corporate ... interests". (Unions occasionally get into this act; corporations much more frequently.) And it's not simple greed for corporate lobbyist money or kickbacks or the revolving door: many politicians and people really believe the "free market" will solve all problems. That's the origin of the doctrine of "market failure" that has pervaded all U.S. federal departments and agencies. Nevermind that when it's a major airline or automobile manufacturer or, even worse, a financial institution such as Citibank, these same people support all sorts of governmental market manipulations and bailouts. We're talking mythology here, kind of like the "rational actor" myth of economics.

Brodsky digs into the misconceptions behind this myth:

[Peter] Suderman's analysis: "In fact, not only were all of these companies [eBay and Google] born in an era with no mandated net neutrality, it's utterly unclear that a lack of neutrality would've impeded them in any way whatsoever."

That is not how it happened. This is how it happened:

Government Helped Create The Internet

Let us review the history. Even setting aside the very basic fact that the underlying technology for the Internet was created under a government program, and was set free for commercial purposes by Congress, it's still hard to get away from the reality that the Internet as we know it was started, and flourished, in a regulated environment. While the content that went online, through bulletin boards, America Online, CompuServe, Prodigy and the rest, wasn't regulated, the telecommunications carriers to a large extent were.

Before the advent of the cable modem, the telephone companies that carried the online traffic not only were under tight rate-of-return regulation, but they were also subject to the sections of the Communications Act barring unreasonable discrimination (Sec. 202). They also had to sell their services wholesale. Amazingly, with all of that regulation, the first iteration of the online world grew, with thousands of local Internet Service Providers able to afford access to the network so they could offer their services to the public.

The new and fancy equipment came because the Federal Communications Commission (FCC) in 1968 broke through the tariff of then Bell System and allowed outside, customer-owned devices to be connected to the network. That decision brought competition in long distance as well as setting the stage for the fax, modem and other gadgets.

He's referring to the 1968 Carterfone decision. Brodsky points out that eBay and Google were founded before the FCC under Chairman Michael Powell and even more under Kevin Martin reclassified most Internet access as "information service" and revoked its common carriage status; see Barbara Cherry's work on this subject.

Here's the crux of the matter:

The argument against Net Neutrality really goes off-track when it gets into the nature of private property, the state of competition, and the effect of regulation. That's more than one track to be thrown off of, so it's quite the disaster scene. We may need CSI: Telecom to sort it all out.

You can't even have private property without government enforcement of land rights, and you can't even have business as we know it without government enforcement of contracts. As for competition, duopoly ISPs such as AT&T, Verizon, Comcast, Time Warner, and Cox sometimes mistake the networks they are running as "their networks". If there were real competition in that arena, any vendor foolish enough to treat a network with millions of customers as if it were an internal corporate intranet would lose customers so fast it would change its tune.

Brodsky details how AT&T is raking in the dough even though it is supposeed to be abiding by net neutrality provisions of the FCC agreement for it to merge with Bellsouth. But the bottom line is this:

Net Neutrality is neither pervasive nor burdensome. It allows for innovation and investment. It allows for telephone companies to sell different levels of service to different customers. Parents can still protect their children. What it doesn't allow is discrimination. That's why Michele Combs from the Christian Coalition supports an open Internet, and she is brave and correct to do so in the face of uninformed criticism of her fellow "conservatives."

-jsq