The Fallacy of Net Neutrality (Encounter Broadsides)

The most tedious and boring of the Encounter Broadsides I have yet read. It gets its point across: the F.C.C.'s plans for "net neutrality" are bunkum. But, done in a thick, unclear style. Some good spots, like looking back at the history of the internet and various ways to access it, but also some unclear tech-speak and bureaucratese that mars readability. Also, I am reading this almost a dozen years too late, since there has been so much water under the "net neutrality" bridge since then. But, a good primer on some of the history and arguments from back in 2011.3.5 out of 5 stars.

The FCC under the Obama adminstration, ever concerned about consumer welfare, decided in 2010 to impose a policy of "net neutrality" on internet providers. The goal was to prevent these "gatekeepers" from leading their clients to sites they preferred and would financially benefit from. The net, regulators argued, should be free and open, not controlled by a few large search engines. Who could complain about that? It was a classic case of government stepping in to protect the interests of consumers against large companies. Except....The whole case for net neutrality, it turned out, was nonsense. The Justice Department warned the FCC that the policy would have the opposite effect of what they intended, and indeed, in implementing the policy, the FCC was not able to find a single peer reviewed paper which supported their position that consumers were harmed by the unregulated internet. But the regulators went right ahead with their plan and immediately received a "complaint" about MetroPCS, the 5th largest provider of cell phone service. Metro it seems was giving their customers unlimited calling and text for $40 a month, and limited access to the internet using older (2G) technology. Customers were choosing the limited access in return for the lower price, but such access did not include streaming video. However, Metro did manage to make Youtube available to its customers. With the help of Google, they used a technology to compress files of Youtube videos for their consumers to watch, and in the process violated "net neutrality" because, after all, they had not made every video from every site on the web available to their customers using their older technology.Hazlett rightly asks, at this point, who was harmed by this? The customers? No, they choose an inexpensive service with scaled down benefits. And MetroPCS, which had less than 10% of the market, and fully ten times fewer consumers than Verizon, was hardly a traditional monopoly, setting prices and forcing consumers to use their services. Indeed, most of their consumers were paying low rates for a reason: they could not afford the high end prices that large companies who met the net neutrality criteria were offering. Even Metro was not benefiting per se. They did not own Youtube, and they received no additional money for offering it to their clients.Hazlett leaves the story there, and goes on in the book to note that markets provide consumer goods that consumers value even in the absence of regulation, especially when it comes to internet access. A case in point is Apple's Iphone, which keeps all of its applications in house as opposed to Android, which does not. There is a market for each, and regulators would be foolish to favor one platform over another. But that is precisely what net neutrality does. Hazlett cautiously suggests that we can hope the NN policy will be defeated in the courts and failing that, it should be repealed by the next administration.But Hazlett misses the bigger issue here. Regulations have historically benefited Big Business to the exclusion of their smaller competitors. Just who really benefits from government imposed net neutrality? It is not, as he demonstrates, consumers. Indeed, as noted earlier, the FCC could not find any evidence of consumer harm to begin with, other than their hypothetical fears. But Verizon certainly benefits from attempts to regulate MetroPCS. Protecting large firms from lower prices does not benefit consumers, but it does benefit large businesses. And this is the actual effect of most regulations from this administration. Banking reform, in the form of the Dodd-Frank bill has in fact led to the closing of small banks, hurt small businesses that borrow from such institutions, and benefited Bank of America, Chase, and other large financial giants. It is past time that we recognize the simple facts: rhetoric aside, when regulators press to reform an industry, they do so to benefit large businesses to the detriment of consumers and small businesses. It is past time for those who claim to defend the "99%" to recognize that they are supporting a party who in turn protects those they rail against.

Understand when you purchase this that it is very short. It's more the length of a long article than a book. Even though it's around 60 pages, that is misleading because it is a small size and the font is very large. I did not expect it to be so short when I got it, but the content was good enough that I didn't mind.This isn't an in-depth examination of every aspect of the net neutrality issue, but it is a very effective argument against the common arguments you see today, and why the real threat to net neutrality is not ISPs, who have no history of actual discrimination, but the government, whose definition of "discrimination" expands to encompass so much that it ends up stifling competition. A memorable example of this was a small cellular company that featured a cheaper, 2G version of its service that they enhanced with special coding that allowed users to view unlimited YouTube videos. This was a bonus that they managed to accomplish through a partnership with Google, and most 2G networks struggle to load any videos. But "net neutrality" proponents said that this was "discrimination" against other streaming services like Netflix or Hulu. These are the kind of people who would decide the rules under future government legislation.Very well-written book that sadly doesn't cover too much, but it does give some very good arguments over what it does cover.

This book is important.Maybe for some people, just the idea that Al Gore is *FOR* Net Neutrality is enough to convince them it's a bad idea.But Net Neutrality *IS* a bad idea (apart from the repulsive personalities of its proponents), and this broadside explains why.For now, NN is dead. However, since crony socialism loves to tip the markets in favor of political donors and large, entrenched corporations (employers!), I would expect NN to rear its ugly head again.Read up and be prepared.

A must-read for students if the administrative state and Economics. Hazlitt lays out his thesis and supporting information in an easy-to-understand Prize. Not just for geeks, for the lay reader as well as the practitioner.

I wanted more information. I guess I will have to invest in his book.I was hopeful.

Read things you will never see elsewhere. Love the point of view.

O.K. but rather shallow.