Tim Wu on Libertarian Reasons to Support Net Neutrality
April 22nd, 2006 by MattTim Wu sent this email in response to libertarian concerns on this issue.
I believe that thinking libertarians fear two types of centralized power: that exercised by government, and that exercised by government-supported monopolistic incumbents, like AT&T.
The Network Neutrality debate is really a debate about what are, in effect, crown corporations, AT&T and Verizon, whose plans would distort private competition among internet service providers. Companies like AT&T are infrastructure providers, almost like the roads — and their plans are very much simple tollbooths placed on a utility necessary for the operation of the private market. That’s why I think even libertarians have reason to resist the incursions of a company like AT&T on the internet and its design.
April 22nd, 2006 at 4:30 pm
How exactly is AT&T a monopoly or government-supported? That’s quite a premise, with no factual basis.
There was a time — prior to the mid 80’s — when that was true. We should legislate for the future, not the past. Long-haul telecoms is quite comptetitive now and that comptetition is increasing.
I consider myself a libertarian, and I am also a web developer. AT&T (and Verizon and Comcast and Cox and Qwest…) are corporations, not “crown” corporations, whatever that might be. They are not part of the government. Let them experiment and compete.
The argument above is that they should be treated as common-carrier utilities. How happy are you with the state of utilities in this country? Please don’t wish that on the Internet.
April 22nd, 2006 at 5:21 pm
Well, AT&T of course is not a national monopoly. But they are certainly a near monopoly in the regions in which they provide local exchange service. FCC data from 2004 showed that CLEC’s controlled 18% of switched access lines. This means the regional ILEC (like AT&T) controlled the remaining 82%. But CLEC’s mainly operate business lines, so the percent of residential lines controlled by AT&T is likely much higher. Furthermore, AT&T — once itself the LARGEST CLEC in the country — has merged with ILEC SBC. So in markets where AT&T is the LEC, they probably control well over 90% of the lines.
Now, yes, this means that there is some competition. But the CLEC’s that remain largely operate in urban areas. In rural areas, AT&T is likely the COLR, and the only wireline provider to many homes. Net Neutrality rules would not bring broadband back under Title II control, but would mean that all content, regardless of ownership, could be reached by any user. So to use the utility analogy, PG&E would has no say in what type of toaster I use, and AT&T should have no influence over what websites I download from.
And yes, there may be legitimate criticism of some utility providers, but that doesn’t mean we should allow the Internet to be turned into another version of cable TV.
April 22nd, 2006 at 6:00 pm
Thanks bukowski, informative stuff. But are we only considering copper wires here? It sounds like the near-monopoly arguments are limited to only one means of entry into the home, and the oldest one at that. There is also coax (cable), rapidly expanding fiber and hopefully Wimax. Plus the 3G mobile offerings.
More to the point, I don’t think the neutrality argument is about the economics of ‘net access in low-density areas. I see those conflated a lot. I don’t think neutrality is about the last mile at all. It is more about whether a network providers can prioritize bits over the long-haul. I think they should be free to experiment, and the consumer will make the call.
Neutrality may be a de facto outcome, as it has been to date, but I would rather the consumer decide. The consumer may decide that the Google video or Skype packets having priority is a desirable experience. Let them try it both ways.
This is a pretty good summary of the state of market share. The best chart is the one at bottom — if we view the market as “communications”, instead of dividing it into phone/data/video, you’ll see that no one even has a 10% share.
April 22nd, 2006 at 8:58 pm
Well, sure, let’s move beyond the copper-twisted pair, and into any and all forms of delivering bits to the home. The latest FCC form 477 data shows that cable and DSL control nearly 99% of the residential broadband market, and again, each of these providers is a near monopoly in their respective medium. That means broadband delivery is a duopoly.
Now this is why net neutrality is important. If both of the providers act to block or degrade content, there is no option for the consumer. Sure, there may be some WISP’s out there that interconnect directly with the backbone, but the concentration of ownership in that sector is also growing.
If it makes sense for some bits to be prioritized because of QoS, then OK, but all VoIP bits should be given the same treatment.
If history is any indication, we shouldn’t cross our fingers and hope for innovation on the part of the incumbents. AT&T tried to kill packet-switching in 1964. All of the killer-apps that ride on IP were created by end-users, primarily because of the end-to-end neutral nature of the network.
Furthermore, these large network owners didn’t just create their network in a competative enviroment. The PSTN arose from monopoly protection, and most MSO’s grew out of exclusive monopoly franchise agreements. For them to be able to dictate content in the name of innovation, after decades of protected monopoly status, well that’s just not right.
And that is a nice page of graphs from TNS. However, the chart you refer to encompasses cellular, PCS, cable, and wireline. Again, while the cellular/PCS market remains competative, they aren’t providing broadband to any signifcant segment of the market (and they’re also owned by the other LEC’s on the list). The cable MSO’s and LEC’s on that chart are all regional monopolies.
If there’s hope for convergence to render all telecom regulation moot one day, then we need to ensure that the driving communications technology — the Internet — remains open. Furthermore, in order for the Internet’s promise as a broadcasting platform for amateur content providers to survive, we need net neutrality.
April 23rd, 2006 at 3:02 am
One can turn any subdivision into a competitive marketplace by simply extending the demarc point to an aggregation closet. There’s enough money at stake when you have 20, 50, or 100 homes for people to lay wires to compete with the ILEC. The libertarian solution would be to work with builders to create standards to create mini Central Offices in each subdivision and just eliminate the problem of the last mile. You own your own ‘local loop’ wires and contract with your neighbors to get service from whoever offers the best deal.
April 23rd, 2006 at 3:21 pm
The key theme of Libertarian thought is, well, just what the name says. Liberty. Freedom and the accompanying responsibility.
The reason why Libertarians distrust government (in terms of philosophy) is because governments have tended to restrict the freedom of citizens whenever it can be gotten away with. The flimsiest excuse can lead to drastic restrictions on individuals.
But the danger inplicit in today’s giant corporations is two-fold. First, they increasingly have the ability to control the actions of individuals… often through economic pressures, although legal pressures are being used more frequently (overly-broad patents and frivolous lawsuits for intimidation purposes, for example). The second is that, although our government is in theory established and maintained for the common good, a corporation from the start is concerned with the greatest profit. As greater power can often turn to greater profit, corporate boards seek power of all kinds — lobbying for indirect political power, wielding economic clout to increase local market share, and so forth. The first is a reason to crack down on shady government-commercial contacts, and the second is a reason for anti-trust laws.
This is why corporations are as big a threat to liberty as the government. Use the government to keep the corporations in check, and use the constitution and the people to keep the government in check.
April 25th, 2006 at 9:52 pm
Use the government to keep the corporations in check, and use the constitution and the people to keep the government in check.
We tried that, it doesn’t work. A better solution is to let the corporations fight it out and have the consumer dollar keep them in check.
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