March 29th, 2015
This is a letter to the editor in response to “How to Break the Internet” in the May 2015 issue of Reason magazine.
There are many legitimate criticisms that may be made of the FCC’s approach to net neutrality. Unfortunately, Geoff Manne and R. Ben Sperry do a poor job of making any of them in their May article.
While I agree that Title II regulation is the wrong approach, net neutrality is an attempt to solve a real problem that requires solution.
What Manne and Sperry miss are two points that have gradually become clear to those of us who have worked on these technologies over the last 30 years:
1 – Internet bandwidth is not, in practical terms, a scarce resource. In theory of course it is scarce, just as the amount of air we can breathe is limited by what Earth’s atmosphere holds. But in practical terms, we are not going to run out.
This took a long, long time for technologists to understand – a huge amount of network engineering development and standardization has focused on bandwidth prioritization and allocation mechanisms.
Almost none of which are used in practice. Because it turns out that it is almost always cheaper to simply add more network capacity (“overprovision”), than it is to implement mechanisms to allocate bandwidth as a “scarce resource”.
2 – Contra Manne and Sperry, at least in the US, Internet service provision is not a competitive industry, but a quasi-monopolistic one. This (as Reason should know) is mainly due to regulations at the state and local level. Having 2 or 3 regulated firms offering service in a given area is not the same as free entry into a market.
If truly free competition in the ISP business were allowed, there would be no need for “net neutrality”; competitive forces would solve the problem.
But we don’t have that. I’d much rather see Federal legislation that truly deregulates the ISP business (taking monopoly power away from states and localities). Until that happens, ISPs really do have quasi-monopolistic power.
ISP attempts to tax content providers based on “scarce resource” arguments are spurious excuses for a money and power grab that is in fact simply rent seeking.
As long as that situation is allowed to persist, we do need some limits on how ISPs may abuse that power.