Cartelizing The Internet


The regulators have declared net neutrality to be “a triumph of ‘free expression and democratic principles.’” This is a contradiction in terms. A “tiny group of unaccountable bureaucrats operating with the support of the executive lame duck” and in cahoots with a cartelized industry: This is despotic, not democratic.

Jeff Tuckers unpacks the dynamics of net neutrality and regulation, in general, as one whereby “… an elite group of insiders manipulat[ates] the regulations for their own benefits, a left-wing intelligentsia … is naive enough to believe platitudes about fairness, and a right wing … is mostly ignorant and for sale to the highest bidder.”

… Here’s what’s really going on. The incumbent rulers of the world’s most exciting technology have decided to lock down the prevailing market conditions to protect themselves against rising upstarts in a fast-changing market. To impose a new rule against throttling content or using the market price system to allocate bandwidth resources protects against innovations that would disrupt the status quo.

What’s being sold as economic fairness and a wonderful favor to consumers is actually a sop to industrial giants who are seeking untrammeled access to your wallet and an end to competitive threats to market power. One person I know compared the move to the creation of the Federal Reserve itself: the creation of an industrial cartel in the name of improving the macroeconomic environment. That’s a good comparison.

Let’s back up and grasp the position of the large content providers. Here we see the obvious special interests at work. Netflix, Amazon, and the rest don’t want ISPs to charge either them or their consumers for their high-bandwidth content. They would rather the ISPs themselves absorb the higher costs of such provision. It’s very clear how getting the government to make price discrimination illegal is in their interest. It means no threats to their business model.

By analogy, let’s imagine that …