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Anders   

Interesting article.

I read it, but I'm not clear on what kind of effect this would have on Canadian or other international Internet users? Would it have any? It would bother me if officials elected in a country I have no control over were able to make changes that would affect the way I access my media.

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Tyler   

In Policy Shift, F.C.C. Will Allow a Web Fast Lane

 

 

The principle that all Internet content should be treated equally as it flows through cables and pipes to consumers looks all but dead.

 

Companies like Disney, Google or Netflix will be allowed to pay Internet service providers like Comcast and Verizon for special, faster lanes to send video and other content to their customers under new rules to be proposed by the Federal Communications Commission, the agency said on Wednesday.

 

The proposed rules are a turnaround for the agency on what is known as net neutrality — the idea that Internet users should have equal ability to see any legal content they choose, and that no providers of legal content should be discriminated against in providing their offerings to consumers.

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Anders   

Worth watching for a better understanding of the principles at stake here. Great for explaining the concept of Net Neutrality to others.

 

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Worth watching for a better understanding of the principles at stake here. Great for explaining the concept of Net Neutrality to others.

Well ... the "better understanding" there, along with John Oliver's satire, is a pretty one-sided view that ignores the other effects of government regulation. It's not that easy, clear or simple. There is a considerable difference between government regulation designed to prevent the big companies from discriminating in content and other reforms that still allow new ways of offering new services to consumers. (And the different new services we are beginning to see are all in their infancy.) One affects innovation in one way and the other affects it in another. There is a legitimate debate to be had here, modifying the rules to prevent monopoly and to encourage competition from other sources without settling for the status quo.

I freely admit my own bias here, but one of my former economics professors has explained the "unintentional effects" of what would be "net neutrality" regulations. You can also see him summarize some of these ideas here (great for explaining the concept of Net Neutrality to others):

I'm not a libertarian, but occasionally one of them will be able to explain some obvious economic principles clearly. For instance, Julian Sanchez:

... If you foreclose in advance the possibility of cross-subsidies between content and network providers, you probably never get to see the innovations you’ve prevented, while discriminatory routing can generally be detected, and if necessary addressed, if and when it occurs. And the worst possible time to start throwing up barriers to a range of business models, it seems to me, is exactly when we’re finally seeing the roll-out of the next-generation wireless networks that might undermine the broadband duopoly that underpins the rationale for net neutrality in the first place. In a really competitive broadband market, after all, we can expect deviations from neutrality that benefit consumers to be adopted while those that don’t are punished by the market. I’d much rather see the FCC looking at ways to increase competition than adopt regulations that amount to resigning themselves to a broadband duopoly ...

 

I don't think this should really be that political of an issue, but it turns into one when people start lobbying for more regulations.  It comes down to how economics works, and there is a large number of us who are not in favor of monopoly, are in favor of government prevention of monopoly but who also believe, based on experience, that the FCC and other government regulations have already proven that they don't always have the answers.  Even the way the discussion has been framed is incredibly one sided.  "Now the government has decided that they might allow" some companies to pay other companies for a service.  Some of us don't live in a world where we think of things like that as what the government, in its wisdom or in its response to social media campaigns gone viral, decides to, or not to, allow.

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Contra Sanchez, I don't think next-gen wi-fi is in a place to serious present any challenge to the broadband duopoly. Neither do I see how enforced "net neutrality" would seriously interfere with that potential challenge from next-gen wi-fi providers.

 

But discussion of politics is somewhat forbidden here, so I'm wary of going much further than that in making a response.

Edited by Ryan H.

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But discussion of politics is somewhat forbidden here, so I'm wary of going much further than that in making a response.

Right, technology and economics discussions can certainly end up being mostly about politics. I don't know if we can try to discuss the economics of the issue without having a political debate. But in discussing technology, the allowances that are made for or against what we currently use or want to use will involve questions of monopoly. For instance, trying to discuss this as it would be discussed in an economics classroom:

Contra Sanchez, I don't think next-gen wi-fi is in a place to serious present any challenge to the broadband duopoly. Neither do I see how enforced "net neutrality" would seriously interfere with that potential challenge from next-gen wi-fi providers.

Well, that is just one instance, but I think it serves as an illustrative example. Arguably something like next-gen wi-fi is our future. One of the ways in which it (or something like it) will become our future could be financed or motivated by lucrative agreements with companies like Netflix to provide special services. As long as agreements like that are verboten, then not only is a motivation to innovate and create a new plan for that sort of thing eliminated, but we will never know what innovations could have or would have happened, because our attempts to limit the ability of the big cable companies now are limitations that also limit the future creativity of new providers.

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As far as I'm concerned, the potential damage that ending net neutrality could do to the internet as we know it is not worth the potential incentivization that could arise from its demise. The internet is a fragile thing.

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Anders   

 

Worth watching for a better understanding of the principles at stake here. Great for explaining the concept of Net Neutrality to others.

 

 

I don't think this should really be that political of an issue, but it turns into one when people start lobbying for more regulations.  It comes down to how economics works, and there is a large number of us who are not in favor of monopoly, are in favor of government prevention of monopoly but who also believe, based on experience, that the FCC and other government regulations have already proven that they don't always have the answers.  Even the way the discussion has been framed is incredibly one sided.  "Now the government has decided that they might allow" some companies to pay other companies for a service.  Some of us don't live in a world where we think of things like that as what the government, in its wisdom or in its response to social media campaigns gone viral, decides to, or not to, allow.

 

 

Is anyone asking for more regulations, or just that the existing rules actually be enforced? Is it really that unreasonable to expect that in a free market system that companies provide the services they are charging for without extorting more from their customers (who, lest this be framed as an anti-corporate screed, in this instance are other companies!). Can you honestly tell me that the ISPs aren't behaving like cartels? Perhaps I'm naive, but how is preventing monopoly and extortion not essential to innovation and free market values?

 

As far as I'm concerned, the potential damage that ending net neutrality could do to the internet as we know it is not worth the potential incentivization that could arise from its demise. The internet is a fragile thing.

 

This is very nicely put.

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Is anyone asking for more regulations, or just that the existing rules actually be enforced?

That's just the problem, the "existing rules" as they stand right now, given the court rulings in Comcast Corp. v. FCC (2010) and now in Verizon v. F.C.C. (2014), are vague and unclear. These Courts were not subject to lobbyists. They were applying what, when it comes down to it, is principles of Constitutional Law about the limited powers of the government. The rulings that [a] the government does not have the power to force Internet service providers to keep their networks open to all forms of content, and that the FCC does not currently possess authority to enforce Network Neutrality rules, are based on separation of powers precedent. And think about it, are these things we really want the government to be able to forbid? If the government mandates that network providers to open to networks to any form of content (which is the heart of Network Neutrality) doesn't that actually increase the potential for monopoly, forbidding a market mechanism that could be used to favor smaller producers of content rather than bigger ones?

The "existing rules" (whatever is left of them after recent Court rulings) have been crafted in 2008, 2010 and 2011 from a 2005 policy. That is pretty recent, and honestly the issue has not really been fully debated yet in the public square.  And ... without Congress actually passing some legislation based under the Commerce clause, the Courts are going to keep suppressing the FCC's efforts to tell providers what to do.

 

Is it really that unreasonable to expect that in a free market system that companies provide the services they are charging for without extorting more from their customers (who, lest this be framed as an anti-corporate screed, in this instance are other companies!).

See, right here you are assuming that charging more for a higher quality service equals extortion. In Economics 101, forbidding one party from charging higher prices to another party is called price controls. Can price controls occasionally be used to fight monopolies? Of course they can. But price controls are not the only legal means of discouraging monopolies, and price controls have historically proven to have serious debilitating, even if unintended, effects.

 

Can you honestly tell me that the ISPs aren't behaving like cartels? Perhaps I'm naive, but how is preventing monopoly and extortion not essential to innovation and free market values?

Of course the big ISPs are behaving like cartels. The question is what are the most proven economic methods for discouraging cartels. Fixing price controls or mandating that a producer treat every product "equally" are two of the very worst methods that you are taught about in Economics 101. Other options include fines to merely increase the price of discrimination, regulations as to mergers (preventing the consumer from having to pay the higher costs caused by collusion), tax incentives to smaller innovative ISPs (the greatest threat to any attempted cartel comes from entry into the industry of new sellers who choose not to follow the cartel’s pricing preferences), or prohibiting other entry barriers into the market. Also keep in mind that the government is notoriously bad at regulating cartels in ways that actually end up protecting them more than discouraging them. (See the Great Depression era National Recovery Administration (NRA) and its “Codes of Fair Competition”.)

 

As far as I'm concerned, the potential damage that ending net neutrality could do to the internet as we know it is not worth the potential incentivization that could arise from its demise. The internet is a fragile thing.

I'm not quite sure that we really have "net neutrality" right now. When did it begin exactly? In September of 2009?

Another thought: there are some people who are thinking of the future possibility of services that would discriminate as to online content. (As only a single example, think of a filter on Google searches, where you could select different kinds of search results to exclude - say all advertising, all Buzzfeed results, all results from specifically designated entertainment websites, etc.) Couldn't that be a good thing for those who would want it.

This is just one example, but David Foster Wallace spent some time wondering about this, and David Lipskey writes a summary of some of their conversation in Although of Course You End Up Becoming Yourself:

“... Because of this idea that the Internet’s gonna become incredibly democratic? I mean, if you’ve spent any time on the Web, you know that it’s not gonna be, because that’s completely overwhelming. There are four trillion bits coming at you, 99 percent of them are shit, and it’s too much work to do triage to decide. So it’s very clearly, very soon there’s gonna be an economic niche opening up for gatekeepers. You know? Or, what do you call them. Wells, or various nexes. Not just of interest but of quality. And then things get real interesting. And we will beg for those things to be there. Because otherwise we’re gonna spend 95 percent of our time body-surfing through shit that every joker in his basement [has created] ...

If you go back to Hobbes, and why we ended up begging, why people in a state of nature end up begging for a ruler who has the power of life and death over them? We absolutely have to give our power away. The Internet is going to be exactly the same way. Unless there ware walls and sites and gatekeepers that say, ‘All right, you want fairly good fiction on the Web? Let us pick it for you.’ Because it’s gonna take you four days to find something any good, through all the shit that’s gonna come, right?

We’re going to beg for it. We are literally gonna pay for it. But once we do that, then all these democratic hoo-hah dreams of the Internet will of course have gone down the pipes. And we’re back again to three or four Hollywood studios, of four or five publishing houses, being the ... right? And all of us who grouse, all the anarchists who grouse about power being localized in these media elites, are gonna realize that the actual system dictates that ...”

 

Wallace was half-playing here, but I think his suspicion that there will soon be a demand for internet gatekeepers devoted to quality is correct.  An ISP provider could even come along and say something like, "Look, if you use us, the content is going to be severely limited.  No social media.  No entertainment pop/celebrity websites.  No irrelevant data.  But, if you use us, we will help you obtain the very best quality that the Internet has to offer."  Would that be wrong?  Should the government forbid something like that?

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Anders   

 

Is anyone asking for more regulations, or just that the existing rules actually be enforced?

That's just the problem, the "existing rules" as they stand right now, given the court rulings in Comcast Corp. v. FCC (2010) and now in Verizon v. F.C.C. (2014), are vague and unclear. These Courts were not subject to lobbyists. They were applying what, when it comes down to it, is principles of Constitutional Law about the limited powers of the government. The rulings that [a] the government does not have the power to force Internet service providers to keep their networks open to all forms of content, and that the FCC does not currently possess authority to enforce Network Neutrality rules, are based on separation of powers precedent. And think about it, are these things we really want the government to be able to forbid? If the government mandates that network providers to open to networks to any form of content (which is the heart of Network Neutrality) doesn't that actually increase the potential for monopoly, forbidding a market mechanism that could be used to favor smaller producers of content rather than bigger ones?

The "existing rules" (whatever is left of them after recent Court rulings) have been crafted in 2008, 2010 and 2011 from a 2005 policy. That is pretty recent, and honestly the issue has not really been fully debated yet in the public square.  And ... without Congress actually passing some legislation based under the Commerce clause, the Courts are going to keep suppressing the FCC's efforts to tell providers what to do.

 

 

I don't have time to get too much into this, but I do appreciate your diametrically opposed view and your legal expertise. But if I understand correctly, the vagueness of the existing rules only comes about because the ISPs at some point (i.e. when it became inconvenient for them) decided that they no longer wanted to be treated as "common carriers". Is this correct?

 

Can you honestly tell me that the ISPs aren't behaving like cartels? Perhaps I'm naive, but how is preventing monopoly and extortion not essential to innovation and free market values?

Of course the big ISPs are behaving like cartels. The question is what are the most proven economic methods for discouraging cartels. Fixing price controls or mandating that a producer treat every product "equally" are two of the very worst methods that you are taught about in Economics 101. Other options include fines to merely increase the price of discrimination, regulations as to mergers (preventing the consumer from having to pay the higher costs caused by collusion), tax incentives to smaller innovative ISPs (the greatest threat to any attempted cartel comes from entry into the industry of new sellers who choose not to follow the cartel’s pricing preferences), or prohibiting other entry barriers into the market. Also keep in mind that the government is notoriously bad at regulating cartels in ways that actually end up protecting them more than discouraging them. (See the Great Depression era National Recovery Administration (NRA) and its “Codes of Fair Competition”.)

 

 

Of course, none of those other methods for discouraging cartels seem to be on the table, particularly regulation of mergers, given the mergers we've seen approved by the FCC recently (e.g. Comcast/Time Warner). 

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Anders   

 

 

Wallace was half-playing here, but I think his suspicion that there will soon be a demand for internet gatekeepers devoted to quality is correct.  An ISP provider could even come along and say something like, "Look, if you use us, the content is going to be severely limited.  No social media.  No entertainment pop/celebrity websites.  No irrelevant data.  But, if you use us, we will help you obtain the very best quality that the Internet has to offer."  Would that be wrong?  Should the government forbid something like that?

 

 

I'm skeptical of this. The internet is not like a library or a bookshelf in that the technological barriers to searching massive amounts of information are almost nil. So I could, conceivably, write some code/algorithms/etc. that would help me to massively narrow down the choices. But that decision should be in my hands, not the hands of the service provider, who limits me from see what he's excluding, etc. I'm not saying that government should outright forbid that (and I don't see that Net Neutrality enforcement does, since this is an issue of content aggregation and filtering as opposed to data throttling).

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As far as I'm concerned, the potential damage that ending net neutrality could do to the internet as we know it is not worth the potential incentivization that could arise from its demise. The internet is a fragile thing.

I'm not quite sure that we really have "net neutrality" right now. When did it begin exactly? In September of 2009?

As an idea, it originated in 2003, when the term was coined by Tim Wu. As an American legal principle, it's less clear. The FCC's sense of what qualified "open internet" was established in 2005, and those principles were used to prosecute Comcast for content discrimination in 2008. 2009 was the first time a statement that fully clarified it as a legal position was presented by the FCC.

To respond to your examples, I'll say this: I don't object to an internet user choosing what he or she is exposed to via the internet. I do object to the possibility of an ISP stacking the deck in its favor, as currently happens with cable programming (oh, what I'd give for a cable provider that permitted me to choose individual channels!), and is what I see happening if "net neutrality" is abandoned without other reform. And, given the current landscape, I'd say other reform is exceedingly unlikely, so it's much better to hold on to "net neutrality."

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Rushmore   

Wired: What Everyone Gets Wrong in the Debate over Net Neutrality

 

The only trouble is that, here in the year 2014, complaints about a fast-lane don’t make much sense. Today, privileged companies—including Google, Facebook, and Netflix—already benefit from what are essentially internet fast lanes, and this has been the case for years. Such web giants—and others—now have direct connections to big ISPs like Comcast and Verizon, and they run dedicated computer servers deep inside these ISPs. In technical lingo, these are known as “peering connections” and “content delivery servers,” and they’re a vital part of the way the internet works.

...

We shouldn’t waste so much breath on the idea of keeping the network completely neutral. It isn’t neutral now. What we should really be doing is looking for ways we can increase competition among ISPs—ways we can prevent the Comcasts and the AT&Ts from gaining so much power that they can completely control the market for internet bandwidth. Sure, we don’t want ISPs blocking certain types of traffic. And we don’t want them delivering their own stuff at 10 gigabits per second and everyone else’s stuff at 1 gigabit. But competition is also the best way to stop these types of extreme behavior.

Edited by Rushmore

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NBooth   

NPR: FCC Approves Net Neutrality Rules For 'Open Internet'

 

The Federal Communications Commission approved the policy known as net neutrality by a 3-2 vote at its Thursday meeting, with FCC Chairman Tom Wheeler saying that the policy will ensure "that no one – whether government or corporate – should control free open access to the Internet."
 
The policy helps to decide an essential question about how the Internet works, requiring service providers to be a neutral gateway instead of handling different types of Internet traffic in different ways — and at different costs.

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