Saturday, April 7, 2018

Discussion on Net Neutrality


A few months ago the FCC controversially overturned some Obama-era regulations on so-called “net neutrality.”  I have mixed feelings about the process through which that the decision was made, but ultimately, I’m skeptical those regulations were necessary.  This puts me at odds with most of my generation, particularly on Reddit or Facebook or other places tech-savvy and left-leaning young people like to congregate.  Below is a truncated excerpt of a discussion I had with one of my friends on the subject several months ago, which I’d forgotten to post until now.


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Based on what I’ve read so far, there are five major arguments in favor of keeping these regulations:


1.     Without net neutrality, ISPs could censor or throttle web content for political reasons, which would give them undo influence over American political discourse.  Alternatively, they could censor morally subjective content (like porn or P2P streaming) in a meddlesome and undesirable way.



2.     Without net neutrality, ISPs could censor or throttle web content that threatens their business interests (like their competitors’ content, or that of their competitors of their partner companies, etc.) which would inhibit progress and hurt consumers.


3.     Both 1 and 2 have happened before.  Contrary to what the right is saying, this is not “a solution in search of a problem” because there are documented historical examples of ISPs censoring and throttling certain content before Obama’s Net Neutrality rules went into effect.



4.     The typical market solution to these problems – competition – is not currently possible due to the de facto ISP monopoly that exists in most parts of the U.S.



5.     Whether or not mandatory net neutrality is a good idea, the way in which Trump’s FCC has gone about repealing it has been shady and deceitful, feeding fears of excessive corporate influence on American politics.  Pai is a former Verizon lobbyist who’s basically in bed with the companies who will benefit, and has made clear he has no regard for public opinion on the matter.



I’ll play devil’s advocate on those five arguments first, before concluding with some qualms about regulation generally.



1.      “Without net neutrality, ISPs could censor or throttle web content for political reasons”


First, there are strong arguments that ISPs are allowed to do this already, even with net neutrality regulations in place. Here are some links explaining why.



Second, when has that ever happened?  None of the examples cited by that famous Imgur screenshot pertain to political blocking, and I don’t see any intuitive reason it would be in Comcast or Verizon’s business interests to engage in that sort of censorship.  These aren’t Chick-fil-A type companies that are politically active on social issues, and they don’t much care which ideas you encounter on the internet.  All they care about is how much data you’re consuming and how much that costs them.

Third, ISPs aren’t the only internet corporations capable of blocking content.  Facebook, Twitter, Google and Yahoo – ironically the most passionate advocates of net neutrality – already censor content they don’t like every single day.  Why should I trust ISPs with this power less than I trust Google or Facebook, and why should I be particularly concerned about this problem now if it’s already happening?



2.     Without net neutrality, ISPs could censor or throttle web content that threatens their business interests.


This is a good argument, and the one that most concerns me.  I can totally see Comcast throttling Netflix (unless you’re willing to pay more) in order to push their own shitty substitute products at cheaper prices. Regional monopoly makes this inescapable for many consumers.  That’s inconvenient for my generation of data-guzzlers, who currently benefit from one-size-fits-all pricing models.  I can see why you’re upset about it, and might even be better for me personally were net neutrality to remain in place.



The trouble is, I’m not sure the status quo is fair to people who don’t use the internet the same way I use it.  My grandma just needs to check her email, talk to Alexa and write Happy Birthday on her grandchildren’s wall.  If Verizon were allowed to offer a package for the only three websites she knows how to use, her internet costs would plummet and her standard of living would improve.  What moral principle makes that wrong?

Meanwhile, Netflix alone consumes 37% of US bandwidth during peak hours.  Why shouldn’t it (and its users) pay proportionally more for that?  I'm not offended at the thought that people (like me) who use 10x or 100x as much data as the average user might have to pay more than average. The argument that a given speed of data delivery can only cost one price, no matter how much you use it or how often, seems arbitrary and unreasonable.



In a way this reminds me of the debate over Obamacare’s individual mandate.  Some demographics are statistically certain to incur much higher healthcare costs than others.  The individual mandate’s central theory is that in order to keep healthcare affordable for these people, we need young and healthy people to buy insurance to help subsidize the costs for the old and sickly.  Same thing with data: some websites (and the people who frequent those websites) use way, way more than data than others.  Intentionally or not, preventing ISPs from charging differential rates for those sites has the effect of forcing those using tiny amounts of data to subsidize the costs of those using massive amounts of data.

I’ve opposed this argument fiercely when it comes to ObamaCare, since government has no right to coerce people into group payment schemes for whatever it subjectively deems a “public good”.  And surely, high speed Netflix access is much less of a moral imperative than universal healthcare access, so the moral argument behind forced subsidization is even weaker.  Price discrimination makes markets more efficient and reduces overall costs in lots of other markets, from air travel to sports tickets on StubHub.  Why shouldn’t ISPs be able to make some websites cheaper than others in like fashion?  If they abuse it and consumers lose, the next administration can always reimplement the rules anyway.  It hasn’t been a noticeable problem yet, though, so I’d rather let them innovate and experiment and see how it goes before inviting federal involvement.



3.     Both 1 and 2 have happened before.



Responding again to this screenshot, recall that the Open Internet Order Chairman Pai wants to repeal only went into effect in 2015.  Each of the cited examples of why we need net neutrality occurred before that time.  On several of the examples, the FCC was able to put a stop to the behavior even without the OIO; on the others, the conduct either incited enough consumer backlash to enact change privately, or didn’t really hurt anybody and went by unnoticed.  Is bringing the internet back to the way it was in 2014 really that scary a proposition?  Didn’t it develop just fine for decades without the FCC claiming Title II legal authority over it?



4.     The typical market solution to these problems – competition – is not currently possible due to the de facto ISP monopoly that exists in most parts of the U.S.



I certainly share this concern.  ISPs do have a monopoly in many regions and that’s antithetical to the free market I support.  These monopolies are always the result of TOO MANY government regulations on public utilities, and the ideal solution is to remove barriers to market entry by deregulating those fields.  Nevertheless, I recognize that’s not likely to happen soon, and in the mean time we need to deal with the market as it actually exists. 

Thankfully, I think there are alternative means of acquiring internet access on the way which may be sending landline ISPs the way of the dinosaur.  5G mobile service is almost here, and once it is, rumor has it tethering from phones will reach similar speeds as landline ISPs, even for video streaming.  There’s plenty of competition among mobile service providers which hopefully will liberate people from relying on entrenched cable providers.

In any case, this point is reliant upon #1 and #2 actually being problems in the first place, which I think my rebuttals above show are not so scary as portrayed.



5.     Whether or not mandatory net neutrality is a good idea, the way in which Trump’s FCC has gone about repealing it has been shady and deceitful, feeding fears of excessive corporate influence on American politics.  Pai is a former Verizon lobbyist who’s basically in bed with the companies who will benefit, and has made clear he has no regard for public opinion on the matter.



Frankly, I don’t care about public opinion here either.  Net neutrality is a very complicated issue which even college grads like us struggle to understand.  Outside a narrow echo-chamber of hyperventilating Redditors, the public are by and large oblivious to this issue, or else terribly confused by it – just like they are on Bitcoin or health insurance markets or Federal Reserve Banking or lots of other stuff our government tries to regulate.  We don’t have a direct democracy and I think that’s a good thing. Ultimately ISPs are private companies, and what they do with their property shouldn’t be up to majority vote.



As for the corporate donors, I think “legal bribes” is a bit cynical, since there’s little evidence those donations changed how the receiving politicians would have otherwise voted anyway.  Republicans have opposed most federal regulations for decades, long before net neutrality was on anybody’s radar.  Are lobbyists really “bribing” these congressmen to switch their votes – or just donating to whichever politicians were already advocating their preferred policies? Are congressmen unscrupulously selling their votes to the highest bidder – or determining their principles first, and then accepting money from whomever would benefit from those principles’ enactment?  Surely pro-neutrality companies like Google and Netflix are also donating to politicians on the democratic side, but neutrality advocates don’t see this as “bribery” because they understand the ideological arguments motivating those donations.  Why is it different in reverse?


That said, I certainly agree big corporations are far too “in bed” with regulators and congressmen in general.  This problem is widespread in our government and not unique to the FCC.  But the only solution to that is to reduce regulation – to get money out of politics by getting politics out of money – and that leads me to the more general observations I’ll bring up in my next comment.



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Ultimately, each of these arguments for net neutrality rely on a deep distrust of ISPs.  This is presumably because they’re enormous, faceless monopolies that care only about profit, and have proven unresponsive to consumer demands. I hate Comcast too, so in a way I understand that distrust.  But regulating net neutrality still doesn’t follow from that, for two big reasons:



1.     The loudest proponents of net neutrality – Netflix, Google/YouTube, etc. – are ALSO massive, profit-hungry corporations, seeking only to entrench their internet dominance by preventing the emergence of cheaper alternatives.  What’s more, these corporations have even greater power to censor content they don’t like, which they use every single day without protest.  So the distrust of corporations cuts both ways, and seems mighty selective on the part of net neutrality advocates.



2.     More importantly, the government is currently run by Donald Trump, which from my view means left-leaning people should trust its motives even less than they trust those of corporations.


There’s a tremendous doublethink here in the way net neutrality advocates simultaneously support the regulation and oppose the regulators with equal zeal.  At the moment,
they absolutely loathe the FCC – it’s difficult to overstate how intensely they hate it.  Articles lamenting how evil and corrupt Ajit Pai is make the front page of Reddit almost every day.  He and his family have received death threats, as have congressmen who support him.  And yet, what they’re angriest at him for is nothing more than attempting to voluntarily reduce his own power! Articles are accusing him of “killing the internet” and “ending the internet as we know it,” and their authors want to save the internet by…keeping him in charge of it?

I think these people are quite right to not like the FCC, because it’s a useless relic of 1930’s radio law which has long out-served its purpose.  All they do is censor tame cuss words on morning talk radio, put dumb stickers on rap CDs and go ballistic when a nipple appears on a Super Bowl halftime show – we’d be better off without them.  But the implication of believing the FCC is corrupt and incompetent is not to increase its power!



Regulation advocates often criticize my libertarian beliefs for being too idealistic and detached from reality.  “Maybe a free market works in theory,” they say, “but in practice, things get a lot messier.”  The point about monopoly is a good example of this: competition may punish companies who displease their consumers in a perfectly free market, but in a world where government restricts market entry, we can’t rely on competition to reign in Comcast’s abuses.

That’s fair enough, but it also works in reverse.  Just as markets designed for a state of nature have to deal with a governed world, regulations designed to be implemented by impartial and like-minded regulators have to reckon with the on-the-ground realities of regulatory capture and partisan changeover. 
“I support regulation enforced by selfless, nonpartisan, all-knowing regulators impervious to corporate elbow-rubbing” is not a credible position, because there exist no such people.  That’s what makes the left’s love/hate relationship with the FCC right now so incoherent.  Obama’s OIO granted the FCC ex ante regulation of the packages ISPs offer *on the presumption/hope* that they would use that power to protect consumers in a neutral way.  If it turns out the FCC is prone to takeover by Verizon sellouts – as you each now allege – that presumption was unfounded, and the debate over the regulation’s desirability needs to take that into account.

I don’t want these people anywhere near the internet and you shouldn’t either.
  When SOPA and PIPA were proposed a few years back, Reddit and Wikipedia and Google all joined together to prevent the US federal government from seizing control over the internet in any way.  The common refrain was that the internet was not broken and didn’t need fixing, so if you could all just back the hell away from it and let it be, that’d be great.  I still think that – what changed?



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My friend had this to say in rebuttal:



1. Google, Amazon, Facebook, Netflix, etc. are in favor of NN because they think their users are in favor of it (which they are). They don't actually care one bit either way. If NN dies, they've got enough money to ensure their traffic is never slowed. Money that startups and newcomers don't. If it doesn't die, hey look at that, they save a few hundred million dollars. They're still going to crush newcomers a myriad of other ways (hopefully on merit of their technology...).

2. You make a good point - the current administration can't be trusted to tell you the time. It doesn't inspire much faith that his team would be the ones that would handle NN violations. But (a) he's not always going to be in charge and (b) at least there should be more visibility into his (mis-)handlings of NN cases than say what goes on in an underground bunker at Comcast HQ. I also seem to recall part of Pai's proposal (at least a few months ago) was to revoke Title II classification in such a way that the FCC/congress wouldn't be able to change their mind in the future... I'll need to find a source on this though. I'm also not sure if it's part of the current proposal.

There's also the bit about the FTC commissioner explaining that they are unprepared to take over the FCC's job:
https://www.theregister.co.uk/.../dont_rely_on_us_to.../.



Side note - the FCC is not entirely useless (though yes their censorship is nonsense). The fact that your microwave oven doesn't zap Grandma's pacemaker or close your garage door on your dog randomly is not a coincidence. It's also not an example of corporate altruism by device manufacturers. Given the choice, plenty of companies would import cheap Chinese chips that spew RF. Similar to how you can pretty much guarantee non-UL listed power supplies will burn your house down (although of course UL is not a gov't agency): profit >> safety.

Regarding SOPA and PIPA - they're entirely unrelated nonsense by the RIAA & friends that would have given us the joys of DNS blocking and deep packet inspection. Essentially our own "Great Firewall of China". DNS is like a phone book, and DNS blocking is like someone redacting entries from your phone book with a Sharpie. Now let the people doing the redacting be any company that *claims* some of the phone numbers infringe on their property, and you've got SOPA and PIPA. Just because we didn't want them doesn't mean we never wanted any Internet related bills.



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My response: Fair point on SOPA and PIPA.  The rest I’ll quibble with.

Regarding #1, I think that’s a naïve and hypocritical perspective on what motivates major tech corporations.  There are “a few hundred million dollars” on the line for Google, Amazon and Netflix, about which they supposedly “don’t actually care one bit either way” – whereas Comcast and Verizon can’t be trusted without net neutrality rules, or else they’ll surely abuse throttling and censorship power to squeeze every last dime out of their customers?  Either corporations lobby and operate strategically in order to maximize their profit, or they don’t.



As for #2, “I know the current rule enforcers suck, but better people might enforce them in better ways in the future” is not a compelling argument for state force.  I personally don’t trust Democrats any more than the Republicans, but even if you think there’s a night and day difference, the idea that FCC appointees can be reasonably expected to alternate between good and evil for the foreseeable future is not comforting.



Finally, what role does the FCC have in regulating microwave safety?  I think you’re wrong to believe that safety and profit are contrasting incentives without government regulation generally and I’m happy to debate that (you beat me to it by mentioning UL), but unless the FCC has overstepped their bounds much further than I previously appreciated, microwaves are not a communications product subject to their purview anyway?

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