How we got to the point where utility-style regulation is seen as the key to ensuring a free and open internet is a true puzzle.
Utility-style regulation gives regulators plenary authority over the internet - meaning full and complete. Their power to do this or to forbid that is highly discretionary and essentially boundless.
This in turn gives a gatekeeper role to the regulators: you play by their rules or you don't play. And that means they have final say over what happens across the internet, at least within U.S. jurisdiction.
So today they say net neutrality rules.
Tomorrow maybe it is price controls in the name of consumer fairness. Or maybe it is mandated compliance with government snooping orders in the name of national security. Or who knows what not?
Why not? With a utility-style regulatory framework, you essentially have a form of administrative law run wild, legally speaking. Standards are exceedingly vague, power is wildly broad, and (in the end) he who has the most power and pull to control the regulators winds up having the final say over what the law is or is not as it affects the internet.
This is the exact antithesis of the largely hands-off idea of what the government could do with respect to the internet over the past several decades.
Of course law tends to conform in the short term to what people want and, today, most people truly do want a free and open internet. Therefore, the risk of any existential threat to internet freedom is either minimal or non-existent in the short term.
But if your idea of preserving maximum internet freedom is in effect to place a loaded gun to its head and then declare it is not a problem because it is the good guys who control it and who therefore will use it only for good purposes, then you have what you want with utility-style regulation of the internet.
It might just work great as long as the good guys are in control. But what happens when it changes some day? And, if you think it cannot, then you have far, far more faith in human nature than I can possibly summon.
I think you're ignoring the very real problems with the Internet infrastructure while you raise alarms about prospective problems. The reason utility-style regulation is a good thing is because the Internet is a utility. And like most other utilities, natural monopolies arise and the free market is distorted. There is already a gun to the head of the Internet, but instead of being putatively controlled by the populous at large it is controlled by entrenched rent-seeking oligopolists who are beholden only to shareholders that do not care about the function of the market.
Yes, there is a risk that the regulators will declare any number of rules for any number of reasons. Yes, regulatory capture of regulators is a real problem. The solution to these two problems is not to cede control to multinational corporations. Your lack of faith in human nature should extend to all humans, not just ones who are the apparatus of the state.
> Your lack of faith in human nature should extend to all humans, not just ones who are the apparatus of the state.
It's not that there's some reason to preternaturally trust corporations and to distrust the state, it's that the apparatus of the state is infinitely more powerful. If a corporation acts unethically, you lose the benefits and service it provides. If the state acts unethically, you lose your freedom and/or your life. That's a colossal difference.
Likewise, if the choice is between Google controlling access to the internet and Chinese-style regulation controlling access to the internet, there's really no choice at all: who would pick Chinese internet service over Google Fiber? And make no mistake: with utility-style regulation the only boundary between the FCC and the PRC is "the people", and if this year's election has shown anything, they are a fickle and largely ignorant bunch. "Utility-style regulation" isn't an epithet because the internet shouldn't be treated as a utility; it's an epithet because utility regulation over the past hundred years has been absolutely disastrous, enabling the supreme power of corporations, not limiting it. It's really, really sad to see the internet falling into the hands of telecoms and the FCC.
I am 44 years old, which means I remember growing up at a time when you were not allowed to own a telephone -- because AT&T exercised its corporate monopoly to control what you could plug into your AT&T phone line, and they would only permit that to be an AT&T phone, and they would not ever sell you an AT&T phone, they would only rent you one at an exorbitant price. And they didn't bother to provide you any variety in models, because why would they? There's one phone, that is what you get.
Also, if you wanted to call someone in a different area code, then I hope you are ready to shell out some cash...
If it weren't for state-exercised power, it is quite possible that things would still be this way.
I do not consider today's situation a disaster at all, relatively speaking. (For sure there are still many un-ideal things about it.)
But for the most part, it is just that AT&T kept buying smaller companies, which is just what happens in capitalism when one party starts to win, which is why checks on capitalism are necessary.
And some people are flat out wrong. Monopolies at the local level are very common historically. Small towns would have 1 blacksmith for example as there was not enough work for 2 and transportation was prohibitive.
Yup, and it feels like the blacksmith allocation is very similar to last-mile infrastructure investments. Its not worth putting two sets of infrastructure because either the existing operator is going undercut the new entrant, putting them out of business, or the competitors are going to split up some fraction of the market each, but now, both companies and their customers have to bear the full-cost of capital to wire and maintain the whole market area twice.
What's the problem then if there's not enough work for 2? You're close to a barter economy at that point. The blacksmith can't gouge the customers he depends on for everything else.
Individual sales matter less to the blacksmith than their customers. So, they might not gouge their customers but padding bills is common behavior after all selling 10% less at 20% higher profit is a net gain. Consider how important the internet is to you vs an extra 20$ a month in profit is for a multi billion dollar company.
This is not a moral judgment. It is simply the seller doing what is in their best interest, just like they would in a competitive market.
The difference is that in a competitive market, this self-interest happens to lead producers to do what is in the public interest, but in the monopoly case it generally leads to lower production and higher prices than would be optimal. For more explanation, here's a Wikipedia article that jibes with my college Intro to Econ class:
15 years ago Microsoft had a monopoly on the x86 operating system market and used that position to unfairly take browser market share by bundling IE with Windows. They had agreements with almost all PC manufacturers to ensure Windows was installed on each PC sold.
> The plaintiffs alleged that Microsoft abused monopoly power on Intel-based personal computers in its handling of operating system and web browser sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer (IE) web browser software with its Microsoft Windows operating system. Bundling them together is alleged to have been responsible for Microsoft's victory in the browser wars as every Windows user had a copy of Internet Explorer. It was further alleged that this restricted the market for competing web browsers (such as Netscape Navigator or Opera) that were slow to download over a modem or had to be purchased at a store.
Well, yes. In the sense that I use search engines other than Google, and I know others who do the same. And I know many people who use operating systems other than Windows.
I get what you mean, but at the same time, a monopoly these are not. Just because there are companies that have a very large market share does not mean there are no alternatives.
To resolve the matter of being unallowed to plug anything non-AT&T into AT&T phone lines, you can just make a law stating that anything that can operate compatibly on the network is allowed to participate, something that allows consumers to bring their own device. You don't have to have utility-style control, nor do you have to break up the company, to resolve that particular issue.
> To resolve the matter of being unallowed to plug anything non-AT&T into AT&T phone lines, you can just make a law stating that anything that can operate compatibly on the network is allowed to participate,
That's pretty much what the Open Internet Order (both the 2010 one that was, except for transparency provisions, struck down and the current one that was just upheld by the same court that struck down the earlier one) does.
> You don't have to have utility-style control,
Which, largely, the FCC isn't doing here. Now, the FCC had invoke the provisions which allow utility-style control because the courts previously struck down its attempt to institute similar "people can plug legal devices into their internet connections and access legal content over their internet connection" rules without invoking the "telecommunication service" common carrier, "utility-style" provisions of the law.
But, while the details of the current order are different from the 2010 order (for one, more of the provisions apply to mobile broadband in the same ways as fixed broadband, because that market had matured in the intervening time period such that the argument that it was too new and evolving to know if the same style of regulation would be appropriate), it mostly doesn't apply "utility style" regulation, even though it invokes authority which would allow utility-style regulation.
If anyone else wants to know the significance of this device, it allowed for the argument to be made that any device should be able to be connected to the network, provided it did not interfere with it. It paved the way for non-AT&T equipment. The FAX and answering machines were allowed as a result (many people/industries still cling to these ideas; they are the reason voicemail hasn't gone the way of the dinosaur). Skype used it in '07 to
"petition for rulemaking was filed with the FCC by Skype, requesting the FCC to apply the Carterfone regulations to the wireless industry—which would mean that OEMs, portals and others will be able to offer wireless devices and services without the cellular operators needing to approve the handsets. However, on 1 April 2008, FCC chairman Kevin Martin indicated that he would oppose Skype's request.[3]"
Or, rather than be bothered passing a law for every possible case, Congress can delegate rule making authority to an agency like the FCC, which develops technical expertise in the domain.
>Likewise, if the choice is between Google controlling access to the internet and Chinese-style regulation controlling access to the internet, there's really no choice at all:
This is a straw man argument, that's not the only choice, in fact it's not even the actual choice facing us right now.
>it's an epithet because utility regulation over the past hundred years has been absolutely disastrous, enabling the supreme power of corporations, not limiting it.
This is not universally true. In the comparatively economically conservative Southeast where power generation and the electric grid have been regulated as public utilities for as long as anyone can remember, there was never a temptation to experiment with deregulation as in CA, and no small bit of schadenfreude when Enron wrecked havoc on the CA energy system as a result.
Stability is an (maybe the most) important characteristic of national economic infrastructure that is susceptible to systemic risk. It enables the forces of innovation to confidently build on top of it - capital formation, ROI forecasting, planning & investment, long-term credit extension to wealth-creating industries, etc. Introducing shocks and instability into the base layer infrastructure makes that wealth creation activity much more difficult and constrained.
> if the choice is between Google controlling access to the internet and Chinese-style regulation
You're committing the fallacy of the excluded middle. There is a massive gulf between unregulated behavior of publicly-held companies and authoritarian dictatorship by an unelected body, and the USA is somewhere there in the middle.
> If a corporation acts unethically, you lose the benefits and service it provides. If the state acts unethically, you lose your freedom and/or your life.
Several thousands people who died in Bhopal on Dec 2, 1984 might think otherwise. Or 2,209 people who died in Johnstown, PA on 1889 when South Fork Dam failed. Or another 502 people killed on Jun 29, 1995 when Sampoong Department Store collapsed. Or...
What about the 10 million people that died during the Holocaust, or the 30 million people that died in the Great Famine (or, for that matter, oppress and enslave African-Americans for 300+ years)? Obviously too little/poor regulation can allow corporations to commit truly awful atrocities, but I've yet to see any private enterprise cause a fraction of the damage that states around the world have.
But I digress -- in any free society people will eventually cause horrible things to happen, it just seems to me that the government inevitably causes much worse things to happen.
Your first assertion read as if you claimed unethical corporations don't kill people. I showed that it's not the case.
Now you say even unethical corporations normally kill much fewer people than unethical governments. Which is true. But I have to ask, why do unethical corporations kill so few people? After all, they're all led by the same greedy people. It's not like CEOs magically become conscientious and say "Well, we can make billions of dollars by screwing all these poor people, but fuck it if we end up killing them!"
The answer: governments. Governments keep corporations in line so that they can't get away with killing people. Where a government is run by better people, corporations tend to not kill people, because they'll face consequences.
So, you are right that an incompetent government can be much more dangerous. However, one way such a government can kill people is by colluding with corporations and voluntarily relinquishing its authority (and duty) to police them as a government should. When you're limiting the government's power over corporations, in some situations, you could be in fact ensuring that the government remains incompetent.
The fact that governments can do terrible things doesn't logically follow that giving the FCC limited authority to keep ISP and telecoms from totally screwing us will lead to the holocaust. I believe you have just Godwinned your thread.
There is active push back from a whole host of multinational megacorps for any relatively toothless threat represented by todays FCC what should concern you is that those same forces are actively largely ok with the real existential threats to freedom on the internet today.
I must ask, where on your scale does the tobaco companies ends up? If we are comparing the potential damage that an ISP can do vs hitler, I think it just fair to bring in smoking as a counter argument that government causes more damage than private enterprises.
Metacomment: I disagree with this comment but was sorry to see it down voted (greyed out) so upvoted it. It doesn't matter at this point why I might disagree with it; it's on topic and did not deserve a down vote just because someone(s) disagreed with it.
The funny thing about these pop "fallacies" is that they're often perfectly reasonable explanations. They're not necessarily fallacious and thus shouldn't be labeled "fallacies".
It seems that someone put a bunch of common explanations on a web page and stuck the word "fallacy" after all of them so that they could use it to try to win arguments with easily-intimidated persons.
Slippery slope is valid when party A is trying to move parties B into a position far down on the slope gradually by easing parties B down the slope.
Many situations exist wherein a series of steps could superficially be arranged in a progression or slope between points a and b but in fact individual steps have different costs and benefits and are in fact independently good or bad.
Often those arguing for/against a subset of the points in the graph have good arguments for/against then some jerk goes and implies that if you allow point 1-3 on the graph somehow by magic you will eventually arrive at point 37. They ignore the fact that its possible and in fact reasonable to support point 1-3 and skip right to the extreme and absurd.
They neatly bypass any and all relevant arguments in favor of 1-3. This is destructive to conversation because you can use it in nearly any situation. It is especially frequently used in anything involving government because somehow all roads that don't lead to anarchy somehow lead to hitler.
Its frequently useful to just point out the obvious fallacy and move on rather than giving a longer treatment because such tracks are frequently useless and drag the entire discussion inevitably towards stupidity.
According to whom? The Internet is delivered to homes on top of existing regulated utilities, that are quite essential to our survival. But I can use the Internet anywhere with a sufficient enough population density if I pay for a wireless data plan. Because the true value of the Internet is global availability of information, access to that information doesn't need to be tied to a physical address in the same way a life-saving device like a telephone does. Really energy and sanitation is what we should be thinking of. They're truly necessary utilities.
> The Internet is delivered to homes on top of existing regulated utilities
This is a popular conception but until this recent FCC order it was mostly wrong.
Most people in the U.S. access the Internet over 4 types of physical networks:
- cable TV coax
- fiber optics to the house
- DSL over existing telephone lines
- wireless signals (4G or WiFi, mostly)
Of those, only the telephone lines were an existing regulated utility. Cable networks, fiber networks, and wireless networks were not classified as utilities and were exempt from most regulations that we take for granted on the phone network, like being able to purchase and use telephone service if you want it, or calling whoever you want without being blocked or paying extra.
> But I can use the Internet anywhere with a sufficient enough population density if I pay for a wireless data plan.
Now you can. Until now, wireless data companies were under no legal obligation to sell to you, and under no obligation to serve you any particular website you request.
In short, it seems the law is catching up to where you already thought it was.
Before we had water and electricity in our infrastructure, those weren't utilities either.
And on point: here in Sweden we have both privately owned and state owned broadband infrastructure, and while it's hard to prove, i'm convinced that this came out of the university networks (SUNET) building out the framework for this in university cities in the 90s and back.
As a result of this we had good grounds for competing ISPs which today is about 12 nation wide (for 10M people), on top of which there are usually a few per city also competing for customers.
This leads to me being able to choose between 16 (!) different ISP:s on my fiber I installed last month, which will cost me $38 USD/mo for uncapped 100/100 Mbps or $89 USD/mo for uncapped 1000/100 Mbps.
Broadband internet services (both fixed-line and mobile) are increasingly being included within the definition.
As for which things are "truly necessary", that definition is not universal. In The Netherlands, over 90% of consumer banking by now is done over the Internet. That has lead to the closing of over 30% of bank branch offices, with associated cost savings. Those savings would not have been possible had Internet access not been classified as a public utility, because bank access was similarly regulated.
So Paolonerd [1] comes in last October and adds his observation to this relatively flimsy wikipedia entry and we're supposed to all just accept that definition. I see.
> A public utility (usually just utility) is an organization that maintains the infrastructure for a public service.
Who is the organization that maintains the infrastructure of the Internet? Does it include my cable modem? My router? Why or why not?
The telephone, electric service, piped-in gas, and even city water were all seen, at various times, as luxuries rather than necessities. Their regulation as utilities is part of what allowed them to become both ubiquitous and dependable, and as a result allowed people to start to depend on them.
In particular, there's no reason why IP-based networks ought to be viewed as less important than telephone service, given that telephony is rapidly becoming just one of many services that happens to be delivered over IP networks.
> But if your idea of preserving maximum internet freedom is in effect to place a loaded gun to its head and then declare it is not a problem because it is the good guys who control it and who therefore will use it only for good purposes, then you have what you want with utility-style regulation of the internet.
The problem is with an oligopoly of effectively 0-2 providers in the majority of the US you really don't have a choice.
I'd prefer to have the gun in the hand of the government instead of a corporation who decided to stop investing in infrastructure and just milk the situation.
You really need substantial competition (10+ providers) for the free market to function.
> You really need substantial competition (10+ providers) for the free market to function.
This is the most salient point. I would completely agree with OP (and I am generally in favor of fewer regulations) were we all able to choose our providers.
Didn't the lack of providers in the majority of the US happen because municipal governments got to regulate rights-of-way for installing infrastructure (copper telephone and cable wires, fiber optic cables)?
There are many solutions to that. The EU solution is to require all member states to regulate local loop unbundling, so any provider can rent access at regulated rates to connect their equipment at the local exchanges and get a raw connection to the subscribers.
How exactly you manage the company that owns the last mile infrastructure can greatly affect how well this works, but even in the UK which has done this quite poorly, there are pretty much no place where you can't pick from dozens of ISPs.
It still imposes limits as to the maximum capacity, based on the upgrade schedules of OpenReach (BT) which controls the phone/adsl network. There are some problems. E.g. due to the way regulation is structured in the UK, BT frequently gets accused of milking OpenReach for money rather than invest in upgrades at the pace they ought to (basically because they earn far more from OpenReach than from their own ISP). One solution to this type of problem would be to regulate dividends from the line operator so that there is a limit set based on the amount invested in upgrades to make it pay to reinvest and/or to allow them a higher profit margin on upgraded services for a period.
OpenReach's wholesale prices are regulated roughly based on a cost+ basis, and are open and published on their websites for everyone to read.
Overall it does mean the ISP market is quite competitive, and entry costs for new ISPs are guaranteed to be relatively low, as e.g. there are "backhaul" services available that allow an ISP to get a connection to one or a few points in BTs network and have them hand over IP connections to subscribers at that point rather than having to do local loop unbundling across the country.
> Didn't the lack of providers in the majority of the US happen because municipal governments got to regulate rights-of-way for installing infrastructure (copper telephone and cable wires, fiber optic cables)?
Unfortunately there aren't any good data sources that provide country-wide coverage of this information but I'd be willing to bet its a very common practice.
It seems to me that we're replacing bribing at the local level with bribing at the national level. This will make it much easier for large ISPs to thwart competition and defer innovation. Just another unintended consequence of government "solutions".
> It seems to me that we're replacing bribing at the local level with bribing at the national level. This will make it much easier for large ISPs to thwart competition and defer innovation. Just another unintended consequence of government "solutions".
I'm curious, if you believe bribery works at the national level as well as the local level, how do regulations that are pro-consumer get passed?
In practice, I've found that the reason it works locally is almost no one is involved in local elections besides corporate sponsors. We literally had 10% turnout in my city, for instance.
Similarly, loop unbundling and other competition increasing regulation are almost always passed at the national level in basically every country that has such.
Regulations that are pro-consumer are inacted in favor of companies that have departments and expertise dealing in such regimes. "We'll go along with regulation X if you put regulation Y in that works in our favor". Regulatory capture was a big contributor to our near finanical collapse in '08. No one cares or thinks about the burdens regulations place on start-ups, despite all the "innovation" speak around NN.
So your argument is non-US ISPs are advantaged by greater competition because they get Y but US ISPs are not because they are too incompetent to clone foreign regulation in a way that benefits them?
Hint: There isn't a rebuttal you can make because if it is true, then your argument is false. If it is false, it is an admission that federal regulations do actually function to increase competition to the benefit of consumers. There isn't a third option.
You don't seem to acknowledge the existence of private sector collusion either.
Suggestion: don't use circular logic when debating.
I acknowledge private sector collusion, and the answer is more competition. More regulation (usually influenced by the existing players) harms market entry. You need to constantly update the X & Y regulations so that start-ups have a fighting chance. That's painfully slow right now.
Yeah, obviously it's a problem with the concept of government because companies can bribe/"sponsor"politicians. Is there too much regulation or too little?
Too much overly specific and outdated regulation, and that's by design. What looks like a good, pro consumer law actually often has the backing of large corporations. Doesn't matter what party you belong to. Regulation abuse at the local level can at least be contained and voters have more power to change things or move. Not so much at the national level. Government should focus only on the things that the market cannot solve: public safety and enforcement of contracts and rights. The problem is that much of the public thinks that the government has and should complete control over the market in order to protect them, as if government is made up only of angels and wise men. The market players know more about the market than the government does, so often they are tricked or bribed into favoring one market participant over another. The only way to solve it is for the public to realize what the government does best and stop putting their personal saviors into positions of power, where their inexperience/lack of knowledge/greed/shortsightedness causes them to write bad/mediocre laws on top of existing bad & mediocre laws.
> Yeah, obviously it's a problem with the concept of government because companies can bribe/"sponsor"politicians. Is there too much regulation or too little?
You are over simplifying it.
The regulation is being done at the wrong level of government and is entirely the wrong regulation at the local & state levels.
We accept the unbounded authority of law to dictate the terms of the internet, or we accept the unbounded authority of Comcast to dictate the terms of the internet.
I have at least token influence over the behavior of my government. I do not have even the illusion of input into Comcast's iptables configuration.
In a truly competitive market it would be different. And I'd love to see a truly competive market. But as it stands, the alternative to government isn't freedom, it's unbounded and unchecked power by the cable monopolies to decide what the internet is and isn't. If someone's going to make that call, I'd rather it be someone I can vote against.
> We accept the unbounded authority of law to dictate the terms of the internet, or we accept the unbounded authority of Comcast to dictate the terms of the internet.
Ahh, but we accept the unbounded authority of law to dictate far more than our internet: our property, our freedom, and (unfortunately) our very lives. What reason is there to expect the government not to regulate every other aspect of life with data from the internet? At least Comcast can't do that.
The law is bounded by the Constitution and the process of evaluating and passing laws in the government. It may be slow, and unpleasant, and difficult to get ones particular views in place, but there is a defined, if imperfect, process to do so.
The change process doesn't exist at all if the services that are offered by a company are entirely private, except by customer choice. And if there are too few choices, then well a monopoly ISP could ban encryption on all their offered links, and parse all the data going by for resale to marketers and right back to the government too - except perhaps for those inconvenient government privacy regulations (or other regulatory rules) which may stand in the way.
By all accounts the government already has all data from the internet; whether they use it in law enforcement action and whether they regulate ISP's QoS policies are separate matters.
There is every reason to suspect that this will be so regardless of whether the FCC limits comcasts ability to milk us for all we are worth.
The issues are nearly entirely orthogonal. Network neutrality was pretty irrelevant to them installing boxes to spy on all our communications. It was irrelevant to using that data to decide whom is a communi... err terrorist. It will be irrelevant to when they decide to use that same data to limit your freedom.
Those are the things we have already given the government authority over. What we're talking about here is deciding whether to give it power over the terms of the internet.
Meanwhile, public utility water outclasses bottled, power infrastructures remain world class, and are fixed during weather catastrophes quickly, roads remain plowed, and kids receive public educations that are competitive with private schools at costs below 15k / year.
Americans have been working together to foster functioning and great societies through government for ages now. It's you that wants to test this brave new world.
> Meanwhile, public utility water outclasses bottled,
Bottled water is often just tap water.
Flint Michigan has undrinkable water as a result of decades of mismanagement from the entrenched local politicians.
The water in my city makes me nauseous to drink, so I have to buy distilled in gallon or larger containers. It is fortunate that most of my water usage is showering.
Ah, but these are anecdotes.
> Americans have been working together to foster functioning and great societies through government for ages now. It's you that wants to test this brave new world.
The victims of the Drug War (primarily poor and minorities) must live ruined lives from this "functioning and great [society] through government for ages now."
I don't know if you meant to or not, but you basically described the classic criticism against using regulation to combat natural monopolies/monopolies in general.
In a perfect world, competition and crowd dynamics maintain openness because no single actor can influence the overall market. Unfortunately, in practice we don't see perfect competition which leaves many angles for sufficiently large market participants to influence the overall market.
There are examples from relatively recent history where regulation had varying degrees of success curbing monopolistic exploits. So I wouldn't call this a brave new world so much a slight return to the "Trust Busting" regulatory days which more or less went defunct in the last 30 odd years.
While I hear your point and I think your reasoning is sound, this particular event happens to be a step in the right direction and I am not keen to throw the baby out with the bath water in this specific instance.
Perhaps if American ISPs didn't abude their monopoly position we wouldn't need regulation. Unfortunately, they do and will continue to abuse their monopoly positions unless forced to do otherwise. They had their chance to not be jerks, they failed, and now they're regulated.
Also, cable companies and ISPs have consistently been rated terribly by consumers in recent years. Most citizens view these companies as utility providers and just want them to deliver cheap consistent service. Title II makes sense in that context.
This sort of discussion always ignores the fact that the Oligopoly of ISPs have secured last-mile monopolies in a lot of states around the country. There is no free market competition to be had because these companies have explicitly agreed not to compete with each other and to buy their way to local monopolies. What recourse is there in this situation other than to have the federal government strip them of their ability to abuse their position of power?
The only alternative to complete control by a monopoly should not be complete control by governments. There is a middle ground and it's proven to be quite functional.
Look at how this is solved in other places such as Canada or the UK where they instead force the ISPs to lease lines at reasonable rates. It's caused a massive shift in cost and speed of connections.
The federal government forcing ISPs to do anything falls into the "complete control" category. The "right" thing to do would be to strip states of their ability to enter into abusive, monopolistic agreements to begin with, but then there'd be the massive issue if the federal government stomping all over state sovereignty which is its own minefield of hazards and political suicide.
There would also be the issues that 1) it doesn't work. The cost of building a last mile network is a massive deterrent to competition even in Europe, which as Americans tend to like to point out in discussions like this, has a far higher population density than the US, which makes it more cost effective, - places that allow it rarely see a proliferation of competitors, and certainly nothing like the EU/EEA competitive situation where having access to dozens of ISPs is the norm most places. 2) if it does work against all odds, there would be massive issues with companies digging up the streets all the time.
The "complete control" in the EU is very limited. The details vary by country, but the telecoms directive required each member state to ensure that access to the last mile was guaranteed. Most countries have opted for a solution where the incumbent was forced to separate out the operation and maintenance of the last mile infrastructure, regulated its prices on a cost plus basis and outlaw differentiated prices per provider, and provide access for competitors to lease space for equipment in local exchanges.
The rest of the ISP space is mostly unregulated.
What has been regulated is access to critical last-mile infrastructure. Nothing but cost stops people from building additional last-mile infrastructure.
In the UK, for example, we have numerous fibre ISPs operating their on physical infrastructure in the larger cities, where you can cover a lot of subscribers for relatively low cost, as well as Virgin Media (cable provider) that maintains their own cable infrastructure, and anyone can pay for access to install additional conduits.
But the point is you can start a competitive ISPs without it. In fact, due to backhaul (you can get IP handoff of your customers connections at a set of central locations rather than having to put your own equipment in), you can start an ISP very cheaply, and grow by adding equipment in exchanges as it becomes cost effective).
In fact, this solution has made control harder. E.g. the court decisions to block the Pirate Bay applies to a set of the largest providers only, presumably because they figured it was the most "bang for the buck" in terms of court costs. But pretty much anyone can choose from any of dozens of other ISPs without such blocks in place if they can't be bothered the hassle of working around it. Similarly the infamous "child porn filters", is something that the largest ISPs have been coerced to "voluntarily" sign up to, but because the government does not have the balls to try to push regulation of it through parliament, anyone who oppose the filters (good reason to: there's no oversight over what exactly is being filtered) can chose from dozens of ISPs that don't use them.
> Look at how this is solved in other places such as Canada or the UK where they instead force the ISPs to lease lines at reasonable rates.
The FCC will now have the authority to do that for all Internet access, if they want to.
Up until now, only telephone companies were regulated as utilities, and they were indeed forced to lease access to their lines. I buy DSL service from a "CLEC" (competitive local exchange carrier)--a company that is leasing access to the existing phone network in my area.
But until this recent FCC ruling, the FCC did not have the same authority over cable networks, fiber networks, or wireless networks.
The posts below explain the normative policy problems with your view, but fail to point out the biggest flaw: you're simply wrong, as a matter of fact, about what this decision entails.
The majority opinion directly addresses your concerns.
The majority opinion explicitly and unambiguously REJECTS the line of legal reasoning you claim it upholds, and definitely does NOT grant the FCC "plenary" regulatory authority over the internet.
The court carefully points out that is not granting the FCC any authority that was not explicitly granted by the legislative and executive branches. If you don't like net neutrality, take it up with the legislative and executive branches.
There is no slippery slope here, any more or less than democracy itself is a slippery slope.
In short, your reading of the majority opinion is patently incorrect.
> How we got to the point where utility-style regulation is seen as the key to ensuring a free and open internet is a true puzzle.
We can break it down quite simply.
- Being an ISP is not a high margin business.
- ISPs, like any other business, are always seeking ways to make more money.
- Charging sites for the privilege of traversing their infrastructure, or charging customers by the sites they load (the "cable TV" model, if you will) is a way to make more money, so ISPs want to do it.
- Consumers don't want to be charged more money for the same bits, and neither do the owners of large sites.
- Consumers have little to no choice of ISP, because being an ISP is very expensive, and as mentioned, it's pretty low profit (in the grand scheme of things.)
Pretty simple, really.
Sure, in an ideal world, we'd just be able to change to an ISP that fits our particular political bent (no traffic shaping/filtering/prioritizing for me, thanks!) but that world does not exist.
The idea, in short, is that free speech (meaning, in this case, unprioritized w/r/t bits) is more important than ISPs ability to make money. That's not the perfect scenario but it is the most acceptable one, given the world in which we live.
- you want a dumb pipe that delivers the resource. there are very few distinguishing factors on which suppliers could compete
- basic enabling technology on which other amenities depend
- installation costs dominate. you're not paying for the photons or electrons
- everyone should be served, not just customers in lucrative locations
Certainly, internet access does not rank on the same level of maslow's hierarchy of needs as clean tap water, garbage disposal or electricity. But it shares many of the supply properties.
I not only want a dumb pipe, but one that's going to get bigger over time, like it has been, for a reasonable price. I'm not sure how net neutrality is supposed to accomplish that. I don't need my water to taste better over time, or my electricity in different voltages. You can't just declare something a utility without honestly pointing out these differences and addressing potential ramifications.
That's not an incentive for monopolies. They'll take your money and not necessarily use it for new infrastructure. Things like increasing employee benefits (gov't social engineering / "god given right"), cost of maintaining outdated technology because "utilities need to be affordable by everyone!", lobbying, good 'ol fashion profit taking, etc. Why pay for better switches when you're not sure about your labor costs in 5 years, or your own retirement portfolio?
> Their power to do this or to forbid that is highly discretionary and essentially boundless.
This isn't true; the regulators are restricted by the law and by politics.
In the end, the power exists - political power is preserved - the only question is who controls it. For issues important to society, U.S. tradition is that power is allocated democratically. Americans take a vote; power is ultimately in the hands of the voters.
Every other potential authority is theoretically just as powerful and arbitrary, and usually in practice is more powerful and arbitrary (IMHO).
I agree about the risks; democracy is the worst possible system - until you look at the alternatives. What better alternative is there?
The "bad guys" will remove the regulations and let the existing regional monopolies and duopolies do whatever they want.
It's a lot easier and generates less noise than changing the rules to be openly biased while accomplishing the same thing.
Just look at what cable companies are doing after regulation requiring unencrypted basic cable service was removed. Companies are requiring users to rent a proprietary DTA; when their TVs already support clear QAM, so there is no valid analog spectrum freeing argument.
That deregulation was done by the FCC under different management than it is now (~2012 iirc) and in the declaration all of the commissioners were patting themselves on the back and saying what a huge win it was for consumers.
Now, 4 years later, the government is having to look at regulating set top boxes in general so that consumers can actually have choices, own the equipment in their home, and not be locked to a provider.
Welcome to the somewhat repetitive slippery-slope fallacy.
You argue like market-based solution are not subject to the darker side of human nature, when, in fact, the conflict of interest, especially in a natural oligopoly like terrestrial internet, is one of it's fundamental pillars.
It's yet another argument that insists on ignoring the existence of the Tragedy of the Commons phenomenon. It's just invalid to argue that regulation is never necessary.
Well said. This is why I'm surprised the US hasn't gone the route that both Canada and the UK have: have regulators force ISPs to share lines. This method basically allows government hands only on the minimum required to enforce competition.
In a few years with this system in Canada I saw basically a 10x speed increase at very close prices and real competition over which ISP I'd go with.
I think this is a far better compromise, allow the market to do its job, just use minimal regulation to force the market to actually exist.
The US did go down that route, in 1996. The FCC decided that only applied to telephone operators and not cable operators; then the telephone operators complained it wasn't fair, and eventually it didn't apply to anything.
There were issues with implementation as well, AT&T* would commonly offer lower prices to consumers directly through wholesaling; which makes it pretty hard to compete
That said, I would prefer a return to the mandatory access regime as well.
For all of the bumps and warts of the Telecommunications Act of 1996, as a consumer I remember the era fondly. My personal Internet connectivity improved more significantly (in terms of percentage improvement over time) in that era than it has since. Since that regime was dismantled, innovation in Internet connectivity has seemed far more stagnant and difficult for upstart companies to disrupt. It is a bit disappointing that we have elected to go down the path we have rather than revisit the model from 1996.
Not sure why this is being downvoted; it's pretty much the straightforward truth of what happened. The US had Local Loop Unbundling for copper phone circuits from 1996 to 2005. In 2005 under Kevin Martin, who was a political appointee under G.W. Bush and widely understood to be a friend to the ILECs, the FCC stopped defending the policy and basically gutted it through rulemaking. They could have done then what the FCC is doing now, and either threatened or actually moved forward with reclassification, but decided not to for what were pretty clearly political reasons.
These issues are, very obviously, political; anyone claiming otherwise is either being deceitful or deeply in denial.
> How we got to the point where utility-style regulation is seen as the key to ensuring a free and open internet is a true puzzle.
The answer is not that much of a puzzle. Is very hard to dig water pipes, draw power lines, copper, and fiber without direct cooperation with of the government. Every single utility provider more or less exist because they had cooperation with government, and any current monopoly status is a product of that. Governments, be that US or any other nation, has a responsibility to limit the harm from such monopolies. They created the mess so they got to clean it up.
Personally, I would have preferred if the state created monopolies could be out-competed by deregulation of "good" radio frequencies, thus allowing for cheap nationwide wireless ISPs, but the furthest we got with that is the mobile networks and its arguable if it can be said to compete with the last mile monopolies and fiber networks. Speed, latency and coverage being difficult problems to solve with current technology and frequencies regulation.
>Tomorrow maybe it is price controls in the name of consumer fairness.
It's not clear that's a bad thing, or that it's a worse state of affairs than the fast lane/slow lane rent-extraction schemes the telecoms clearly want. Cornering markets (be they capital, IP/copyright, infrastructure, etc) and extracting rent is a primary strategy of multinational corporations these days, and as wealth is increasingly concentrated into their hands, that is an increasingly viable strategy. The telecoms are working toward exactly this with the Internet.
>Or maybe it is mandated compliance with government snooping orders in the name of national security.
The telecoms running the internet have already brought us that [1]. Net neutrality is orthogonal to that problem.
>It might just work great as long as the good guys are in control. But what happens when it changes some day? And, if you think it cannot, then you have far, far more faith in human nature than I can possibly summon.
You seem to have far more faith in multinational corporate control of national economic infrastructure and the reliability of self-regulation via market forces than I can summon, especially in light of the continuous failures of both of those ideas in recent years - Enron/CA electrical infrastructure, GFC, IP/copyright, patent trolls, etc.
Hard to quantify the following assertion, but many concerned citizens sense the US government is still more accountable to citizens than large corporations are nowadays. The success of the crowd campaign for Net Neutrality is evidence, if not proof, of that. If there's a lesser of two evils here, it's FCC net neutrality rules, not a "free market" for what appears to be an unaccountable oligopoly-owned natural monopoly.
> How we got to the point where utility-style regulation is seen as the key to ensuring a free and open internet is a true puzzle.
It's not even vaguely a puzzle. There used to be a vibrant ISP market. Large existing companies destroyed it. The best case for most Americans is oligopoly; for many, there's effectively a monopoly.
Utility-style regulation is not as good as a vibrant market. But it's a lot better than monopolists stifling innovation and extracting monopoly rents.
"This is the exact antithesis of the largely hands-off idea of what the government could do with respect to the internet over the past several decades."
And the ISPs showed us why that's a terrible idea. Remember, no one was talking about net neutrality until the big ISPs decided they wanted to fuck with the internet.
> How we got to the point where utility-style regulation is seen as the key to ensuring a free and open internet is a true puzzle.
By not preventing monopolization of the ISP market. It might be a natural monopoly, in such case getting to such point is something to be expected. Monopoly must be regulated. You should better ask, why we got there only now, ignoring various monopolistic abuses before.
Internet access is provided by cable and phone companies. Those companies are utility companies. They have government sponsored monopolies. It was inevitable that the internet access the utility companies provide would eventually see utility-style regulation.
Net neutrality sucks. It's a shit solution. The real solution is ISP competition. If consumers were able to choose from a dozen competing ISPs then net neutrality and all this regulation wouldn't be necessary.
The true puzzle is how do we enable ISP competition. It's not easy. But it's true solution.
I don't think many people realize just how difficult it is to start an ISP and compete. I started an ISP late last year (Shameless plug: https://nepafiber.com ), and I have a new found respect for ISP's. Don't get me wrong, I think most of them do an extremely shitty job at what they do. But starting one requires enormous sums of money. Furthermore, even though we hit profitability after our 4th month in business, raising money has extremely difficult because no one thinks we can weather the storm given how large and powerful other telecoms are.
If you're referring to DSL/Dial Up companies, the infrastructure was already in place for that. Phone lines have been around for decades. Anyone can start a DSL/dial up company, but what good is that? The technology is outdated.
To be competitive in today's market you need to be running fiber. Depending on where you're located, fiber is scarce and running it isn't cheap.
No. It always took lots of money. Maybe not for dial-up, but otherwise it's always taken a lot of equipment, not to mention the tearing up of the roads to lay down lines.
DSL uses, in most cases, the same copper phone lines as dial-up. So unless you're deploying a cable network (which has multiple revenue streams if you're selling TV, thus a higher market penetration rate) or a fiber network, there's no need to dig up roads or lay your own lines.
Yeah, the equipment was probably expensive, but compared to what? Laying your own infrastructure? Not even close.
I suspect that you're already aware of this, given that you run an ISP, but for those who are not familiar ... the reason that there was a proliferation of DSL-based ISPs in the late 90s and early 2000s, such that for a brief moment there was actual competition in the broadband market (in some areas), was due to utility-style regulation by the FCC. Specifically it was called "local loop unbundling" and it required that the incumbent phone system operators lease "local loops" (the copper that runs to your house) out to independent operators at reasonable-and-non-discriminatory rates.
This regulation was undone under the Bush administration and most of the independent DSL operators died shortly thereafter, leaving consumers with a choice between the incumbent telephone company and the incumbent cable company, in most cases, for broadband.
In short, when the market was regulated, there was competition and consumer choice. When the regulation was removed in response to industry lobbying efforts, consumer choice disappeared.
I'm not sure if you know the answer to this or not, but how did they deal with capacity? Were you leasing the line or were you just leasing X capacity? I think that's the biggest issue with cable companies right now. Most of their infrastructure can't handle the amount of data they're trying to pipe through it, so I would think regulating it would only saturate it more.
It requires enormous sums of money to start. But it is also enormously profitable. Time Warner has a profit margin of 97% on their ISP business. Which sounds about right.
When profit margins are that high capital finds a way. What capital can't do is chop through red tape, burdensome regulation, and noncompetitive system.
Your investors aren't crazy. You challenge titans! But your difficulty isn't going to be technical. It's going to be those titans doing everything in their (significant) power to stop competition. They want to protect their 97% margin after all!
Yes, it's extremely profitable after X years (after the infrastructure is all paid off), but lowering those profit margins would only make it more difficult for new players to enter the market. If profit margins weren't high, it would essentially be impossible to recoup that initial capital expenditure.
Aside from that, if you're anything like us, you will be reinvesting those profits into expanding and growing your network.
Time Warner has those levels of profit margin because they largely have no competition, so they can charge as much as they can squeeze from people. Cover their territory with 3 other, competitive ISPs, and watch that margin number drop.
Is enabling competition in fact the puzzle, though? This is a problem that's been studied intensively for well over a hundred years and solved in lots of other places. It's the same problem as power regulation, water regulation, closed-circuit television regulation, and so on. I don't think the problem is finding a solution at all. I think the problem is convincing citizens that adopting the solutions implemented elsewhere (e.g. decoupling infrastructure from service, community-owned utilities, etc) is a thing worth supporting.
You know what? I don't care. Electric companies are regulated the same way, and we all have the freedom to use our electrical devices how we want.
And you say "price controls" like that's a bad thing. It's not. Honestly, I wouldn't even be opposed to the federal government just nationalizing every ISP and carrier in the country.
You do understand that Venezuela has had a mix of problems, do you not? And that the US is no where near going down that same road. At most, the US could hope for a Nordic Model of socialism, and probably be better off for it.
This sophomoric understanding and attitude is mind boggling.
So your argument is "...but guys why would we want a utility to be treated like a utility!?"
You're entire premise is based around the idea that this regulation is fine because the "good guys" are in charge but what happens when "bad guys" are in charge. There for the only reasonable system is to limit the potential power of the "bad guys" by limiting effectiveness of government to a practically nonexistent state.
Well guess what, "bad guys" don't magically limit themselves to government.
(For the record here I'm defining "bad guys" as individuals, groups of individuals or organizations that would freely and willingly negatively affect the welfare of large groups of people for their own benefit. This could mean direct monetary gain, indirect gains from those that directly received them, societal gains, ideological or psychological gains from the feeling of imposing your will and views on others, etc. etc.)
It doesn't matter if we're talking about politics, commerce, religion, whatever. People like that are drawn to ANY institution that gives them the opportunity to advance their own interests. Hell we all do it to some degree. Some of us are obviously worse than others in both degree and extent.
The reason this regulation came about is many see the internet as a utility of great public interest. Meaning widespread, reliable, easy and cheap access to it has the potential of accelerating the growth and prosperity of our society and species as a whole. I hop I don't have to explain to you have worse off we would be without water, electricity, sewage and telephones being treated as public utilities.
In this instance that "bad guys" slithered their way not into the government side of the equation, but into business side. One of the only methods of countering "bad guys" in the market is classic free market principles. Free competition would mean "good guys" are able to enter the market and naturally drive the "bad guys" out. Invisible hand and all that jazz.
Reality does not often work like that though. It's far more complex. By using tactics to reduce competition such as buying up competitors or forcing them out of business, [mostly indirect] collusion to split up geographic markets, creating artificial barriers to entry, influencing regulation to prevent communities helping themselves, etc, they were able to carve out a pretty comfortable little position for themselves in the economy. That's not even mentioning the fact that even without all that some markets are inherently resistant to free market forces thanks to natural barriers to entry such as the the sheer difficulty and cost of laying physical lines.
Now these "bad guys" (note: obviously some excellent [mostly smaller] ISPs remain) are set up in a position to adversely affect the very prosperity of our society increasingly dependent on access to information and communication. I.e. fuck your start up and your ability to reach potential new customers because you're not peered with our "Lead Generation Package™", fuck your farm and any hope you had of learning new techniques because that site can only be reached with "Access Plus™" package, fuck xyz but please enjoy our own content network for Free™. Fuck you and whatever economic influence we might be having on your lives or businesses. Instead we're going to do all this mostly so you watch more of OUR TV SHOWS and ADVERTISEMENTS.
If i didn't find it so disturbing I would find it hilarious you used Brave New World in your argument AGAINST these regulations.
These regulation are important because with some things it doesn't matter who says them.
"DON'T FUCK WITH OUR PROSPERITY BUT FUCKING WITH PEOPLES ABILITY TO SHARE IDEAS AND INFORMATION"
That's what it comes down to and it's pretty simple.
After all if Hitler himself said "do not eat babies" you wouldn't throw your hands up in response "well looks like we need to ban any future possibility of anti baby eating rules if HITLER can say not to eat them."
If the FCC actually starts doing things you're talking THEN lets talk. It's a good thing we live in a system that lets us do that it's it?
The idea that there's some "magic bullet" that can limit the "bad guys" indefinitely is frankly juvenile at best. The idea that that "magic bullet" is limiting regulatory powers to non-existent is fucking absurd, "because "bad guys" only choose to slim their way into government" right?
The fact of the matter is the only thing that can stop "bad guys" is "good guys" having constant vigilance and a system of checks and balances that enables them to do something about it. In this case the voice of the "good guys" is being heard through sound public policy checking and balancing the power of large incumbent businesses.
Have we considered crafting an agency as an information infrastructure policy steward, with the explicit intent to prohibit and prosecute any local and state regulations which would harm the proliferation of information infrastructure.
Probably this is not the FCC since its mandate is too broad. But if some such agency had the ability to force municipalities to allow private infrastructure investment, we might start to get the internet we want pretty quickly.
I read an argument once for nationalizing Internet infrastructure under the auspices of the US Postal Service (which is a constitutionally-mandated public utility), as the Internet serves the same public good as the post did for hundreds of years (and arguably still does). It was an audacious proposal, obviously, but I thought the idea was intriguing.
Utility-style regulation gives regulators plenary authority over the internet - meaning full and complete. Their power to do this or to forbid that is highly discretionary and essentially boundless.
This in turn gives a gatekeeper role to the regulators: you play by their rules or you don't play. And that means they have final say over what happens across the internet, at least within U.S. jurisdiction.
So today they say net neutrality rules.
Tomorrow maybe it is price controls in the name of consumer fairness. Or maybe it is mandated compliance with government snooping orders in the name of national security. Or who knows what not?
Why not? With a utility-style regulatory framework, you essentially have a form of administrative law run wild, legally speaking. Standards are exceedingly vague, power is wildly broad, and (in the end) he who has the most power and pull to control the regulators winds up having the final say over what the law is or is not as it affects the internet.
This is the exact antithesis of the largely hands-off idea of what the government could do with respect to the internet over the past several decades.
Of course law tends to conform in the short term to what people want and, today, most people truly do want a free and open internet. Therefore, the risk of any existential threat to internet freedom is either minimal or non-existent in the short term.
But if your idea of preserving maximum internet freedom is in effect to place a loaded gun to its head and then declare it is not a problem because it is the good guys who control it and who therefore will use it only for good purposes, then you have what you want with utility-style regulation of the internet.
It might just work great as long as the good guys are in control. But what happens when it changes some day? And, if you think it cannot, then you have far, far more faith in human nature than I can possibly summon.
Welcome to the brave new world.