by Georgi Boorman • The Federalist
Could you bear to live in a world where parts of the Internet might be bundled and sold to you monthly in the form of subscriptions? Apparently, some people can’t. A representative from California shared this graphic on social media, supposedly to demonstrate how terrible lifting net neutrality would be. To me, it demonstrates the exact opposite.
If you add up the subscriptions, the “no net neutrality” model costs 4 cents less. Either Rep. Ro Khanna’s staff is really bad at math or potentially providing the Internet to consumers differently is so horrible we wouldn’t want it even if it cost less.
It’s pretty sad that supporters of “rule by desks” don’t hesitate to dump bureaucratic sludge all over any new good ideas that might take shape in a free market. As Federal Communications Commission Chairman Ajit Pai, who supports overturning so-called net neutrality, told Reason in an interview: “It’s telling that the first investigations that the prior FCC initiated under these so-called Net Neutrality rules were involving free data offerings…To me it’s just absurd to say that the government should stand in the way of consumers who want to get, and companies that want to provide, free data.”
Letting Business Evolve Freely Makes Stuff Better Faster
The FCC under the Obama administration seemed to assume that “the more things change, the more we should force them to stay the same.” But the new and improved gadgetry we’ve grown accustomed to over the past couple decades has accompanied business models almost as innovative as the technology itself. We have “freemium” models for software, a dozen monetization strategies for websites, ride-hailing apps with experimental pricing algorithms, subscription-based video streaming services, and tons more creative ways to connect users and providers.
Business is constantly evolving along with our technology to serve our varied interests. So why would we treat Internet service providers (ISPs) any differently than providers of other goods and services? Why stifle innovation by shoving them into the categorical box of “utility,” snapping the lid shut, and then sitting on it? Yet despite hardly any evidence of blocking or throttling by any ISPs, the FCC under direction from the Obama administration chose to impose Title II of the Communications Act of 1934 (last updated in ‘96) on ISPs.
Pai notes that 80 percent of fixed wireless providers have “held back on investing” in infrastructure because of these rules. While new tech may increase speeds and sites will continue to evolve, government has effectively frozen in place the way Internet is packaged and paid for. That can only serve the interests of the well-established players.
If you really want a “free and open” Internet, you need to let the ISP market be “free and open.” Free and open markets get consumers more of what they want. It’s the equivalent of saying, back in 2009, that you wanted to keep a “free and open” transit industry by ensuring only medallioned taxis could offer the service of driving an individual from point A to point B. It’s like saying you want “free and open” cable by ensuring there’s only one channel package available: all of them, or nothing.
Lots of People Want Unbundled Services
Do most people want all of the channels, or just RedZone and the major sports networks? Or what if some just want HBO? That’s subscription-based. Doesn’t sound “free and open” to me. Shouldn’t you be getting that in your all-or-nothing cable bundle? How ridiculous that you be able to add HBOGo to your bills for three months then cancel the subscription in the off-season of “Game of Thrones.” Someone, get the FCC on this.
Or imagine a scenario in which all apps had to be sold the same way: all the bells and whistles with no ads, or nothing. There’d be a lot of consumers with few to zero of those nifty apps we all now take for granted. How many free services do you have access to now that you would never have paid for if they were required to run under net neutrality-style rules? Flexibility in pricing and packaging makes this possible.
The immense pressure from a populace that wants everything free, or close to it, does a pretty good job of keeping a lot of things available to us at low prices or even free. Yet the downside of this is our susceptibility to propaganda that tells us something we currently perceive as “free,” or as a right, might now have to be paid for out of pocket. “What do you mean, my ISP might someday charge me for a ‘social media’ bundle?” we think to ourselves. “I deserve access to this via my all-inclusive ‘free and open internet’ package.”
Yet we’re all already used to this in other communications sectors. Consider how cell companies often unbundle phone services such as text, calls, and data. This provides discounts to people based on their personal usage, rather than requiring them to fit into predetermined boxes that approximate the “average” user.
We like to think that we’re on board with technology constantly changing and evolving because we know it has improved our lives in many ways. But the truth is, we’re scared of change if we can’t immediately see the direct benefit to ourselves. The fact that Echo Dot is available for purchase makes us excited. How useful! But the idea that the way we buy and consume Internet might change? That makes us little uncomfortable.
Yet the allowance for paid prioritization (what net neutrality advocates scare-quote as “fast lanes”) could mean faster streaming of video content. It could also mean that some of the overhead your ISP could have billed you for can now be put on media giants like Netflix, Hulu, and YouPorn (which apparently streams six times the bandwidth of Hulu). Doesn’t it make sense that ISPs be allowed to charge more to sites that take up more bandwidth and rely more heavily on faster speeds?
Don’t Like Comcast? Support a Competitive Market
True, it’s hard to find a market reason to justify Comcast’s “data caps” and overage fees when the cost of transferring data is actually pretty low, and it’s true that major ISPs charge ridiculous profit margins. But when customers are getting fleeced, that’s almost always a sign of an uncompetitive market (often promoted by local governments), not a lack of regulation.
Not to mention, we have net neutrality now, and it’s not helping. Allowing paid prioritization agreements and perhaps even Internet “bundles” that may include “blocking” some sites or types of sites (just like different channels are blocked depending on your cable package) will give smaller ISPs another level on which to compete with Comcast and other giant ISPs.
Pai had it right when he said net neutrality “is a solution that doesn’t work to a problem that doesn’t exist.” It’s been harder for small ISPs to invest and expand under net neutrality the past two years. This set of policies hasn’t done anything to break up the pseudo-monopolies of Comcast and other Big Evil Corporations.
As Pai said on the Federalist Radio Hour, “These regulations have a disproportionate effect on the smaller ISPs – the fixed wireless providers in rural Kansas, even the fiber providers in big cities. Ironically enough, the companies we want to provide a competitive alternative to the incumbents are the ones most harmed by these regulations.”
Under our current system, the giant telecom companies might be able to dominate the industry with terrible customer service, mediocre speeds, high prices, and opaque contracts forever. Do you really want that? Of course you don’t. You want choice. So for progress’ sake, stop whining about net neutrality and get excited that providers could start offering you more of it.