California Conservative

In an email exchange with a journalist who covers the net neutrality debate, I was asked whether we should treat the Internet similarly to the highway system or the original phone system. Using these common-carrier (“utility”) models, one could argue for both government regulation and direct government investment in broadband rollout. My response:

I will put a stake in the ground about legislating for the future, not for the past. [...]

It seems to me that most of the complaints about the current market, as well as the motivation in ‘96, are based on scarcity [or] lack of competition [...]

What is different now than when, say, the highways or the copper phone system were built, is that today the barriers to entry are much lower. [...]

A long time ago, perhaps only the federal government could build a large national infrastructure. I really don’t see that being the case with bandwidth, and the burdens that come with a utility model should be avoided.

No sooner had I said that — well, OK it was yesterday — that we are presented with new evidence of healthy broadband expansion in the US.

News.com offers some new figures for fiber deployment, with over 600,000 new subscribers and 4 million homes with fiber available (the industry parlance is “homes passed”).

To help rural and low-density areas, California is sanctioning new testing for broadband over power lines.

Shall we continue? Om Malik summarizes: AT&T ups its DSL speed and adds half a million customers since the beginning of this year; Comcast adds a similar number. Add in SBC and that’s one million new broadband subscribers in last three months.

The net neutrality proponents argue that the network providers can’t simply be trusted to look out for the best interests of their customers. What these advocates need to understand that that is true for any business, from supermarkets to cars to PCs, and it has been so since the beginning of time. Every corporation is and has always been greedy.

History has made clear that the only truly progressive and permanent way of protecting consumers is to allow a competitive market to freely develop. Regulated markets — think California utilities — have little incentive to improve their infrastructure. When demand peaks, we end up with scarcity (rolling blackouts) or bad service (PG&E once asked me to wait at my house for 8 hours until they could probe a gas leak).

As Mark Cuban has pointed out, scarcity on the Internet is coming unless the network providers are rewarded, in innovative ways, for building big new bandwidth. We tend to think it’s an infinite resource, but it’s not. It is our imaginations that are infinite — let’s allow the network to keep pace.

Back in the day, say the mid-80’s, it could be said that we had a monopoly situation in the communications market, which consisted mostly of copper wires. Those days are long gone, as “communications” has exploded, both in the number of competitors and the variety of their offerings.

It’s blooming right now, folks. Let’s not get in the way.

UPDATE: (5/17)
John Hawkins: “On Net Neutrality”

RELATED:
Net Neutrality: A Primer for Conservatives

Cross-posted at The Only Republican in San Francisco

This entry was posted on Monday, May 1st, 2006 at 9:30 am and is filed under 1st Amendment, Author: Matt S., Capitalism, FCC, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.