My good friend Chuck Papageorgiou recently wrote a post on his blog he titled Net Neutrality – Policies or Politics in which he argued:
… as a capitalist and free-marketer, I have a hard time reconciling the notion that the Government should just take over privately deployed and owned assets without fairly compensating the TelCo’s and their shareholders for the investment they have made, and continue to make, in internet infrastructure.
Despite the fact that yesterday was Chuck’s birthday I’m going to disagree strongly with my friend.
First, Net Neutrality doesn’t mean that the government is taking over anything. The core idea of Net Neutrality is not takeover but regulation. When something becomes as crucial to the economic health of our culture as the Internet has, it has moved from being a nice thing to have (like satellite TV) to being critical infrastructure (like the interstate highway system). Regulation is a method for curbing any behavior that wouldn’t be in the public interest. We regulate many other services and businesses that are considered to be in the public interest such as food service, insurance, and healthcare so why not the Internet?
The problem is that until lawyers got involved, corporate status was only granted for businesses that were for the public good (water supply, grain elevators, and so on; see The Corporation for a great discussion) and even then the shareholders were jointly and severally liable for the corporation’s debts as opposed to today’s legal landscape where shareholder liability is limited to the extent of their investment. This means the primary goal of all large corporations today is to make profit with anything that counts as the public interest coming a poor second at best. When something becomes as foundational to our society as the Internet has become, the government has to be ready and willing to ensure that the public interest is served.
Second, as President Obama once said: “If you’ve been successful, you didn’t get there on your own.” In the case of the major Internet Service Providers this is very much the case. Their market dominance was achieved by striking deals with local governments across the US that should be considered monopolistic. They carved up municipalities and minimized competition with deals that should never have been allowed and the FCC’s failure to designate them as common carriers was a huge mistake. The fact that these ISPs were there first and gained huge commercial advantage doesn’t mean that they should be able to reap an endless windfall at the expense of consumers.
In short, Net Neutrality is about ensuring that the public interest is served rather than letting corporate interest serve itself. The breakup of Ma Bell was done for much the same reasons as Net Neutrality but with Net Neutrality no one is proposing anything remotely similar; we’re merely asking for a few constraints to prevent monopolistic behavior.
The only way we can have a vibrant, internationally competitive culture in America is to recognize that the Internet and the flow of information it enables is now critical cultural and commercial infrastructure. Want to weaken the US’s economic opportunities and competitiveness? Just let the misguided and “under-informed” (I’m looking at you, Ted Cruz) take charge and leave the ISPs to run the show as they please.
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