The Invisible Homepage of Economics

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Via Boingboing: This is how the world ends, not with a bang, but with a sneaky, whimpering attempt at a New World Order.

At least that's the vibe coming from proponents of net neutrality, who have been piqued by the British government's proposed amendments to the European Union's Regulatory Framework for Electronic Communications (that's net neutrality in shorthand). The E.U. will consider those later this month. From IPtegrity.com:

The amendments, if carried, would reverse the principle of end-to-end connectivity which has underpinned not only the Internet, but also European telecommunications policy, to date.

… it is not only restricting the subscriber who is paying for the service. The effect will be that it renders invisible the millions of other websites that are not on the 'just a few' list.

Net neutrality proponents are worried about information superhighway robbery, saying the amendments are in direct conflict with the European Charter of Fundamental Rights, which gives everyone the right "to receive and impart information and ideas without interference by public authority and regardless of frontiers." 

As for British officials, they're echoing the line made by some telecommunications companies and their henchmen, saying that Internet service providers (ISPs) should be able to control users' access in the same way cable television stations deal with their subscribers. The ISPs also say they want to be able to balance supply and demand through traffic management—which is one way to put the reins on a cyber-crazed downloaders.

Confused? You're not alone. As Reason.tv and Reason.com Editor in Chief Nick Gillespie notes: "Is there any debate that gets things more fundamentally ass-backwards than the current battle over 'net neutrality'"?

In a nanobyte, net neuters want everything to be open, available, and free. ISPs want to be able to charge for their services. Who's to say we can't have it both ways?

Oh. Right. The European Commission. Here's a headline from the Commission's website:

EU Telecoms Reform—One Market for Consumers

Ummm, why does that sound so ominous?

Proponents of net neutrality are barking up the wrong blog post if they want a free and open Internet. They're asking the E.U. to prevent businesses from becoming the Internet's supreme rulers. But for an unrestricted, unregulated web that accommodates individual needs and quirks, a giant governing body is the last group one should appeal to.

new world order

Net neuters are worried about abuses by ISPs. But as Reason contributor Julian Sanchez argued in 2006, "hasty regulation that responds to hypothetical abuses may also prevent us from discovering benefits we haven't yet hypothesized."

Net neuters can surf easy, too, knowing they'll still be able to get free shit. Pirate sites pop up all the time, and if the newspaper industry is any indication, not every ISP will be able to convince users that their stuff is worth a Paypal dime.

The best thing for all the parties involved would be to leave the Internet to those who know what they're doing, namely, individuals.

Two E.U. committees will vote on the proposed legislation on March 31 before it goes to the European Parliament on April 22.

For more Reason coverage of net neutrality, try this link (for free!).

NEXT: Northern Ireland's Fragile Peace

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  1. As for British officials, they’re echoing the line made by some telecommunications companies and their henchmen, saying that Internet service providers (ISPs) should be able to control users’ access in the same way cable television stations deal with their subscribers.

    This line right there should indicate that having a non-neutral net is a bad idea.

    You know what’s great about the internet. That it is nothing like Cable and Radio. That it isn’t centrally controlled and that you don’t need to have critical mass to be able to have your shit seen by anyone who might be interested.

    ISP’s can go fuck themseleves.

  2. Hrer’s a cause for economic / Church v. State concern.

    Minn. State Agency Offers Islamic Mortgages

    MINNEAPOLIS (AP) ?
    Islamic law does make exceptions to the ban on interest, if one’s family is at stake. But the exceptions are open to interpretation and for many observant Muslims, conventional mortgages are strictly taboo.
    For many Minnesota Muslims, it’s been virtually impossible to buy a home, because Islamic law forbids the paying or charging of interest. To help close the home ownership gap among Muslim immigrants, the state’s housing agency has launched a new program offering Islamic mortgages.

    Islamic law does make exceptions to the ban on interest, if one’s family is at stake. But the exceptions are open to interpretation and for many observant Muslims, conventional mortgages are strictly taboo.

    Nawawi Sheikh is one of them. The Somali-American said he and his wife just couldn’t go against their beliefs, even if it meant giving up their dream of owning a home. Still, he grew tired of moving from one rented apartment to another.

    “One thing I hated was moving. I don’t like to move all the time,” he said.

    He has no plans to move again anytime soon. Sheikh is the first home buyer to get a loan through the state’s New Markets Mortgage Program. That’s because, program manager Nimo Farah said, he has all the makings of a successful homeowner.

    “I had lots of applications, but he’s the first one, because really, he was ready. He has been working at the same job for quite a while; he took care of his credit; he had the right size family, and he had all his documents together,” she said. “He was basically ready to go.”

    The program is targeted at low-to-moderate income families. Qualified applicants have to complete first-time home buyer education classes. The goal is to help Muslim home buyers build wealth and reap the benefits of home ownership.

    Here’s how the mortgage, known as Murabaha financing or “cost plus sale,” works:

    The state buys a home and resells it to the buyer at a higher price. The down payment and monthly installments are agreed to up front at current mortgage rates.

    The deal is identical to a thirty-year fixed-rate loan, except there’s no additional interest, because the higher up front price factors in payments that would have been made over the life of a traditional mortgage.

    A handful of private banks and lending institutions offer Islamic mortgages in the U.S., but Minnesota Housing is the first state agency to offer such a product. The program is the brainchild of Hussein Samatar, director of the African Development Center in Minneapolis.

    “The process is different, but the outcome will look the same,” Samatar said. “We wanted to be as conventional as possible, while respecting the tenets of Islam.”

    Samatar, who used to work for Wells Fargo, tried for years to launch Islamic financing. He said the fact that Minnesota Housing has agreed to participate is a nod to the Muslim community’s growing economic power.

    Chicago-based Devon Bank is underwriting the loans for the New Markets program. Devon is one of the largest Islamic lenders in the country. Corporate Counsel David Loundy said he expects the demand for Islamic financing to grow as more Muslims make their home in the U.S. Loundy said Muslims tend to be good risks.

    “If they worked so hard to get to this country, they don’t want to screw it up now that they are here, so they tend to pay their debts pretty promptly,” said Loundy. “In addition, you have a population that is religiously and culturally predisposed against having debt, so they want to pay down their debts as quickly as they can.”

    The numbers back this up. In its five and a half years offering Islamic lending, Loundy said Devon Bank hasn’t lost a penny, though he admits the recession could make that record difficult to sustain as more borrowers face job loss.

    But the bad economy is also offering opportunity. With housing prices at rock bottom, officials say the timing couldn’t be better to match first time Muslim buyers with foreclosures that need new owners.

    Nawawi Sheikh’s new three-bedroom south Minneapolis home is a former foreclosure. The African Development Center’s Hussein Samatar said there are thousands more potential buyers like Sheikh out there. He said the New Markets Mortgage Program will help the Minnesota Muslims community put down strong roots.

    “It is great news for the country, and it really sends a great signal that the United States is our country,” he said, “and we would love to make it better.”

    Samatar said he has 10 more qualified buyers already lined up. He plans to close on two or three more homes with Islamic financing over the next few months.

    http://wcco.com/local/islamic.mortgages.minnesota.2.952805.html

  3. “In a nanobyte, net neuters want everything to be open, available, and free.”

    That’s a stinking pile of crap.

    Net Neutrality wants network providers to act as a common carrier and treat all packets the same. Network providers still can charge, they can still tier service- based on consumption, not variety, of traffic.

    A non-neutral network would allow network providers to hold certain kinds of traffic ransom. “Hrm, VOIP traffic competes with our lucrative telephone business. Let’s shunt those packets off into a low speed lane. Streaming video bogs down our network, but hey- that’s okay, we’ll just make content providers pay a massive fee for the privilege of providing video. Oh! But they could tunnel the traffic via SSH. Well, we’ll just ban SSH traffic entirely. Since only a minority of users knowingly do this, it won’t impact most people, and nobody cares what nerds think anyway. And if it stifles innovation? Well, we’re a telco. Stifling innovation is our primary business.”

  4. The NN people biggest issue is they want the government to step in and make it fair. We all know how that will end up. Once they have control over what goes on the pipes then they will want to control what people can see.

    I would be more in favor of the ISPs just want to make a profit if being an ISP was something that anyone with money could do. Face it if you had a ton of money and wanted to start your own ISP you would run in a brick wall.

    The top cable and phone companies have local and the fed in their pocket. Even google would loose trying to go against them.

  5. “Let it be clear from the outset that the telcos are putting their case for being allowed to do these things with breathtaking hypocrisy. They honk about how awful it is that regulation keeps them from setting their own terms, blithely ignoring the fact that their last-mile monopoly is entirely a creature of regulation. In effect, Theodor Vail and the old Bell System bribed the Feds to steal the last mile out from under the public’s nose between 1878 and 1920; the wireline telcos have been squatting on that unnatural monopoly ever since as if they actually had some legitimate property right to it.”

    Full article

  6. I read the wording of the “amendments” link. All it really said was that there should be “transparency of conditions” for users about how the service is provided and about the company’s “traffic management” policies.

    It sounds like a full disclosure and informed consent thing to me. That doesn’t sound so bad. Is there more to the proposal than what Winkler links to?

  7. Net Neutrality wants network providers to act as a common carrier and treat all packets the same. Network providers still can charge, they can still tier service- based on consumption, not variety, of traffic.

    Well, some people think so. OTOH, I have had people who favor net neutrality argue that under their vision, net neutrality also means that ISPs should not even be able to rate limit and charge different prices for different speed tiers.

    “Net neutrality,” like a lot of other catch all terms (such as “judicial activism” and “smart growth”) end up being used to mean different things, sometimes even contradictory things.

    A non-neutral network would allow network providers to hold certain kinds of traffic ransom.

    Q: What Akami does— does it violate net neutrality?

  8. The NN people biggest issue is they want the government to step in and make it fair. We all know how that will end up. Once they have control over what goes on the pipes then they will want to control what people can see.

    Don’t like it? No? The go out and build your own goddamn network to the cloud.

    What’s that? It costs billions of dollars of private investment and you don’t have that on you right now? Bummer.

    Let’s be clear about something: these lines that net neutrality proponents like to think they own are a product of investment by the telcos and cable companies over the years. They aren’t public roads and never will be.

    Now the point of how these companies have come to be in such a dominant position is a valid one. To be honest, I really don’t know what the voice/data networks would look like without the monopoly status they held for so many years. It might be light years better, it might be a shambles.

    A better solution would be to get rid of the artificial market restrictions that federal, state and local guvmints have created through granting exclusive franchises to telecos and cable companies. I’d love to have 10 companies competing for my money. If one company throttles torrents, but another doesn’t all you have to do is change service. That’s how markets work.

    I’m “fortunate” enough to have 2 (count ’em, 2!) companies to choose from: Comcast and Verizon. I had Comcast for years and yes, they suck. They stopped competing for my dollars a looooong time ago, since they had no competition.

    Verizon is building out their fiber network and my neighborhood was one of the first to get FiOS. It’s outstanding, especially compared to Comcast. I don’t regret getting it one bit. How will it be in a few more years? Will Verizon still compete for my dollars? Dunno, but it’s solid for now.

  9. In other news, I’ve finally gone completely, irreversibly, insane.

  10. Argh, grabbed the wrong quote I was responding to. The correct quote is:

    That’s a stinking pile of crap.

    Net Neutrality wants network providers to act as a common carrier and treat all packets the same. Network providers still can charge, they can still tier service- based on consumption, not variety, of traffic.

  11. Net Neutrality is a great issue for upseting libertarian dogma.

    Everyone here likes the internet. I mean, your on it.

    So how would you like it if suddenly your internet service would slow down to service to dial up because you can’t pay a premium?

    Would you, with your own interests being frustrated, fall upon your knees and say “Oh Market Lord, I accept your punishment as Just as Jonah did! Your Ways Are Always Wise!”

    Because once these guys can fuck you for a fee they are going to stick it in as deep and as far and as frequently as a nympho at a KY convention…

  12. “The best thing for all the parties involved would be to leave the Internet to those who know what they’re doing, namely, individuals. ”

    Nonsense. If net neutrality is abandoned, these decisions will be made by the biggest ISPs and their telecom parents.

  13. I bet the Market will just work all this out.

    You know, how when movie theaters started showing all those annoying commercials? And people said “well, folks will just stop going to those theaters and they will learn their wrong ways courtesy of the Magical Mystical Market, which respects and helps the wishes of the Consumer, beloved of The Market.”

    But guess what.

    Been to a movie lately?

    Bend over consumer!

  14. “Hrer’s a cause for economic / Church v. State concern.”

    OMG TEH MUSLIMZ!

    They’re 1% of our population but SHALL RULE US ALL!

    IM TERRIFIED d00d. What should I do about the BrownHordes?

  15. So because you have to watch commercials before a movie or sometimes during previews, then that is the equivalent of getting sodomized as a consumer?

  16. But zoltan, since about 90% of consumers of movies would complain about the commercials, then CERTAINLY the MAGICAL MYSTICAL MARKET would never allow a producer who treats the majority of consumers so badly (who gives a shit what you want to watch, buddy, I get paid for thems commercials) to thrive…

    Yeah.

    The bend over was, er, a figurative reference…I didn’t mean the movie owners literally fucked you in the ass (what movie theater do you go to?)

  17. The best thing for all the parties involved would be to leave the Internet to those who know what they’re doing, namely, individuals.

    Thank you, Jeff, for capitalizing “Internet”. The Internet is the proper name for the most popular set of communication protocols that allow computers to talk to each other. It’s not IPX, it’s not DECNET, it’s not anything else. It is what it is. The Internet.

  18. Movie theaters
    Market Defenders: “Don’t worry about these guys showing those annoying commercials that everyone hates. The way the market works, since everyone hates them, theaters that don’t show them will attract greater numbers of consumers relative to those that do and so those that do will stop.”

    Empirical reality: WRONG.

    Net Neutrality
    Market Defender: “Hey, don’t worry about this. These providers won’t treat their consumers badly, because those that do will be less attractive to consumers than those who do not.”

    Uhh, OK.

    Faith is a beautiful, if tragic thing, whether it is a hard-core libertarian or a Hindu mystic…

  19. There have been commercials for television stations since the dawn of time. Besides, I don’t think most people really care. When you’re sitting waiting for your movie, I remember listening to pre-recorded movie stations that were annoying, but nowhere near negative for my overall movie experience. I mean, I wait in long lines to ride the best roller coasters, but does that mean the annoyance, heat, thirst, and impatience I feel are the fault of the park operator? There are petty grievances people will put up with for the sake of entertainment and commercials during the previews aren’t much of a deterrence. No one is saying the market will magically toss the things which people dislike — as long as there is an overall positive then pesky commercials are pretty meaningless and harmless.

    And the “Bend over, consumer” line was just as ridiculous and melodramatic as the rest of your post which is why I pointed that out. A bit funny that sitting in a temperate room with cushioned seats and overpriced refreshments is somehow even figurative sodomy because you have to watch between 30 seconds to 2 minutes of advertising.

  20. So I guess before TiVo, cable consumers suffered in their air-conditioned homes on leather couches for five minutes every thirty minutes because…it was somehow a deficiency of service? No one likes commercials, no one likes long lines at amusement parks, no one likes a lot of the downsides of what is mostly entertaining (depending on the movie or ride, of course). Are people going to withstand the horrible commercials or long wait times for something they do like? Yes, which is why the market does work. If the inconvenience and annoyance of commercials bothers people so much that they stop attending theaters even though the product they are consuming are movies themselves, then you’ll see something change. More pirates to say the least.

  21. The way the market works, since everyone hates them, theaters that don’t show them will attract greater numbers of consumers relative to those that do and so those that do will stop.

    MNG, the theaters have no control over the commercials. They’re on the reel when they get it. It’s the studio’s decision and so no theater can choose to not have them to see if they get more people coming.

    As for Net Neutrality, as long as telcos and ISPs have any kind of government granted monopoly, fuck them with walnuts. When the market is actually opened, let ISPs charge, throttle, or do whatever. But if you dominate because of your government favors, too bad for you if the government tells you what you can and can’t charge for.

  22. Net Neutrality is a great issue for upseting libertarian dogma.

    I don’t know about that. While there is much to be said about having government regulate a screwy system that it had a large part in creating, allowing for more government control is going to inevitably lead to a long term retardation of the system. In the short term, the current duopoly that most consumers have to choose from will probably trend towards shittier and shittier service/pricing, but will eventually lose their market share as people jump at newer and better technologies. If we allow for government intervention in the system, the telecoms and cable companies will use the law to keep any new competition from threatening said market shares.

    I think a much better position for you to take as one of our few resident liberals would be that of Sweden’s. They have a fully nationalized broadband line and pretty much zero requirements to start up your own ISP. So you can get 80 mbps speeds for about the equivalent of $20 a month from the guy down the street. Whether it would work in the US is debatable, but since we are dealing in fantasy it doesn’t really matter.

  23. Been to a movie lately?

    Yes, and I know about the commercials and tend to enter the theater 7 minutes late.

    MNG, you’re arguing against a straw man. Complaining in a survey does not exactly equal actually caring enough.

    It could be that the reason that ad-free movie theaters haven’t sprung up is because, while 90% of people may complain about commercials, they wouldn’t pay an extra buck or whatever a ticket to make up for the revenue that the theaters would miss out on.

    Of course, theaters could just operate at a reduced profit. But in case you haven’t noticed, movie theaters aren’t exactly making a huge profit anyway. So the likely result would just be fewer theaters, since fewer theaters could make a profit.

    MNG’s Preferred Reality– Movie theater-less Detroit. At least there’s no commercials before the movies that aren’t shown!

  24. Using the term “nanobyte” is more than enough to show you have no idea what you’re talking about.

  25. When the market is actually opened, let ISPs charge, throttle, or do whatever.

    Episiarch,

    The Internet is nothing more and nothing less that than a set of specifications. You cannot be an ISP (Internet Service Provider) and do whatever.

  26. +1 for the Doktor Sleepless reference.

  27. The NWO isn’t going to come about this way.

    It’s going to come about the same way every nation falls into third world status: through disorganization, lack of consensus, and increasing tolerance for dysfunction.

    The government isn’t the problem. The People are.

  28. The government isn’t the problem. The People are.

    I guess it’s time for some reNeducation then.

  29. MNG, aside from being an utter jerk, is quite obviously oblivious.

    Theater attendance has been falling for years.

    I imagine that at least one minor reason for that can be traced back to the overabundance of commercials before the feature. So people do what any first-year econ student could tell you they do: they substitute. They rent or buy a DVD, download it from NetFlix, or pirate it off of the internet.

    The upshot? Lower cost to the consumer, and no annoying commercials.

    Yay for the free market.

  30. MNG seems to be channeling Lefiti here.

  31. And, MNG, have you noticed that most monopolies tend to fall apart over time, unless the government steps in to entrench them?

  32. *sulks away,muttering curses at John Thacker*

  33. They rent or buy a DVD, download it from NetFlix, or pirate it off of the internet.

    I don’t understand why renting or buying on a movie is the same as stealing one, just because the technology used to get the movie is similar. Please explain.

  34. But for an unrestricted, unregulated web that accommodates individual needs and quirks, a giant governing body is the last group one should appeal to.

    Goddamn, thank you for putting this into words. Also, fuck telco’s for their government-granted monopoly. Hopefully, opening up the frequency spectrum (wireless, another government-granted monopoly) will put an end to all forms of political control over information transmission.

    This *is* a tough place for libertarians, as MNG rightfully makes the case. We can’t cede control to a company that used government subsidies to entrench itself in the marketplace. But we also can not look to the government to provide a sustainable solution to the problem. I think that, as a whole, the market for information values anonymity, packet neutrality, and speed – and a worthwhile technological solution will be implemented provided that obstacles are not put in place.

  35. I don’t understand why renting or buying on a movie is the same as stealing one, just because the technology used to get the movie is similar. Please explain.

    All issues of copyright legitimacy aside, it’s simply an example of one form of substitution.

  36. …blithely ignoring the fact that their last-mile monopoly is entirely a creature of regulation.

    monopoly…monopoly…monopoly

    What monopoly are you guys talking about? I curently have a choice of 3 services to my home, cable, fiber, and satellite, and that doesn’t include the wireless adaptor I can use from my phone.

  37. Epi
    I worked at a movie theater and it’s a little more complicated. Sometimes certain commercials come with the movie, but often the theaters “build” the reels and can cut out commercials. But if the commercials came on the film and the theater was faced with “show the movie w/commercials or don’t show it all” that would actually prove my point in a way.

    When I worked for the theater things worked like this: the film companies have a distributor that comes into town with various films. What they want to to do is to choose a venue for a film that will get the most tickets sold (so they tend to offer larger theater chains films first, not just because they tend to do more business but also because the chain as a whole gives them more business) and they want to make sure that no two theaters in the area are selling the same movie. So if I give multi-plex one Dark Knight I do not let multi-plex two in the same part of town get it.

    So, unless you drive to another city (or across a big one) there is actually no competition IF you want to see a particular movie. IF you want to see Watchmen you have to go to the Carmike, even if they have crappy seats and charge 50 cents more per ticket and have lots of commercials that annoy you.

    Normally this kind of thing is prevented by anti-trust laws, but movies have some exemption.

    Which brings me to my overall point: markets don’t always work to punish those who are not responsive to the consumers. Market conditions, brought about by complex voluntary interactions among producers, distributors, etc., can bring something like the movie theater situation about.

    And I don’t want that to happen for the internet.

  38. “A bit funny that sitting in a temperate room with cushioned seats and overpriced refreshments is somehow even figurative sodomy because you have to watch between 30 seconds to 2 minutes of advertising.”

    zoltan, don’t be so serious. You’ve never used the expression “I got screwed” to refer to something much less serious than, er, forced sodomy? My point is simply that just about every consumer hates it yet it is actually getting worse every year. In that sense consumers can get “screwed” under market conditions. That’s my point.

    And I loved your work in Dude Where’s My Car.

  39. You know, how when movie theaters started showing all those annoying commercials? And people said “well, folks will just stop going to those theaters and they will learn their wrong ways courtesy of the Magical Mystical Market, which respects and helps the wishes of the Consumer, beloved of The Market.”

    Nice strawman, MNG. Perhaps a link to someone saying that would help your case, but I don’t recall it.

    What I have observed, and done myself, is that plenty of people just show up 5 or 10 minutes late, skipping the commercials. Consumer preference, preserved!

  40. So, unless you drive to another city (or across a big one) there is actually no competition IF you want to see a particular movie

    MNG, where do you live? Here in NoVA there are normally at least 5 theatres within a 20 minutes drive showing any major new film.

    What I have observed, and done myself, is that plenty of people just show up 5 or 10 minutes late…

    Those of us who are always 15 minutes late consider the extra commercials a service.

  41. What an amusing discussion. I was in Brussels last October to caution the EU regulators about the dangerous pile of crap they’re about to unload on Internet users with their half-baked regulations. In essence, the regulators want to stuff the Internet into a regulatory straightjacket that they devised for the telephone network. One piece of work on the table is a guaranteed minimum Quality of Service level for all Internet access.

    The trouble with that notion is that the entire basis of the Internet was to see who well a network could operate if it weren’t required to provide a guaranteed minimum Quality of Service level as the telephone network did. The sad thing is that this notion of minimum QoS was imported by American free networking advocates who are too dumb to know any better.

    Net neutrality means all things to all people, and it’s best not to try and craft public policy out of such airy stuff.

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