Net Neutrality

Obama’s Scheme to Regulate U.S. Into ‘Net Neutrality’ Nirvana Could Kill Broadband

The best use of the FCC in the modern world-or, indeed, the world of decades past-is to hold a pillow over its face until it stops twitching.

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Internet
Rock1997

President Obama's bold proposal to respond, 20 years later, to the explosion of the dynamic, innovative online world by regulating Internet service providers like a government-crafted public utility from the 1930s spurred a response from the telecom industry: A screeching halt on investment in Internet access. "We are now starting infrastructure projects that we don't have any clarity or line of sight, in terms of what rules those will be governed under," AT&T Chief Executive Officer Randall Stephenson said, referring to the company's big-ticket investments in fiber-optic broadband networks around the United States. "That can have no effect other than to cause one to pause."

No doubt, Stephenson's announcement that his company will stop the expansion of broadband networks was intended as a "fuck you" to the president—AT&T already announced its opposition to the White House's plan to "reclassify consumer broadband service under Title II of the Telecommunications Act." There's also more than a little irony in the spat considering that AT&T was, for decades, a creature of the state, benefiting from the brief nationalization of the telecommunications industry in 1918 and favorable state and federal regulations that froze out competitors long afterward. But that doesn't erase Stephenson's threat, or the potentially chilling impact of new regulation on what has been a dynamic sector of the economy.

Holding off on investments is not an unexpected or illogical response to a shifting regulatory landscape. There's the damage done by heavy-handed regulation in and of itself, of course. Red tape tends to strangle. But changing the rules of the game, especially when they look like they're moving in a punitive direction, causes businesspeople to hold their money tight and keep their heads down, in hopes that they'll escape the wrath of the bureaucrats.

In a 2001 examination of decades of antitrust policy for the Cato Journal, George Bittlingmayer, now at the University of Kansas, wrote that "It turns out that whatever the ability of antitrust to lower prices and increase output in theory or in isolated circumstances, one actual effect of antitrust in practice may have been to curtail investment." In particular, he attributed low investment in the late 1950s and early 1960s to "aggressive antitrust and related initiatives."

Investors pulled in their horns to avoid notice.

For the Brookings Institution, Robert Litan addressed the Title II regulation that President Obama wants the Federal Communications Commission to inflict on Internet service providers, He pointed out that the regulation was intended for the old, monopolistic AT&T, and it's just not "appropriate to apply Title II regulation to ISPs, where there are at least two providers of access (wireline and wireless) in virtually all of the United States, and at least two providers of wireline access (cable and telephone) in nearly three quarters of the United States."

That is, Title II has a specific purpose, and it has nothing to do with Obama's annoyance that Netflix may have to pay for expanded access to paying consumers. In fact, Litan points out that Title II may still permit such charges.

Beyond that, he warns, there's a real risk that exposing ISPs to Title II regulation "could lay the foundation for imposing Title II regulation on some parties within the tech industry as well." Targeting the telecoms that everybody loves to hate (often for damned good reason) threatens to be the foot in the door allowing the FCC to sink its talons into all sorts of tech businesses. He points to the expanding application of pollution in Section 111(d) the Clean Air Act as an example of regulation creeping far beyond its intended purpose as regulators find openings to use their weapons in new and interesting ways.

So…the threat of regulation and aggressive regulatory oversight tends to chill investment. Title II regulation would likely still permit the stuff the president says he wants it to stop. And once unleashed, Title II is likely to follow in the footsteps of other regulatory regimes and engulf unexpected companies and whole industries. And that will probably discourage investment by people who have little or no connection with Randall Stephenson.

Note that businesses' reaction to the threat of regulatory whack-a-mole has nothing to do with their moral fiber or lack thereof. Randall Stephenson may be sulking because, this time, the bureaucrats' could turn their guns on him instead of on AT&T's less-connected competitors. But his qualities and those of his company have nothing to do with the jobs, businesses, and infrastructure not created because investors are frightened by an unfriendly regulatory environment.

The abuses that the FCC was established to mitigate were themselves creations of government. This is yet another example of government promising to fix things that it fucked up.

The best use of the FCC in the modern world—or, indeed, the world of decades past—is to hold a pillow over its face until it stops twitching. Once gone, it won't be available as a bludgeon for ignorant (or opportunistic) politicians to use to inflict damage on a world they don't understand (or don't respect).

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80 responses to “Obama’s Scheme to Regulate U.S. Into ‘Net Neutrality’ Nirvana Could Kill Broadband

  1. “A rule not ultimately backed by the threat of violence is merely a suggestion. States rely on laws enforced by men ready to do violence against lawbreakers. Every tax, every code and every licensing requirement demands an escalating progression of penalties that, in the end, must result in the forcible seizure of property or imprisonment by armed men prepared to do violence in the event of resistance or non?compliance. Every time a soccer mom stands up and demands harsher penalties for drunk driving, or selling cigarettes to minors, or owning a pit bull, or not recycling, she is petitioning the state to use force to impose her will. She is no longer asking nicely.”
    — Jack Donovan | Violence is Golden

  2. That is, Title II has a specific purpose, and it has nothing to do with Obama’s annoyance that Netflix may have to pay for expanded access to paying consumers.

    You think this administration cares? All they are looking for is a (thin) veil to cover rule by executive fiat. They see a hole and they have a peg, and by God, their going to jam it in there good and tight. Forget that the hole may only be a slight dip in the road, and that the peg is actually a stick of dynamite.

  3. This is yet another example of government promising to fix things that it fucked up.

    “Government is good at one thing: It knows how to break your legs, hand you a crutch, and say, ‘See, if it weren’t for the government, you wouldn’t be able to walk.'” — Harry Browne

    1. I used that line on a prog friend of mine, in a discussion about net neutrality. He told me that you need to just swallow your pride and accept the crutch, because at least then you can “walk”.

      While technically true, it ignores the likelihood that government’s going to kick the crutch out from under your arm after you go a couple of steps.

      1. Or, since you accepted a crutch paid for by the taxpayers, they’ll claim that they can now tell you what kind of music you can listen to.

        1. You didn’t build that crutch.

      2. And the idiot didn’t bother to consider the part where it was the government that broke your legs in the first place.

        Leftoids are not scrupulous thinkers.

    2. The progs I know invent reasons to blame the private sector the the leg breakage. They seem hard-wired not to question the omnibenevolence of government (swt), except on abortion.

  4. It’s pretty fun listening to all the net neutrality dumbfucks couch their arguments in opposition to Evil KKKORPORASHUNS! ruining the equal and open internet we all love while defending multi-billion dollar media properties whose righteous support for the cause couldn’t possibly have anything to do with self interest…

    But yeah, the public is on Obama’s side on this one. Since at least a year ago I’ve been getting pants-shitting email forwards from family friends sent by everyone from evangelical Christian organizations, to conspiracy theorist blogs, to Kos and the DNC fear mongering their constituencies about Big Evil Telecom blocking access to their lonely lights of truth and free expression in the absence of net neutrality regs. It was fun while it lasted.

    1. What is it about people that seems to make them chronically unable to grasp regulatory capture? Or do they get it, and simply think it is preferable to market forces?

      I’m serious, I need one of the progressives on here to explain this to me.

      1. Cause most people are fucking stupid? I think that’s it, frankly.

        1. So Gruber is right ?

            1. Shut the fuck up, Donny!

        2. I know that’s a popular explanation, but it doesn’t agree with my experience. I know a lot of people that are not just well educated, but genuinely geniuses capable of grasping very difficult concepts and often finding totally new answers to totally new questions.

          So do they just not care enough to take the time to really think through this issue? Are they trapped in an ideology? Or am I missing something?

          1. I agree. I think it’s a tendency of large groups, sort of the “persons are smart; people are stupid” phenomenon.

          2. Arrogance usually trumps intelligence. And intelligent people are generally pretty arrogant.

      2. They’re like 1-move chess players. They don’t contemplate the consequences of an action. If it sounds righteous and makes them feel good, that’s about as far as the logic train gets. A heroes and villains narrative, however ridiculous, makes it especially easy for them to emote rather than think.

      3. The emotional development of people, in this country and many others, has been stunted to the point that a majority never move past pre-adolescence.

        These people want a father figure to protect them from the vagaries of life, a role that political charlatans are happy to pretend to fill.

        1. “Oh, very well. You can stay on your parent’s policy *forever*!”

          1. When that rule was first promulgated I would tell people that the government should make kids eligible for coverage under their parents Medicare.

            The frightening number of people thought that was a serious proposal and good idea.

            1. “If you like your parent’s plan, you can keep it.”

      4. I think that the main reason is that people love them some internet, so any threat to disrupt that goodness scares the crap out of them.

        If the gubbment had somehow decided to license one gang to distribute crack and made sure there were no other channels that you could buy crack through, you can bet any threat to limit access to the official crack dealers would cause a similar uproar.

        I also think that most people don’t realize that there are more than one broadband provider in most markets. I know in my neighborhood, cable was the only provider for several years (our local phone company screwed the pooch on its rollout). Almost everyone in my neighborhood got cable broadband and have never revisited their decision.

        1. Didn’t the CIA basically do what you postulated?

          1. Your wording suggests you think they aren’t doing it now.

      5. A heroes and villains narrative, however ridiculous, makes it especially easy for them to emote rather than think.

        The emotional development of people, in this country and many others, has been stunted to the point that a majority never move past pre-adolescence.

        Emotions are the driving factor in most people’s decision-making ability. Not facts, or logic, or reason, but how it feeeeeeels to them.

        “It pisses me off that my Netflix streaming is slow! The government must do something to make me feel better!” is about as far as they get.

        1. I don’t know how tongue-in-cheek you were being, but this movement to fuck up the internet with FCC regulation is entirely because of Netflix. People in this country are so ignorant about how the internet works, they’re willing to turn it over to a bunch of fucking bureaucrats because they want their Netflix. Literally, that’s what’s happening.

          Define irony: the same people who moan about Janet Jackson’s nipple causing an uproar & a retaliatory fine by the FCC are all in on Net Neutrality. Fucking idiots.

      6. One doesn’t need to be a progressive to explain this phenomenon. Any statist will do. I used to be statist, and I think I understand why people are chronically unable to grasp all sorts of obvious defects in government.

        Americans are brainwashed to believe in the inherent goodness of their government. With good men and women in charge, their government always does the right thing. The only reason government does otherwise is that venal people sometimes get into government for selfish reasons. That’s why it is so important to elect people from one’s preferred political party.

        The brainwashing is accomplished and maintained by
        1) Thirteen years of continuous indoctrination in government schools.
        2) Continual reinforcement of the indoctrination in news and entertainment media.
        3) Shared responsibility for mass murder, carnage and injustice undertaken by the state. It is more comfortable to believe that it was for a good cause.
        4) Co-option in compulsory welfare schemes such as social security, Medicare, unemployment insurance, etc.
        5) Pariah status for those who rock the boat in any disturbing way.

      7. Government is us, we the people, while the corporations and the rich are them. “Market forces,” as you so naively call them, are nothing more than the rich and the corporations taking advantage of the people. That’s why we need the government, we the people, to regulate and make rules. Because the government is us, we the people, it’s really us making rules to control the rich and the corporations.

        The problem is that the rich and the corporations control the government, which is us the people. But that’s only because the government, we the people, don’t have enough power. That’s why we need to give more power to the government, so we the people can control the rich and the corporations that control the government that is really us.

        See?

  5. Holding off on investments is not an unexpected or illogical response to a shifting regulatory landscape.

    When every aspect of your adult existence has been tethered to government and you have no base knowledge in the private sector from which to guide your decision making, business becoming wary in the face of uncertain future bureaucratic meddling is completely unexpected.

  6. Thank God for Title 2 regulation to increase competition… after all, I have SOOOO many choices of gas, water, and electricity suppliers coming into my house!

    1. LEts see for gas I have – no one, there’s no gas hookup. If there was it’d be National Grid.

      For Electricity the list is National Grid.

      For water the options are: the city.

      Yes, Larrybud, we have it made.

    2. You have a choice of whose rates you get to use for the supply. For the distribution you have no choice whatsoever.

      Oh, and 95% of the bill is for distribution.

  7. Nothing can exist without regulation. Regulation is a prerequisite for existence. Being that there is no regulation of the internet, the internet doesn’t exist. I sure hope the FCC hurries up and regulates the internet so I can troll libertarian websites with my profound and deliberate ignorance.

    /Tony

    1. Well, to be fair, some exploitative capitalist facsimile of the internet, stolen by corporate fatcats from beneficent DARPA, does exist. Is that really something we want?

  8. How long until the statist dumbfucks from reddit come here to tell us about how corporations are TEH EVUL and it’s not fair that Comcast gets to decide what to do with its own network?

    1. Comcast is a bad example, it has so many local monopoly districts that it’s a Quango.

      1. Blaming Comcast is like blaming Jim Crow laws on rednecks.

      2. In the suburb where I used to live, the city council fought to protect Comcast’s monopoly franchise. Naturally, the goodthinkful people blamed market failure and asked why the city council hadn’t stepped in and done something.

        1. I thought Ms Dalmia educated us on there being no problem with monopolies in the broadband industry?

          1. The problem in the broadband industry is not the feds this time. The problem is cities and counties creating local monopolies.

      3. A disadvantageous example for your side; that does not make it a bad example.

    2. Corporations control the government!

      They have to be regulated!

      By who?

      The government!

  9. Holding off on investments is not an unexpected or illogical response to a shifting regulatory landscape.

    This statement does not go far enough.

    The purpose of business is to make money. Innovation, investment and improvements to the product or service sold are ‘evils’ necessitated by the opportunities and fear created by competition. Precluding competition eliminates the need for improvement of all sorts including investment by the legacy players who are now free to structure their business so as to maximize the rent that the get from the regulated pseudo market.

    1. Nuh uh! The purpose of business is to create jobs! And what’s that nonsense about investments and improvements? You didn’t build that!

      /Obama

    2. How is investment in response to an opportunity to make more money considered an “evil”?

      You seem to have the same sinister view of business that the lefties do.

  10. Another factor in all of this is the fact that when broadband providers were rolling out coverage, they offered plans and rates that didn’t age well.

    I don’t think anyone (providers or consumers) realized how much broadband access would be utilized. No one anticipated that more people would be getting their viewing entirely via Netflix or Hulu than regular TV programming.

    The result was plans that were way underpriced. Now that the telco’s have realized that they need to build out their infrastructure to meet that demand, they need to raise rates. Obviously the customers like the old underpriced plans and think that somehow the government can a) make the evil corporations continue to offer the below market price plans and still b) add capacity to the system for free.

    1. That and the plans offered were too broadly defined. There were a large subset of users who, although staying within the terms of their contract, consumed a massive amount of bandwidth. The peer to peer crowd has been a loud and vocal agitator for net neutrality because they want to have their cake and eat it too. Of course, they don’t realize that they will be regulated to death under a government enforced system.

    2. I don’t think anyone (providers or consumers) realized how much broadband access would be utilized. No one anticipated that more people would be getting their viewing entirely via Netflix or Hulu than regular TV programming.

      Because that’s a batshit insane and incredibly inefficient way to get video.

      1. Because that’s a batshit insane and incredibly inefficient way to get video.

        And trucking is a batshit insane and incredibly inefficient way to ship things in a world full of container ships. Except for that whole “land” thing.

      2. Not really if your tv viewing isn’t excessive. I watch like 5 shows on a regular basis. It’s easier and cheaper for me to get them via broadband instead of paying for a high priced cable tv package. A season of Game of Thrones, for example, costs like $40 bucks on amazon. If I got cable I’d be paying $90+ per month for TV with HBO.

        Now, if you are a TV hound and need to watch every moment of BravoTV then yes, you’re probably better served by subscribing to cable.

        Full disclosure – I do currently subscribe to DirecTV for tv viewing, but only the basic package plus local channels (so like $45 a month) because I sill like to watch the local news, but that’s virtually all I watch on it.

      3. “Hmm… it’s almost as if the internet wasn’t designed to deal with the insane bandwidth strain of Netflix and other HD streaming services.

        “But how dare the ISPs complain! They’re rich! We, as Americans, have a RIGHT to as much bandwidth as we want for as little money as possible. So they have to give us what we want NOW.

        “And since there’s only one proven way to get higher quality and quantity for less money, let’s throw that aside and let gubment regulate the ‘net. Because that will DEFINITELY lower prices.”

        THIS IS WHAT NET NEUTRALITY SUPPORTERS ACTUALLY BELIEVE

  11. the foot in the door allowing the FCC to sink its talons into all sorts of tech businesses.

    But all those unregulated businesses are taking advantage of consumers by providing services they voluntarily purchase. The government must intervene on their (the consumers’) behalf, and save them from themselves.

  12. Holding off on investments is not an unexpected or illogical response to a shifting regulatory landscape.

    Two words: regime uncertainty.

    Just as the business environment seems to moving to something like normalcy, Obama takes us back to 2009 with talk about new EOs, new climate deals, and radical telecom regulation.

    1. On the other hand, is there really uncertainty about how Obama will react to any situation. Threaten, regulate, tax..extra-legal actions to increase the size and power of the government. I’d say that it’s actually perfectly predictable.

      1. Yeah, but potential investors don’t know where Obama fits on the continuum between, say, FDR’s NRA and Chavez’ Venezuela.

        Even under NRA, there were superficially attractive investment opportunities, if for nothing else than rent-seeking. But the uncertainty of the NRA regime made new capital commitments intolerably risky. Under Chavez, capital fled from Venezuela entirely.

        1. Under Chavez, capital fled from Venezuela entirely.

          Here in the states, we call corporate capital flight “inversion”. And its definitely a thing.

          1. BINGO! Dead on!

  13. There’s also more than a little irony in the spat considering that AT&T was, for decades, a creature of the state, benefiting from the brief nationalization of the telecommunications industry in 1918 and favorable state and federal regulations that froze out competitors long afterward

    I thought the American Telephone and Telegraph name was sold several times since the breakup into the baby bells. So wouldn’t the current AT&T then be a different company that bought the name recognition of the old AT&T?

    1. Hard to believe anyone would want that brand equity, but I guess there’s no such thing as bad publicity.

  14. Obama’s Scheme to Regulate U.S. Into ‘Net Neutrality’ Nirvana Could Kill Broadband

    Where’s our resident little red Marxian to tell us that we’re being creepy for questioning the democratic process and that people should not have too much Internet anyway?

  15. Of course, not mentioned is that the internet got to the place it is now with implicit net neutrality. So to claim that the internet will end as we know it is just.. stupid?

    As to regulation – this can be resolve very simply and in one sentence:

    “No network operator providing internet connectivity, either end to end or any segment in between, shall prioritize one data packet over another except as necessary for network operational control.”

    Anything more is above and beyond and not necessary.

    1. Your regulation is also unnecessary.

    2. How about this.

      No network operator having a local franchise that restricts competitors shall also provide entertainment, educational, or any other content.

      After all, the reason Comcast wants to charge Netflix is to put them at a competitive disadvantage to to content Comcast sells.

      1. “No network operator [shall have] a local franchise”

        FTFY

        Why is this so fucking hard for people to understand?

    3. How about – The internet, being necessary to the security of a free state, the right of the people to contract with each other to provide internet and internet related services shall not be infringed.

    4. Of course, not mentioned is that the internet got to the place it is now with implicit net neutrality.
      [Citation needed]

      Also, bullshit. This coming from someone who has worked for ISPs since 1996.

  16. apparently there are two sides…which side allows us to keep our internet freedom, allows us to have access to any content at a reasonable speed, and is in the price range of really cheap to free and which side won’t have that?

    1. There aren’t two sides. The government and the corporations both want the same thing – to charge you more and to prevent competitors from emerging.

      TINSTAAFL.

  17. My best friend’s mother-in-law makes $85 /hour on the internet . She has been out of work for 5 months but last month her pay was $16453 just working on the internet for a few hours.
    Visit this website ????? http://www.jobsfish.com

  18. Many of the people who reflexively support net neutrality live in cities where there is a monopoly. They don’t understand why there is one (often its the city who offered someone a monopoly) but they experience ComCast only levels of service.

    Thus, to these people, net neutrality sounds like a godsend.

    However, if you live in an area where you have competition (we have 3+ providers in my area) then you find the idea of net neutrality to be less of an issue. At&T provides great service without a contract when it knows there are other providers breathing down their neck.

    Finally, there are a bunch of idiots who go one reddit and hear stories from people living in Korea or wherever about how super fast their internet is, and it only costs pennies.

    Instead of wondering why Korea Telecom doesn’t come over to America and blow AT&T and Comcast out of the water, they just assume that it must be the evil corporations of Amerikkka that are preventing Korean rate levels.

    Very annoying.

  19. The good news is that Obama is the reverse Midas. I bet support for net neutrality falls thanks to his support of this.

  20. The internet – the last bastion of commerce to destroy, eh Obama! Know what’s funny is this ‘utility’ will probably be down to 14.4 or 56K dialup speeds (an age of speed so glad to be away from, where images took forever to load) for DSL prices of $75 a month.

    I WILL say- THANKS to the high-data-sucking-advertisements that ruined it for everyone. I know we all need advertisements, but the amount of data is like a digital landfill of junk media.

  21. In the followup to this, the slippery slope of Network Neutrality leads to rebirth of Hitler, in Internet form, because all government activity leads to Hitler.

    I think most people want to maintain the option to buy a fast connection that pulls data from wherever they like without getting throttled. The big network providers feel otherwise, because there is an economic incentive to not let people get access to whatever data they want. Republican’s hands are mostly tied giving the large providers local monopolies. There’s clearly no bill on the table using the interstate commerce clause to prevent local governments from giving these exclusive rights to these area-based monopolies. Given my choice between two sides of the government already controls the damn stuff, I’m going to pick the side of the government that lets me maintain the option to buy a fast connection that pulls data from wherever the fuck I like. Apparently reason favors the option where the cable companies just keep the government monopoly and are completely helpless to do anything about it.

    1. You aren’t vwry bright, I’m guessing.

    2. 99.9% of the US population has access to at least 2 wireless providers. The local monopolies on wired services granted by local governments, are simply crony capitalist or, more precisely, fascist, situations. You want to change those policies, see your local govt. Getting the Feds involved merely makes a bad situation worse.

  22. very

  23. Unless you are living under a rock, it is clear barry’s goal is to undermine america in every possible way.

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