Democrats are trying once again to revive a proposed solution to theoretical complications that would only exist because of government intervention. Since HBO host John Oliver pontificated about net neutrality back in 2014, a federal law that mandates all Internet service providers (ISPs) treat all data the same, it has become a passionate issue for millennials, Netflix binge-watchers, and porn addicts across the nation.
Recently, the Senate participated in a procedural vote on a joint resolution to resuscitate the 2015 Open Internet Order, otherwise known as net neutrality, which the Federal Communications Commission (FCC) agreed to repeal earlier this year. The FCC is scheduled to rollback net neutrality next month, but Democrats, and a couple of Republicans, are planning to overturn the controversial decision.
Many, including Senator Bernie Sanders (I-VT), told the American people that this would be the end of the Internet. Other anonymous online commenters will hurl obscenities at you if you dare speak out against yet another government intrusion.
Efforts to bring back the Obama-era rule are mostly symbolic, as actually doing it would require House approval and President Donald Trump’s signature. Both are unlikely to happen: Trump will not offer his John Hancock for such legislation and there would need to be at least 25 Republicans to back the initiative.
Net neutrality proponents, who say ISPs may block content or play favoritism, are trying to frame the argument as corporations versus the people. This may succeed, considering the public’s disdain for cable companies.
Senate Minority Leader Chuck Schumer (D-NY) said in a statement:
“Soon, the American people will know which side their member of Congress is on: fighting for big corporations and ISPs or defending small business owners, entrepreneurs, middle-class families, and everyday consumers.”
Unfortunately for Schumer and his allies, net neutrality does not help those everyday consumers, but rather enables greater monopolistic powers and less competition. Net neutrality is a gift to Silicon Valley and tech lobbyists, not the typical household. Thankfully, FCC head Ajit Pai sees through the pleas and myths, and this is one of the best domestic maneuvers of the Trump administration – for several reasons.
First, many of the doom and gloom scenarios proposed by advocates of net neutrality are unfounded. There may be concerns that Comcast would block Netflix to encourage subscribers to purchase paid-TV packages, but there are two federal agencies that would prevent that from occurring since it violates competition laws.
Second, there is very little incentive for ISPs to adopt that type of policy because most consumers want an Internet without any hurdles, walls, and blockades. (Religious ISPs are exempted.) This has been the case for 20-plus years.
Third, the government can never know the so-called correct prices for Internet service.
And finally, if President Trump is a tyrannical dictator as many on the left suggest, why would you want him to be in charge of the Internet?
Hurting You and Helping the Big Guy
It is true that there is very little competition in the telecommunications market. Right now, there are only two handfuls of companies that control the Internet, but this is the result of government interference. Everything from regulations to intense lobbying, the situation the public endures today is because big government, not the free market, bestowed these behemoths this power.
Prior to the advent of net neutrality, the major drivers of U.S. Internet traffic, primarily Google’s YouTube and Netflix, refused to pay market rates that the likes of Comcast and Verizon requested to move the traffic. These streaming juggernauts lobbied the federal government and got former President Barack Obama to order regulators to ensure that’s what takes place.
Since then, net neutrality activists keep spouting hypothetical cases and solutions to these theories. Considering how much support it has gotten in the mainstream media and across the web, it’s worked.
But not for consumers, the very people crusaders of online justice say they want to help. For the last two years, investment in broadband networks has fallen for the first time, which isn’t a positive trend for those residing in rural communities where Internet access is quite limited.
Right now, Facebook and Google support net neutrality, citing the same misleading worries, like censorship and cronyism. What’s comical is that these institutions are embracing censorship and cronyism, so their endorsement should be concerning.
Many say that the government, through the FCC and 19th century public utility laws, can work in the public’s interest. Will it? As we have seen throughout history, it’s usually the little guys that are restricted from entering the marketplace in order to appease the influential big guys. Smaller companies are always at the mercy of some new regulation that’s supposed to come to their rescue. Poppycock!
Economist Douglass North may have said it best:
“Institutions are not necessarily or even usually created to be socially efficient; rather they, or at least the formal rules, are created to serve the interests of those with the bargaining power to create new rules.”
Market Competition Beats Net Neutrality
Legendary economist Murray Rothbard always averred that it’s OK to be ignorant of economics. In the same regard, it’s OK to be ignorant of technology and the Internet, but the paucity of insight and the inundation of fibs shouldn’t drive public policy.
Net neutrality, no matter how it is marketed by statists, is just another way to prevent the marketplace from allocating goods and services, and instead rely on government to determine what’s just. In any free market, products are sold to those who have the highest demand, which results in higher prices.
Yes, there will be a crop of consumers who will have the means to pay for faster Internet service than others. However, just because premium plans exist, it doesn’t mean lower-priced services will be eliminated from the market. The same ideas are applied to food, apparel, automobiles, and a diverse array of other goods. This is how a market functions.
Unless a company maintains monopolistic power granted by government, any enterprise can freely enter an industry and listen to the needs of customers. If these private firms – large or small – wish to become profitable, they must effectively utilize resources that consumers demand, if not then a competitor will.
Net neutrality doesn’t foster this environment. It instead results in less competition, fewer options, and higher prices. Regulation only begets regulation, eventually driving out smaller businesses in favor of the larger ones. In the last 30 years, only a few corporations have gained substantial market share – two-thirds of U.S. households have fewer than two options – and this was enabled by state rules. Rather than erecting new impediments to competition, it’s time to dismantle archaic barriers and decentralize the entire system. Internet freedom is the goal, not limitations foisted by bureaucrats.
Do you support or oppose net neutrality? Let us know in the comments section!
Andrew has written extensively on economics, business, and political subjects for the last decade. He also writes about economics at Economic Collapse News and commodities at EarnForex.com. He is the author of "The War on Cash." You can learn more at AndrewMoran.net.
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