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Ben Sperry and I have a long piece on net neutrality in the latest issue of Reason Magazine entitled, “How to Break the Internet.” It’s part of a special collection of articles and videos dedicated to the proposition “Don’t Tread on My Internet!”

Reason has put together a great bunch of material, and packaged it in a special retro-designed page that will make you think it’s the 1990s all over again (complete with flaming graphics and dancing Internet babies).

Here’s a taste of our article:

“Net neutrality” sounds like a good idea. It isn’t.

As political slogans go, the phrase net neutrality has been enormously effective, riling up the chattering classes and forcing a sea change in the government’s decades-old hands-off approach to regulating the Internet. But as an organizing principle for the Internet, the concept is dangerously misguided. That is especially true of the particular form of net neutrality regulation proposed in February by Federal Communications Commission (FCC) Chairman Tom Wheeler.

Net neutrality backers traffic in fear. Pushing a suite of suggested interventions, they warn of rapacious cable operators who seek to control online media and other content by “picking winners and losers” on the Internet. They proclaim that regulation is the only way to stave off “fast lanes” that would render your favorite website “invisible” unless it’s one of the corporate-favored. They declare that it will shelter startups, guarantee free expression, and preserve the great, egalitarian “openness” of the Internet.

No decent person, in other words, could be against net neutrality.

In truth, this latest campaign to regulate the Internet is an apt illustration of F.A. Hayek’s famous observation that “the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Egged on by a bootleggers-and-Baptists coalition of rent-seeking industry groups and corporation-hating progressives (and bolstered by a highly unusual proclamation from the White House), Chairman Wheeler and his staff are attempting to design something they know very little about-not just the sprawling Internet of today, but also the unknowable Internet of tomorrow.

And the rest of the contents of the site are great, as well. Among other things, there’s:

• “Why are Edward Snowden’s supporters so eager to give the government more control over the Internet?” Matt Welch’s  take on the contradictions in the thinking of net neutrality’s biggest advocates.
• “The Feds want a back door into your computer. Again.” Declan McCullagh on the eternal return of government attempts to pre-hack your technology.
• “Uncle Sam wants your Fitbit.” Adam Thierer on the coming clampdown on data coursing through the Internet of Things.
• Mike Godwin on how net neutrality can hurt developing countries most of all.
• “How states are planning to grab tax dollars for online sales,” by Veronique de Rugy
• FCC Commissioner Ajit Pai on why net neutrality is “a solution that won’t work to a problem that simply doesn’t exist.”
• “8 great libertarian apps that make your world a little freer and a whole lot easier to navigate.”

There’s all that, plus enough flaming images and dancing babies to make your eyes bleed. Highly recommended!

Filed under: net neutrality, regulation, technology, telecommunications, television Tagged: ajit pai, internet, net neutrality, reason magazine, regulating the Internet

Excerpt

California’s leaders have worked long and hard to dispel the state’s image as an over-regulated maze for business. In 2012, those efforts culminated in a landmark law, signed by Democratic Gov. Jerry Brown, declaring that the state would not regulate the Internet, preserving the freewheeling innovation and vitality of one the state’s most critical economic drivers.

But now an unelected state official reviewing the Comcast-Time Warner Cable deal has called for sweeping new Internet regulations — under the guise of its review of the transaction — that would render that bipartisan law a dead letter.

If Internet access, speeds and prices can suddenly be mandated by the California Public Utilities Commission (CPUC) under this kind of flimsy pretense, the legislative policy of Internet freedom and deregulation online would no longer exist. Hopefully cooler heads will prevail as the full commission moves forward.

Overall, the CPUC’s proposed decision correctly recognized that the transaction should be approved. That was no great surprise, because Comcast and Time Warner Cable operate in separate markets, it was always clear that the competitive issues raised by this deal were limited and could be readily addressed.

But most of the conditions suggested in the proposed decision have nothing to do with addressing the sort of competitive concerns that the deal might raise. Instead they address broader policy issues that are the province of the Legislature, not an unelected state official supposedly reviewing a single business transaction.

Continue reading at Los Angeles Daily News

Excerpt

The line between a “principled change of views” and a “craven flip-flop” is a fine one. But if there were a land-speed record for changing one’s mind, Netflix would have just won it.

A mere four days into the new net neutrality world order it helped to usher in, Netflix was already expressing doubts about the regnant Title II canon. Twitter was agog much of Wednesday with reporters politely noting the absurdity. “Can’t believe that @netflix, the poster child for #Title II, is now saying it really didn’t mean it. WTF,” remarked one journalist.

It’s not an exaggeration to say that Netflix was one of the chief evangelists for an exhaustive net neutrality decree. One of the watershed moments in the debate leading up to the FCC’s vote last Thursday was Netflix’s fervent claim that the strongest possible rules were needed to prevent Internet providers from imposing “online tolls” or discriminating against the video giant’s traffic. With Google sitting out this round, net neutrality activists needed a corporate crusader. They found one in Netflix.
Of course, that inflammatory charge was never actually borne out by the facts. It turns out that Netflix (and its partner, Cogent) was slowing down its own traffic with spurious routing decisions, seemingly tailor-made to create the spectacle it needed to galvanize the faithful. The gambit worked. Disingenuous or not, there’s no disputing that it greatly influenced the outcome, ultimately leading to the passage of the most onerous form of net neutrality rules.

And this isn’t the only case where Netflix is sitting comfortably on both sides of the issue. The company recently announced a new initiative in Australia where one ISP will exempt Netflix traffic from its data limits. That practice — called “zero rating” — isn’t unusual, especially in the developing world, but it raises plenty of hackles among net neutrality disciples.

Continue reading on TheHill.com

Excerpt

The day after the FCC’s net neutrality vote, Washington was downright frigid. I’d spoken at three events about the ruling, mentioning at each that the order could be overturned in court. I was tired and ready to go home.

I could see my Uber at the corner when I felt a hand on my arm. The woman’s face was anxious. “I heard your talk,” she said.“If net neutrality is overturned, will I still be able to Skype with my son in Turkey?”

The question reveals the problem with the supposed four million comments submitted in support of net neutrality. *Almost no one really gets it. *Fewer still understand Title II, the regulatory tool the FCC just invoked to impose its conception of net neutrality on the Internet.

Some internet engineers and innovators do get it. Mark Cuban rightly calls the uncertainty created by Title II a “Whac-a-Mole environment,” driven by political whims. And telecom lawyers? They love it: whatever happens, the inevitable litigation will mean a decade’s worth of job security.

As I’ve said in technically detailed comments, academic coalition letters, papers, and even here at Wired, while “”net neutrality”” sounds like a good idea, it isn’t. And reclassifying the internet under Title II, an antiquated set of laws repurposed in the 1930s for Ma Bell, is the worst way to regulate dynamic digital services.

Continue reading on WIRED.com

Republican FCC Commissioners Ajit Pai and Mike O’Rielly spoke about their opposition to the Federal Communications Commission (FCC) rules on net neutrality. The FCC voted 3-2 the previous day to regulate the Internet as a public utility.

Attorneys talked about the Federal Communications Commission (FCC) 3-2 vote in favor of rule changes that reclassify high-speed broadband as a public utility, The change was intended to prevent Internet service providers from giving some customers preferential treatment or establishing “fast lanes.”

It’s easy to look at the net neutrality debate and assume that everyone is acting in their self-interest and against consumer welfare. Thus, many on the left denounce all opposition to Title II as essentially “Comcast-funded,” aimed at undermining the Open Internet to further nefarious, hidden agendas. No matter how often opponents make the economic argument that Title II would reduce incentives to invest in the network, many will not listen because they have convinced themselves that it is simply special-interest pleading.

But whatever you think of ISPs’ incentives to oppose Title II, the incentive for the tech companies (like Cisco, Qualcomm, Nokia and IBM) that design and build key elements of network infrastructure and the devices that connect to it (i.e., essential input providers) is to build out networks and increase adoption (i.e., to expand output). These companies’ fundamental incentive with respect to regulation of the Internet is the adoption of rules that favor investment. They operate in highly competitive markets, they don’t offer competing content and they don’t stand as alleged “gatekeepers” seeking monopoly returns from, or control over, what crosses over the Interwebs.

Thus, it is no small thing that 60 tech companies — including some of the world’s largest, based both in the US and abroad — that are heavily invested in the buildout of networks and devices, as well as more than 100 manufacturing firms that are increasingly building the products and devices that make up the “Internet of Things,” have written letters strongly opposing the reclassification of broadband under Title II.

There is probably no more objective evidence that Title II reclassification will harm broadband deployment than the opposition of these informed market participants.

These companies have the most to lose from reduced buildout, and no reasonable nefarious plots can be constructed to impugn their opposition to reclassification as consumer-harming self-interest in disguise. Their self-interest is on their sleeves: More broadband deployment and adoption — which is exactly what the Open Internet proceedings are supposed to accomplish.

If the FCC chooses the reclassification route, it will most assuredly end up in litigation. And when it does, the opposition of these companies to Title II should be Exhibit A in the effort to debunk the FCC’s purported basis for its rules: the “virtuous circle” theory that says that strong net neutrality rules are necessary to drive broadband investment and deployment.

Access to all the wonderful content the Internet has brought us is not possible without the billions of dollars that have been invested in building the networks and devices themselves. Let’s not kill the goose that lays the golden eggs.

Filed under: antitrust, law and economics, markets, monopolization, net neutrality, technology, telecommunications, vertical restraints, wireless Tagged: antitrust, net neutrality, open internet, tech companies, Title II

Summary

“We are professors and scholars of law, business, economics, and public policy with expertise in communications, competition, innovation, industrial organization and related fields. We write to express our concerns regarding the Federal Communications Commission’s (“FCC”) apparent plans to prohibit paid prioritization and to reclassify broadband under Title II of the Communications Act. In its competition advocacy, the Federal Trade Commission (“FTC”) promotes consumer welfare by analyzing policies and offering alternatives to state and federal governmental agencies. Currently, the FCC is considering a new Open Internet Order that would have considerable negative effects on consumers…”

President Obama has come out in support of net-neutrality rules. Critics argue that the Internet should not, however, be treated as a utility like electricity. Joining Brian Lehrer to dissect both sides are Timothy Karr, senior director of strategy at Free Press, and on Skype from D.C., Geoffrey Manne, founder of the International Center for Law and Economics.

http://youtu.be/s7bnaPaIpS4?t=13m44s