Goodbye, Net Neutrality. Hello, Liberty. Gary North from Specific Answers

Goodbye, Net Neutrality. Hello, Liberty.

Gary North - November 30, 2017

The New York Times has published a screed with this title: The Internet Is Dying. Repealing Net Neutrality Hastens That Death.

Let me remind you of the basic rule of titling breathless articles: begin with the phrase "the death of" or "the end of." When you read such a phrase, you can be sure that whatever it is, it is not dying.
Whatever it has been in the past, it is likely to be in the future. It is not facing the end.
Here is the logic of the screed.

The internet is dying.Sure, technically, the internet still works. Pull up Facebook on your phone and you will still see your second cousin’s baby pictures. But that isn’t really the internet. It’s not the open, anyone-can-build-it network of the 1990s and early 2000s, the product of technologies created over decades through government funding and academic research, the network that helped undo Microsoft’s stranglehold on the tech business and gave us upstarts like Amazon, Google, Facebook and Netflix.
Nope, that freewheeling internet has been dying a slow death — and a vote next month by the Federal Communications Commission to undo net neutrality would be the final pillow in its face.
Net neutrality is intended to prevent companies that provide internet service from offering preferential treatment to certain content over their lines. The rules prevent, for instance, AT&T from charging a fee to companies that want to stream high-definition videos to people.

The phrase "preferential treatment" is easy to define: high bid wins. It is the organizational principle of the auction.
The mainstream media are Keynesian to the core. The fundamental principle of the free market is this: high monetary bid wins. It is the principle of the auction. Liberals hate most auctions. Yes, they like auctions of incredibly overpriced and incomparably ugly art. They don't get upset when somebody pays $150 million to buy a piece of tripe painted by Picasso. That's their kind of stupidity. They like it. But they don't want the common people to have access to open markets. Open markets are only for the elite, in the view of America's Left.
They hate the principle of high bid wins because it lets people buy what they want at prices they are willing to pay for. They hate it because people who don't have enough money to buy everything they want, and who are therefore either unwilling or unable to pay for it, don't get to buy. That's what happens at every auction.
The screed officially favors underfunded producers. It doesn't favor the consumers, however. Consumers determine what they are willing to pay for. So, in the opinion of the mainstream media, little people must be protected by the federal government. It's the small start-up company that has not proven itself in the marketplace that must be protected. It is the hopeful outfit with little experience and not much money which must be protected.

Because net neutrality shelters start-ups — which can’t easily pay for fast-line access — from internet giants that can pay, the rules are just about the last bulwark against the complete corporate takeover of much of online life. When the rules go, the internet will still work, but it will look like and feel like something else altogether — a network in which business development deals, rather than innovation, determine what you experience, a network that feels much more like cable TV than the technological Wild West that gave you Napster and Netflix.

The author of course hates a monopoly. By monopoly, he means oligopoly. These oligopolies are highly competitive. Facebook competes against Twitter. Microsoft competes against Apple. Amazon competes against everybody. Facebook, Amazon, and Google are all planning to provide competing free Internet service to the Third World by means of high-altitude relay systems. They are going to make poverty-stricken people into lower middle-class people. This is monopoly in action. Oh, woe!

The five most valuable American companies — Amazon, Apple, Facebook, Google and Microsoft — control much of the online infrastructure, from app stores to operating systems to cloud storage to nearly all of the online ad business. A handful of broadband companies — AT&T, Charter, Comcast and Verizon, many of which are also aiming to become content companies, because why not — provide virtually all the internet connections to American homes and smartphones.Together these giants have carved the internet into a historically profitable system of fiefs. They have turned a network whose very promise was endless innovation into one stuck in mud, where every start-up is at the tender mercy of some of the largest corporations on the planet.

What the abolition of net neutrality means is this: a new birth of freedom. It means that high monetary bids will continue to win. It means those who want to pay for a service will be able to buy it. It means that the market process will enable consumers and producers to get together and work out mutually beneficial deals. This thought appalls liberals. It is the worst possible world for liberals.
The liberal media got their stranglehold after the federal government began to take over the airwaves in the mid-1920's. That stranglehold began to be eroded by satellite television in the 1970's. It began to be eroded by cable television in the 1980's. Today, this stranglehold is visibly weakening. The Internet has done it. Soon, when high-speed Internet services will be offered to the highest bidders, the mainstream media will lose even more money than they are losing today. Circulation rates are falling like stones for newspapers. Nielsen ratings for the three networks are falling. The three networks control nothing like what they controlled in the year 2000. They will continue to exist, but they will not throw off the gigantic revenues that they threw off from about 1930 until the year 2000. The days of wine and roses are over.

This was not the way the internet was supposed to go. At its deepest technical level, the internet was designed to avoid the central points of control that now command it. The technical scheme arose from an even deeper philosophy. The designers of the internet understood that communications networks gain new powers through their end nodes — that is, through the new devices and services that plug into the network, rather than the computers that manage traffic on the network. This is known as the “end-to-end” principle of network design, and it basically explains why the internet led to so many more innovations than the centralized networks that came before it, such as the old telephone network.

The Internet was designed by the Defense Department: DARPA. It was intended to secure communications after a nuclear attack on the United States. It had nothing to do with academia initially. Academics took advantage of it in the early days, before there were graphical user interfaces. This was before there was HTML. It was a researcher, Tim Berners-Lee, who invented the Internet back in 1990: HTML. The academics cried "foul!" when commerce began to take over the Internet. They were outraged. They were working for nonprofit outfits. Universities are academic oligopolies granted by the government. Most scientific research departments were heavily funded by the Defense Department. So, any talk about what the Internet was designed for that doesn't talk about government control by the military is blowing smoke. That's why I thought the image accompanying the article was accurate. It is literally a guy who is blowing smoke.
Liberals hate unrestricted businesses. Business serves the common man. It operates in terms of monetary high bid wins, which means it operates in terms of productivity and competition. Liberals want government control. They want sweetheart deals provided by the government. They want government subsidies. Net neutrality is a government subsidy. It restricts the ability of successful companies to deliver higher price services to the people who are willing to pay for these services.
Liberals hate large, profitable corporations. They like nonprofit, tax-exempt, subsidized organizations. These are the kinds of organizations that hire and then overpay bureaucratic liberals. Liberals don't like to compete in the marketplace. That's why they don't like business.

In 2003, Tim Wu, a law professor now at Columbia Law School (he’s also a contributor to The New York Times), saw signs of impending corporate control over the growing internet. Broadband companies that were investing great sums to roll out faster and faster internet service to Americans were becoming wary of running an anything-goes network.

If you think about what the Internet was in 2003, and compare that with what it is today, it's a whole new world. The efficiency, the benefits, and the tremendous services available today dwarf what the Internet was in 2003. I speak as someone who was online in 1996. This has been the period in which large corporations have become the major players in terms of the consumption of bandwidth. What we need is even more competition that is based on the principle of monetary high bid wins. We need this in every field that is associated with market competition. Liberals don't want it in any area except for rich men's auctions for modern art.
The auction process makes us richer. It increases our liberty. If you doubt this, read Part 1 of my book, Christian Economics: Teacher's Edition (2017). It deals with the auction process. Then read Part 2, which deals with the morality of the auction process.

Though it has been through a barrage of legal challenges and resurrections, some form of net neutrality has been the governing regime on the internet since 2005. The new F.C.C. order would undo the idea completely; companies would be allowed to block or demand payment for certain traffic as they liked, as long as they disclosed the arrangements.

That's all that anybody should ask for. Just list the terms of the agreement and the prices paid. I don't see any reason why the government should force even this on a company. It's none of the government's business. The fact that the FCC is abandoning this form of regulation is a testimony to the wisdom of the handful of Republican-appointed members of the FCC.
The author of the article admits that he is spouting the old Democratic Party line.

After all, people have been predicting the end of the internet for years. In 2003, Michael Copps, a Democratically appointed commissioner on the F.C.C. who was alarmed by the central choke points then taking command of the internet, argued that “we could be witnessing the beginning of the end of the internet as we know it.”

He realizes that he has a tough sales job. Nevertheless, he struggles on.

But look, you might say: Despite the hand-wringing, the internet has kept on trucking. Start-ups are still getting funded and going public. Crazy new things still sometimes get invented and defy all expectations; Bitcoin, which is as Wild West as they come, just hit $10,000 on some exchanges.Well, O.K. But a vibrant network doesn’t die all at once. It takes time and neglect; it grows weaker by the day, but imperceptibly, so that one day we are living in a digital world controlled by giants and we come to regard the whole thing as normal.

Net neutrality is going to be gone next year. If the Democrats take over Congress and the White House in 2021, then it may be reinstated. But between now and then, there is going to be far more liberty on the Internet than there is today. High monetary bids will win.