Wednesday, December 06, 2017

Libertarians are against net neutrality

This post claims to be by a libertarian in support of net neutrality. As a libertarian, I need to debunk this. "Net neutrality" is a case of one-hand clapping, you rarely hear the competing side, and thus, that side may sound attractive. This post is about the other side, from a libertarian point of view.



That post just repeats the common, and wrong, left-wing talking points. I mean, there might be a libertarian case for some broadband regulation, but this isn't it.

This thing they call "net neutrality" is just left-wing politics masquerading as some sort of principle. It's no different than how people claim to be "pro-choice", yet demand forced vaccinations. Or, it's no different than how people claim to believe in "traditional marriage" even while they are on their third "traditional marriage".

Properly defined, "net neutrality" means no discrimination of network traffic. But nobody wants that. A classic example is how most internet connections have faster download speeds than uploads. This discriminates against upload traffic, harming innovation in upload-centric applications like DropBox's cloud backup or BitTorrent's peer-to-peer file transfer. Yet activists never mention this, or other types of network traffic discrimination, because they no more care about "net neutrality" than Trump or Gingrich care about "traditional marriage".

Instead, when people say "net neutrality", they mean "government regulation". It's the same old debate between who is the best steward of consumer interest: the free-market or government.

Specifically, in the current debate, they are referring to the Obama-era FCC "Open Internet" order and reclassification of broadband under "Title II" so they can regulate it. Trump's FCC is putting broadband back to "Title I", which means the FCC can't regulate most of its "Open Internet" order.

Don't be tricked into thinking the "Open Internet" order is anything but intensely politically. The premise behind the order is the Democrat's firm believe that it's government who created the Internet, and all innovation, advances, and investment ultimately come from the government. It sees ISPs as inherently deceitful entities who will only serve their own interests, at the expense of consumers, unless the FCC protects consumers.

It says so right in the order itself. It starts with the premise that broadband ISPs are evil, using illegitimate "tactics" to hurt consumers, and continues with similar language throughout the order.


A good contrast to this can be seen in Tim Wu's non-political original paper in 2003 that coined the term "net neutrality". Whereas the FCC sees broadband ISPs as enemies of consumers, Wu saw them as allies. His concern was not that ISPs would do evil things, but that they would do stupid things, such as favoring short-term interests over long-term innovation (such as having faster downloads than uploads).

The political depravity of the FCC's order can be seen in this comment from one of the commissioners who voted for those rules:
FCC Commissioner Jessica Rosenworcel wants to increase the minimum broadband standards far past the new 25Mbps download threshold, up to 100Mbps. "We invented the internet. We can do audacious things if we set big goals, and I think our new threshold, frankly, should be 100Mbps. I think anything short of that shortchanges our children, our future, and our new digital economy," Commissioner Rosenworcel said.
This is indistinguishable from communist rhetoric that credits the Party for everything, as this booklet from North Korea will explain to you.


But what about monopolies? After all, while the free-market may work when there's competition, it breaks down where there are fewer competitors, oligopolies, and monopolies.

There is some truth to this, in individual cities, there's often only only a single credible high-speed broadband provider. But this isn't the issue at stake here. The FCC isn't proposing light-handed regulation to keep monopolies in check, but heavy-handed regulation that regulates every last decision.

Advocates of FCC regulation keep pointing how broadband monopolies can exploit their renting-seeking positions in order to screw the customer. They keep coming up with ever more bizarre and unlikely scenarios what monopoly power grants the ISPs.

But the never mention the most simplest: that broadband monopolies can just charge customers more money. They imagine instead that these companies will pursue a string of outrageous, evil, and less profitable behaviors to exploit their monopoly position.

The FCC's reclassification of broadband under Title II gives it full power to regulate ISPs as utilities, including setting prices. The FCC has stepped back from this, promising it won't go so far as to set prices, that it's only regulating these evil conspiracy theories. This is kind of bizarre: either broadband ISPs are evilly exploiting their monopoly power or they aren't. Why stop at regulating only half the evil?

The answer is that the claim "monopoly" power is a deception. It starts with overstating how many monopolies there are to begin with. When it issued its 2015 "Open Internet" order the FCC simultaneously redefined what they meant by "broadband", upping the speed from 5-mbps to 25-mbps. That's because while most consumers have multiple choices at 5-mbps, fewer consumers have multiple choices at 25-mbps. It's a dirty political trick to convince you there is more of a problem than there is.

In any case, their rules still apply to the slower broadband providers, and equally apply to the mobile (cell phone) providers. The US has four mobile phone providers (AT&T, Verizon, T-Mobile, and Sprint) and plenty of competition between them. That it's monopolistic power that the FCC cares about here is a lie. As their Open Internet order clearly shows, the fundamental principle that animates the document is that all corporations, monopolies or not, are treacherous and must be regulated.

"But corporations are indeed evil", people argue, "see here's a list of evil things they have done in the past!"

No, those things weren't evil. They were done because they benefited the customers, not as some sort of secret rent seeking behavior.

For example, one of the more common "net neutrality abuses" that people mention is AT&T's blocking of FaceTime. I've debunked this elsewhere on this blog, but the summary is this: there was no network blocking involved (not a "net neutrality" issue), and the FCC analyzed it and decided it was in the best interests of the consumer. It's disingenuous to claim it's an evil that justifies FCC actions when the FCC itself declared it not evil and took no action. It's disingenuous to cite the "net neutrality" principle that all network traffic must be treated when, in fact, the network did treat all the traffic equally.

Another frequently cited abuse is Comcast's throttling of BitTorrent.Comcast did this because Netflix users were complaining. Like all streaming video, Netflix backs off to slower speed (and poorer quality) when it experiences congestion. BitTorrent, uniquely among applications, never backs off. As most applications become slower and slower, BitTorrent just speeds up, consuming all available bandwidth. This is especially problematic when there's limited upload bandwidth available. Thus, Comcast throttled BitTorrent during prime time TV viewing hours when the network was already overloaded by Netflix and other streams. BitTorrent users wouldn't mind this throttling, because it often took days to download a big file anyway.

When the FCC took action, Comcast stopped the throttling and imposed bandwidth caps instead. This was a worse solution for everyone. It penalized heavy Netflix viewers, and prevented BitTorrent users from large downloads. Even though BitTorrent users were seen as the victims of this throttling, they'd vastly prefer the throttling over the bandwidth caps.

In both the FaceTime and BitTorrent cases, the issue was "network management". AT&T had no competing video calling service, Comcast had no competing download service. They were only reacting to the fact their networks were overloaded, and did appropriate things to solve the problem.

Mobile carriers still struggle with the "network management" issue. While their networks are fast, they are still of low capacity, and quickly degrade under heavy use. They are looking for tricks in order to reduce usage while giving consumers maximum utility.

The biggest concern is video. It's problematic because it's designed to consume as much bandwidth as it can, throttling itself only when it experiences congestion. This is what you probably want when watching Netflix at the highest possible quality, but it's bad when confronted with mobile bandwidth caps.

With small mobile devices, you don't want as much quality anyway. You want the video degraded to lower quality, and lower bandwidth, all the time.

That's the reasoning behind T-Mobile's offerings. They offer an unlimited video plan in conjunction with the biggest video providers (Netflix, YouTube, etc.). The catch is that when congestion occurs, they'll throttle it to lower quality. In other words, they give their bandwidth to all the other phones in your area first, then give you as much of the leftover bandwidth as you want for video.

While it sounds like T-Mobile is doing something evil, "zero-rating" certain video providers and degrading video quality, the FCC allows this, because they recognize it's in the customer interest.

Mobile providers especially have great interest in more innovation in this area, in order to conserve precious bandwidth, but they are finding it costly. They can't just innovate, but must ask the FCC permission first. And with the new heavy handed FCC rules, they've become hostile to this innovation. This attitude is highlighted by the statement from the "Open Internet" order:
And consumers must be protected, for example from mobile commercial practices masquerading as “reasonable network management.”
This is a clear declaration that free-market doesn't work and won't correct abuses, and that that mobile companies are treacherous and will do evil things without FCC oversight.

Conclusion

Ignoring the rhetoric for the moment, the debate comes down to simple left-wing authoritarianism and libertarian principles. The Obama administration created a regulatory regime under clear Democrat principles, and the Trump administration is rolling it back to more free-market principles. There is no principle at stake here, certainly nothing to do with a technical definition of "net neutrality".

The 2015 "Open Internet" order is not about "treating network traffic neutrally", because it doesn't do that. Instead, it's purely a left-wing document that claims corporations cannot be trusted, must be regulated, and that innovation and prosperity comes from the regulators and not the free market.

It's not about monopolistic power. The primary targets of regulation are the mobile broadband providers, where there is plenty of competition, and who have the most "network management" issues. Even if it were just about wired broadband (like Comcast), it's still ignoring the primary ways monopolies profit (raising prices) and instead focuses on bizarre and unlikely ways of rent seeking.

If you are a libertarian who nonetheless believes in this "net neutrality" slogan, you've got to do better than mindlessly repeating the arguments of the left-wing. The term itself, "net neutrality", is just a slogan, varying from person to person, from moment to moment. You have to be more specific. If you truly believe in the "net neutrality" technical principle that all traffic should be treated equally, then you'll want a rewrite of the "Open Internet" order.

In the end, while libertarians may still support some form of broadband regulation, it's impossible to reconcile libertarianism with the 2015 "Open Internet", or the vague things people mean by the slogan "net neutrality".

3 comments:

Paul Wagenseil said...

Hey Rob -- some support here -- in a 2002 paper, Tim Wu explicitly endorsed throttling high-bandwidth users in the interests of network management, seeing it as preferable to outright blocking bandwidth-gobbling applications: http://www.timwu.org/OriginalNNProposal.pdf

His example was MMORPGs rather than BitTorrent or video streaming, but he's pretty clear: "a carrier concerned about bandwidth consumption would need to invest in policing bandwidth usage, not blocking individual applications. Users interested in a better gaming experience would then need to buy more bandwidth – not permission to use a given application."

Number 6 said...

Rob,

There is one thing that a lot of people I know who are Libertarians forget. Corporations will get away with anything they want in the name of profit. this has been shown time and time again over the last 100+ years. Sometimes the immediate solutions works and then has to be changed, sometimes not. The point is that if you think Corps have their customers best interests at heart, you are kidding yourself. They have their bottom line at heart (as was recently shown on Wall Street when talking to the white house about the upcoming corporate tax breaks and how the majority would not use that break to reinvest in the company).
Now while I agree that Obama's order and the reclassification is wrong, there needs to be some way of preventing unfair competition on the Net. The FTC /should/ fill that role, but they are so backed up and even more bureaucratic so any protection will take forever.
The issue I have with the FCC's ruling is stripping the state's power to regulate away in this case. As you are a libertarian, you should appreciate the power going back to the state and local governments, not stripped from them. Yes, it means a patchwork like the sales tax, or firearms card, instead of a homogeneous solution, but at least then there is a way of putting companies on notice.

Siegfried Kiermayer said...

Comcast doesn't has to throttle any service at all. They only need to throttle the enduser regardless of what the enduser is doing.

When i buy 100mbit/sec i buy 100mbit/sec through comcast network. I even pay MORE for more bandwith and less for less bandwith.

It doesn't make sense at all to have a volume. After all if everyone decides to use there cap at primetime, nothing is won.

They could and they should sell me guaranteed bandwith + additional bandwith with x% availablity.

Than i can do what i wanna do with my reserved and paid bandwith and can use the additional whenever i like.

It is not hard at all to not overprovision. I can't sell 50 x 100mbit/s bandwith on one streetendpoint when the streetendpoint only has capacity for 10 x 100mbit/s.