Conspiracy Theorist: 3/17

Kiss America’s Internet goodbye

By Mark Luedtke

Americans lost the Internet today because of greed, selfishness and ignorance. There are exactly two ways to allocate resources in society. The first is through a voluntary, cooperative market based on demand from consumers and which ensures maximum benefit to all the people through pursuit of profit by providers. The second is through the use of coercion to maximize the benefit to the coercers. Yesterday, because the Internet was only lightly regulated, its scarce resources were allocated largely in the best interests of the people. As I write, the Federal Communications Commission (FCC) just stole that power from the people through heavy-handed regulation and gave it to our rulers using net neutrality as the excuse.

Net neutrality was always an absurd, politically motivated concept. The term was coined by Tim Wu, a professor of law at Columbia University, to benefit rulers. There’s no such thing as neutrality in a marketplace. It’s impossible. Net neutrality makes as much sense as road neutrality, retail neutrality, or grocery neutrality. Imagine if the federal government ordered road providers to allow equal access to the best locations to every business in the world, or every retail store to carry every brand of product and put them all in equally prominent places. Imagine if it ordered every grocery to sell every food item in the world and put them all in the best location in the store.

These demands are impossible because businesses and the products they sell are scarce resources. Businesses pay more for better locations on roads. Location, location, location is the mantra of business because businesses cannot occupy the same space at the same time. In the same way, Internet bandwidth is a scarce resource. My packets and your packets cannot occupy the same Internet space at the same time. Internet service providers (ISPs) must allocate those packets for maximum benefit. Allocation used to benefit the people. Now it benefits rulers because they, not consumers, are in control.

The most cited case in support of net neutrality is Comcast throttling Netflix. Last February the Washington Post fearmongered, “In recent months, the nation’s largest residential Internet service providers have been demanding payment to deliver Netflix traffic to their own customers. The Wall Street Journal reported Netflix has agreed to the demands of the nation’s largest broadband provider, Comcast. The change represents a fundamental shift in power in the Internet economy that threatens to undermine the competitive market structure that have served Internet users so well for the past two decades.”

ISPs including Comcast have a bandwidth problem. Netflix uses 32.7 percent of the Internet’s bandwidth, and it’s growing. Comcast slowed down Netflix and demanded Netflix share the burden of more infrastructure investment. Netflix understood the problem and agreed. Comcast, Netflix and consumers all won. This is no different than supermarkets demanding Nabisco pay for a prime location for its products.

As economist Ryan McMaken writes, “Yet again, the government wants to fix a problem that doesn’t exist. According to the Obama administration and the FCC, it is necessary to regulate Internet service providers so that they don’t interfere with people’s access to the web. The claim immediately prompts one to ask: Who is being denied access to the web?”

But bandwidth hogs didn’t like the Netflix deal because it put price pressure on their subscriptions. They didn’t want to pay extra for hogging scarce bandwidth. They wanted to take home all the groceries for themselves without regard for others. When that didn’t happen, because it couldn’t happen, like spoiled children, they demanded daddy government use coercion to make it happen.

We can expect the same consequences from Internet regulation as from all other regulation: a lower quality product at a higher price. If you thought Comcast and Time Warner’s service was crappy now, just wait.

Rulers have wanted to strangle the Internet for 20 years. Net neutrality’s useful idiots fashioned the noose. The Wall Street Journal wrote, “[With Net Neutrality,] bureaucrats can review the fairness of Google’s search results, Facebook’s news feeds and news sites’ links to one another and to advertisers. BlackBerry is already lobbying the FCC to force Apple and Netflix to offer apps for BlackBerry’s unpopular phones. Bureaucrats will oversee peering, content-delivery networks and other parts of the interconnected network that enables everything from Netflix and YouTube to security drones and online surgery.” While President Transparency is keeping the regulations secret, expect them to be applied not only to the Internet but also to cellphones, cable, and all digital communications.

Like all government bureaucracies, the FCC creates giant corporations, organizes them into a cartel, then crushes their competition. It’s ironic net neutrality advocates empowered the giant ISPs they hate at the expense of the people they claim to support.

Fortunately the FCC is a bureaucratic dinosaur restricted by U.S. borders while the Internet is an international medium evolving at the speed of ingenuity. American tech giants will leave or be surpassed by less regulated foreign tech companies. Soon the useful idiots will switch to blaming tech companies for moving overseas and taking jobs with them.

Mark Luedtke is an electrical engineer with a degree from the University of Cincinnati and currently works for a Dayton attorney. He can be reached at MarkLuedtke@DaytonCityPaper.com.

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Mark Luedtke
Reach DCP freelance writer Mark Luedtke at MarkLuedtke@DaytonCityPaper.com.

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