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Who Runs the Internet: What Lobbying Is Really All About

You’ll be hearing a lot today and tomorrow about an issue bubbling over in Washington called “net neutrality.” You’re probably aware of the concept of “stickiness” — an idea or concept that stays with you no matter what. “Net neutrality” is an example of an “anti-sticky” idea.  No matter what you do, you can’t remember what the hell it is.

So rather than trying to understand the issue’s confusing contours, you should instead look at the key question: who benefits? The truth is that net neutrality is about who controls broadband — the pipe through which we now connect to the Internet. Internet service providers, who bring us broadband, naturally want to control the pipe. That seems logical; it’s their pipe. But companies providing the content that goes through the pipe don’t want the Internet service providers to exert that control, because they fear the providers could figure out ways to secure an advantage for content the providers own. That also seems like a reasonable concern.

The providers say that a) they don’t know how to do what the companies fear they will do, and b) there’s so much competition in the field that it wouldn’t matter anyway, because if they were to restrict access to their pipe, a consumer could just go elsewhere for his service. The first point smacks of disingenuousness because, of course, there are ways to privilege certain kinds of content and block others, even now. The second, competitive point is the most important one. Free-market theory says plainly that we should not expect any one provider of a good to act in service of the broader public interest; his goal is to maximize his own profit. The force that disciplines him, controls his appetite, and compels him to behave in responsible ways is competition — that’s what guides the “invisible hand,” in Adam Smith’s Olympian image.

So what case do the content providers have? Their case is that the Internet is not a marketplace but a combination of a Wild West in which nobody is making the rules and an oligarchy in which a few powerful behemoths have managed to secure unlimited control. This is an illogical argument — a system can’t simultaneously be anarchic and authoritarian — but it is a powerful one, in the sense that the only thing we care about when it comes to the Internet is the content. We don’t care about the pipe; we care about the water that comes through the pipe. Any force that limits our access to the water is a force that cannot be tolerated.

The Obama FCC, led by Julius Genachowski, has come down on the side of the Web companies. They are the ones who are demanding “net neutrality.” The FCC is about to declare itself the regulator of the Internet pipe, a role it now says it has the constitutional right to assume despite earlier Court rulings suggesting otherwise. Conservatives, viewing this as a huge power grab by the federal government, have tended to lean in the other direction.

The truth is, it could have gone either way. Conservatives could have viewed the providers as uncompetitive players whose positions are due in some part to the fact (especially in the case of cable companies) that they were granted monopoly roles by state and local governments, giving them unfair  access to 100 million homes. Liberals could have viewed the Web companies as greedy businesses seeking to use the leverage of state power to seek mercantilist advantage over rival greedy businesses.

But they didn’t. The sorts of businesses most keenly interested in net neutrality in the early 2000s ended up being liberals and Obama supporters, while the old lions were doing business in a Washington dominated by Republicans and saw that the best way for them to get leverage was to push the conservative competition argument while throwing dollars all over the place.

In the end, then, there’s a reason it’s impossible to listen to arguments over net neutrality without falling asleep. This is simply an act of corporate gamesmanship in which one player wishes to use the leverage of the federal government to secure an advantage over another player. The reason it has traction now is that there is an administration eager to play as direct a role in the economy as it can. What was intellectually seductive for Republicans was the idea that competition was working in the world of broadband and government shouldn’t interfere. What is intellectually seductive for Democrats like Genachowski is the idea that government has to step in to make sure everything is fair.

So in the end, how you feel about this issue gets to whether you think government should, on balance, do more or should, on balance, do less. It’s the fundamental divide between right and left. And that’s why net neutrality, despite how unbelievably boring it is, matters, and why it should not be imposed, and why the courts should not stand by while the FCC widens its authority over private industry.



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