NET NEUTRALITY IS NOT NEUTRAL

If you have not yet figured out that “net neutrality” is textbook propaganda through the re-definition of words, you need to get up to speed in a hurry.  (Recommended source:  everything on the topic written by L. Gordon Crovitz for the Wall Street Journal over the latest few years – e.g., “What a Tangled Web Obama Weaves” in today’s (11/17/14) edition.)   Propaganda, remember, is the use of facts or ideas, often false or exaggerated, to advance a political cause. The fundamental falsehood of “net neutrality” is that it is neutral, or fair.  On the contrary, what “net neut” does is to put the Internet at the mercy of the rankest form of governmental control and manipulation – including the picking of winners and losers – and thus to ensure that the financial outcomes of the provision of internet service are different from the outcomes that would ensue from the application of the market forces of supply and demand.   Friedman and Hayek would be appalled, and you should be, too.

The essence of the implementation of Net Neut would be for the FCC to reclassify the Internet, to make it a utility under Title II of the Communications Act of 1934,  a classification that, when applied to AT&T a long time ago, eventually necessitated its breakup in the 1980s because it had become a bloated, inefficient obstacle to the development of technological advancement in telecommunications services.   Under Title II, the feds would be given authority to approve, prioritize, and set “just and reasonable” prices for broadband.   In other words, this is governmental price-fixing, just as with AT&T, just as in the infamous Nixon Price Controls catastrophe that caused the shortages and gas-station riots of the early 1970s.    For that matter, just as in Russia and China and every other planned,  statist economy in the world.  Not only that, the switch, as Crovitz points out, would trigger a hidden tax of 16.1% of interstate revenues from the provision of internet service.  Key providers of enormous amounts of Internet service (e.g., Netflix and YouTube, which utilize more than 50% of all US Internet service during peak hours), would be barred from “paid prioritization” (paying extra fees for getting faster lanes for internet usage), which could radically affect their financial models.  Yes, Netflix is not necessarily an innocent victim here, but don’t get drawn into the elaborate cat fights as government regulation turns everyone into a rent-seeker who does not have “clean hands” in the debate; each of the Net Neut proponents, and each more- or less- co-opted supporter, appears confident that it can construct a Rube Goldberg contraption that works better than free markets.  This is a shell game, and each player seems confident that the public (Jonathan Gruber’s “too stupid” public) cannot keep track of the pea.

There would be exceptions and gradations, as the micromanagement model came to fruition in the context of our modern-day mix of crony capitalism and corruption, but that only fills in the picture of how a socialistic, planned economy really operates.  The principal business of business becomes the evasion/avoidance of governmental regulation, rather than old-fashioned increases in productivity, revenues, and profits. Already there are numerous precedents, as Net Neut – as has already been observed by many – is to information-technology and telecommunications what ObamaCare is to healthcare:  the nationalization of an entire industry.  See also what is being . done in banking and finance.

This is way more serious than most people think.  In particular, all of this seems to come as a surprise to a surprisingly large number of techies and other people who earn their livelihood from developing or working with Internet-based resources – especially if they are young lefties, clueless when it comes to matters involving free markets and other freedoms they so ignorantly and ungratefully exploit in modern America.

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