The Economics of Net Neutrality

[marmar]

from Dollars & Sense:


The Economics of Net Neutrality
First in an article series: MONEY YELLS!—Market Power and Corporate Control of Information.

BY ROB LARSON | JULY/AUGUST 2015


On February 26, 2015, the Federal Communications Commission (FCC) made a headline-dominating decision to regulate Internet providers through “net neutrality” principles, in a milestone for freedom of information and for popular activism. The Wall Street Journal reported that the decision was the outcome of opposing forces, both representing a “backlash.” The conservative paper had previously observed that if the agency moved forward with this regulatory stance, it would face a “Telecom Backlash” from Verizon, Comcast, AT&T, or their trade association, which had won court cases against the FCC’s earlier efforts to impose some net neutrality rules.

But the smashing victory was driven by another force that the Journal elsewhere called a “Public Backlash”—engaged people and activist groups who were often themselves unsatisfied by the FCC’s earlier positions. The FCC was swamped by the staggering volume of public comments filed—four million, with the press reporting that the “overwhelming majority of the comments supported common-carrier style rules,” the central requirement of net neutrality. The activist success in this backlash-off was importantly aided by the telecom industry’s own conflicting interests in the complex and rapidly evolving information marketplace, which created important opportunities for perceptive activists to exploit.

Not Neutering Net Neutrality

Net neutrality is the principle that data should be treated equally by network operators like Internet service providers (ISPs), the companies that transmit your online information packets through their cable or wireless services. This equality would rule out practices like an ISP blocking access to a website run by a competitor, or discrimination in service, where companies that can afford it get access to “fast lanes” that deliver their data more efficiently, while smaller sites that can’t cough up the money get relegated to the slow lanes.

A lack of net neutrality standards would have two broad consequences. One has to do with the prices paid for Internet access at reasonable speeds. The concern is that ISPs would create an “artificial scarcity” (see glossary sidebar) in information markets, allowing them to charge significant amounts to firms that can pay. Artificial scarcity describes to markets where production technology allows for an abundant supply, plenty to satisfy the consumption requirements for the whole market, but in which suppliers are able to restrict the amount produced. This often applies to markets characterized by intellectual property laws, like copyrights or patents, which limit lawful production to companies holding these licenses and thus possessing a monopoly. Profits are elevated with higher prices, but this cuts off some part of the market from consumption, making the product or service “artificially” scarce. For example, without net neutrality an ISP might charge streaming movie firms for faster service, leading those firms to raise their prices to a level that some consumers can’t afford. ................(more)

http://www.dollarsandsense.org/archives/2015/0715larson.html

[daybranch]

1. Net neutrality is the only free speech of any consequence left to most of the public

Net neutrality allows people to speak no matter their income. It allows ideas to appear in numbers reflective of the general support or disdain and is essentially the method of opening communication most despised by the rich class because they cannot buy it as they have politicians and older forms of main stream media.
Without net neutrality, Bernie Sanders could not possibly have a campaign and Hillary would have won due to shutting out of his views and unfair characterizations of his views and himself as a crazy socialist, when his ideas in fact are the same as progressives have supported for decades and which now represent the views of most Americans. Without net neutrality, these ideas spouted by a grandfather could not reach the millenials and the millenials would not be joined in collaboration with progressive activists of advanced age to give the people of this nation what they need and want, no matter their age, their gender, sexual orientation etc.. The attacks on net neutrality can never be overstated, they are a continuation of the oligarchy to control ideas and dissemination of ideals. Net neutrality is free speech and we must protect and expand it everywhere. It is now a linchpin of the fight for rule by the people rather than oligarchs. Attacks on net neutrality anywhere is an attack on democracy everywhere. Dictatorships all over the world revel in their ability to shut down the internet and block ideas. We must not let the oligarchy of the rich follow or lead that example as the case shall be.
Net neutrality is one of the powerful enabling mechanisms of democracy.