Freedom didn’t make the Internet, Regulation did

September 28, 2007

Over at Obsidian Wings, Publius also writes about that series of tubes known as the Internet, and why deregulating those tubes is a bad idea.

To understand Uncle Ted’s point, imagine that Congress was debating whether to privatize the federal interstate highway system. And let’s say that Rep. Joe Barton (R-Comcast) justified privatizing our roads on the House floor by citing the rich diversity on our highways. Regulation, Barton argues, is no longer necessary because multiple trucking companies compete for our business; multiple car companies compete; etc. This argument, however, ignores an important point. We have lots of trucks and cars because there are federal laws that secure access to the highway (i.e., the underlying network infrastructure). Competition on the top “layer” cannot justify eliminating the “lower-layer” regulation that makes this competition possible in the first place.

The same principles apply to communications networks. Yes, the Internet is a richly diverse place. But that competition was made possible by underlying common carrier regulation – i.e., access to the tubes. In the old Computer Inquiries proceedings, the FCC regulated and secured access to the underlying physical networks (i.e., the highway), but left the higher-level services unregulated. Thus, when people say that the Internet’s success stems from the lack of regulation, that’s completely and utterly false. The Internet exists today because of regulation. [ It's the Tubes, Stupid ]

The existing networks were built with subsidies and grants and tax breaks. The underlying technologies of the Internet were (mostly) developed on the taxpayer dime. Removing Net Neutrality turns the right to control all of that — stuff we paid for because it served the common good — over to for-profit ventures.

These providers argue that they must have this so they have the incentive to improve and expand the infrastructure. In other words, to have a speedier Internet we must trade our right to publish on it. There’s another solution, though, and it’s worked before:

Although nearly 90 percent of urban dwellers had electricity by the 1930s, only ten percent of rural dwellers did. Private utility companies, who supplied electric power to most of the nation’s consumers, argued that it was too expensive to string electric lines to isolated rural farmsteads. Anyway, they said, most farmers, were too poor to be able to afford electricity.

The Roosevelt Administration believed that if private enterprise could not supply electric power to the people, then it was the duty of the government to do so. Most of the court cases involving TVA during the 1930s concerned the government’s involvement in the public utilities industry. [ Rural Electrification ]

The rural electrification project was a roaring success and had an enormous positive impact on local and national economies. The utility companies, who had refused to meet the demand, were the major obstacle to this growth.

We’re faced with the same thing now. Our infrastructure is stagnant because the utility companies refuse to invest in it; they have no incentive to do so. They have to have control over the content, they say. Then they will have reasons to make faster networks.

I think we should do it without them.

Posted in Technology