Fallacies of Net Neutrality

“As there is no real problem with the Internet, it’s not surprising that some of our top minds have been working diligently on a solution.”

David Harsanyi wrote that at Reason this May and argued against the proposition of mandating “neutrality” on the Web in the same article.

The problem, according to proponents of “net neutrality”, is that large companies, Google and Microsoft for instance, would soon be able to afford faster delivery of their content at the disadvantage of smaller companies and startups. That is unfair, says the Federal Communications Commission (FCC) and it is considering regulation that would ensure equal access for all Internet companies.

As Harsanyi puts it, that “makes as much sense as mandating that tricycle riders have the same rights and privileges as cars and trucks on our roads—highway neutrality.”

The FCC promises it doesn’t have any intention of controlling Internet content, only of making access fair. But empowered with the ability to regulate the flow of online traffic, it offers a semantic, not substantive, excuse for a power grab.

Peter Suderman, also with Reason, has similarly been arguing against net neutrality. He sees no reason to worry. “If anything, it seems like consumers would benefit from larger web providers being able to offer nifty, advanced services that a smaller competitor might not be able to afford.”

He isn’t convinced that the theoretical tiny competitor’s inability to pay for speedier service is a concern serious enough to warrant regulatory meddling. “Think of how FedEx and UPS operate,” he suggests. “Some customers pay to have their packages delivered to their destinations faster, yet no one thinks of this as harmful to those who choose regular speed delivery. Why should it be any different with ISPs [Internet service providers], which are essentially delivery networks for data rather than physical goods?”

Startups always face long odds against entrenched competitors, which is why the majority of new businesses fail relatively quickly. But the best startups compete through genuine innovation, not by taking advantage of government enforced business model barriers.