Net Neutrality: yay or nay? A pragmatic analysis

With the FCC chief planning to repeal Net Neutrality, the Internet is debating whether or not this is a good move by the current U.S. administration.

On one hand, deregulating allows for smaller government, leaving it to free market principles to regulate the behaviour of telecom companies.

On the other hand, this opens up the possibility of the big telecom companies who provide close to 100% of the Internet connectivity in the U.S. to throttle, block, and charge extra to access web content of their choosing.

Both are completely valid opinions, and rather than take a hard binary “for or against it” approach, it’s necessary to take a step back and recognize nuance and what pragmatically needs to be done in this situation.

Regulations generally are what enable corporations to become monopolies. Patents and regulations prohibit smaller businesses from competing by overwhelming them with red tape lest they face unaffordable regulatory fines and lawsuits.  Once regulations are in place, a point of no return is reached where removing the regulations will cause a lot of immediate harm by ceding full control to the monopolies. They can continue manipulating the economic landscape in their favour until sufficient competition arrives (this can theoretically be a very long time if the monopoly reinforces itself through endless acquisitions, lobbying for more government intervention and market manipulation). Once there is sufficient competition, free market principles can finally deter their monopolistic decisions.

We also have to recognize that while smaller government is desirable, no government isn’t. Government still needs to provide a role in a functioning society, otherwise it is just anarchy. Whether the government should be involved with the Internet assumes whether citizens and businesses as a whole depend on it as they do with power lines, roads, law enforcement and the military.

Put it this way: if a corporation owned the paved road leading from your house to your place of business and suddenly decided to start charging you exorbitant tolls for usage of that road, would that be considered a fair move and a free market?  Can another corporation somehow step in and provide you immediate alternatives otherwise?

If the infrastructure required to connect a household to any ISP hub was publicly owned like power lines and main roads, then repealing Net Neutrality is the right thing to do to minimize the size of government.  It would mean that smaller ISPs can compete if it was very quick and easy for customers to switch providers, reusing the same publicly owned infrastructure to connect to the new ISP. Right now may be a good starting point to divert some of the current public spending (particularly spending from useless government programs) to build or buy out existing infrastructure.

However, since most of the infrastructure is privately owned, repealing Net Neutrality at this point in time may not be the most pragmatic move to make.  The free market would still be able to sort it out eventually, but given most businesses and people’s daily reliance on the Internet, the impact would be too much in the short term. It would allow big telecom companies to dramatically and undesirably shape the economic landscape for the long term.

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