Confusion or deception @Cato? You make the call…
I’m a regular Cato@Liberty lurker but I’ve been buried in work and have been a little slow clearing out my feed reader’s backlog. I just came across ‘Net Wars, a Tom Firey post regarding the upcoming network neutrality debate. He started out with a solid summary, but once I read the analysis, I couldn’t believe my eyes…
His characterization of the neutrality issue is naive at best (perhaps he should consult his colleague Tim Lee). First he trotted out the tired asymmetry argument:
Notice the economic asymmetry that results: content providers benefit from the upgrades, but high-speed ISPs like Comcast and AT&T pay the cost. Such asymmetries open the way for consumer-harming inefficiency and mischief.
ISPs are in the business of piping content to homes across the country. For that, they charge a fee, usually flat and monthly, for an agreement of a certain service level. Whether this is fair or not matters not to the market for home broadband — they are passing bits along for dollars. If they don’t like the agreements (unlimited bandwidth) they have made with their customers, perhaps they should look at changing them. Going back to the older models of $/minute or $/bit probably wouldn’t fly with consumers in a competitive market, but what does this have to do with YouTube? They too have an ISP (several in many cases) and they too pay for their pipes. Moreover, they pay on a $/bit scale — if you want to argue that they’re getting a free ride for internet, take a look at their bandwidth bills sometime.
This argument wilts under scrutiny (or any due diligence on the part of Mr. Firey). To argue that content endpoints are “asymmetries” that can lead to “consumer-harming” inefficiency wreaks of ignorance. If there were no content endpoints, there’d be no one on the network in the first place, thus the telcos’ difficult and expensive job of passing packets would be exceedingly easier. It’s the network effects these content producers provide that compels consumers to shell out for those connections in the first place. This pity plea that the telcos are somehow being treated unfair is disheartening to anyone that believes in market forces (life ain’t fair).
But Firey was just getting warmed up. What really got my blood boiling was this:
The ISPs have responded to this situation by threatening to charge content providers for priority access. That is, a modest, text-driven website like Cato@Liberty, which doesn’t use much bandwidth, would likely go uncharged because it wouldn’t need priority service, but YouTube, with its bandwidth-consuming media streams, would need priority service and thus have to pay fees to the high-speed ISPs.
The content providers would prefer to avoid those fees, of course. They’re asking Congress to prohibit the ISPs’ proposal, and instead mandate “net neutrality” — ISPs giving equal priority to all Internet content, regardless of uneven bandwidth demand.
The contention that content providers are simply trying to “avoid” paying for their bandwidth goes beyond disingenuous and is provably false. As noted above, each and every one of them is paying (and happily, mind you) for every bit of traffic they send out. If by “avoiding those fees” he means the potential tolls on the other end of the connection, I’d love to know more about “the ISPs’ proposal” he speaks of. Other than a few off-the-cuff remarks, nothing has been proposed, formally or informally.
I too believe regulation is unnecessary and would most likely be counter-productive. These groups astroturfing about protecting the consumer on both sides should perhaps pay some attention to the lack of competition in the broadband space. Real competition (rather than how the FCC defines it) would ensure a worthy solution without any regulatory pitfalls.
That said, when weighing in on these issues, some care should be taken to actually understand them. Framing the debate in such a way does nothing but call into question the whole of Cato’s aptitude to comprehend the tech market and the policy debate around it. Firey’s decision, conscious or unconscious, to rely on the rhetoric and false premises of the telcos and their shills does nothing but damage its integrity and credibility.
What happened, Cato? You used to be cool…
Shame on you.