#netneut Goes To Court

The upcoming court decision for net neutrality will be interesting.  U.S. Telecom Association v. FCC is the pending case.

I was not a fan of the decision to allow the FCC to regulate the internet.  I’d have preferred a solution that opened up more spectrum, and redoing existing regulations to make sure that competition flourished intensely.

Certainly, having a few massive corporate giants that create oligarchy is not good long term for innovation and freedom.  We see it again and again in anything that government over regulates.  Banking, Insurance, Farming, Education, Energy you name the heavily regulated vertical and we can all name the mega companies that dominate it.  We can also show how the regulations are used to stamp out potential competitors which lead to the creative destruction of the oligarchy.  Professor George Stigler mathematically showed how more government regulation leads to larger companies-and they lobby for even more regulation to protect their businesses.

In this case, T-Mobile wanted to roll out a new service, Binge On.  Video would stream for free without using your data.  Nice for big consumers of video online.  But, also nice for apps like Periscope and Meerkat which consume data when people use them.

The core of the problem is the language.  The FCC wants to decide what’s “fair and reasonable”.  However, as we have seen in plenty of other arguments, what’s fair and reasonable is subject to a wide interpretation.  It all depends on who is interpreting it, and as is often the case with government, who is putting the strong arm on them behind the scenes.   There is no such thing as an impartial government angel that miraculously makes unbiased decisions for the good of the people.

L. Gordon Crovitz writes,

The Internet succeeded because it was unregulated. If Obamanet had been in effect, newspapers would have objected to Google as “unfair.” Wall Street might have forced Steve Jobs out if the government deemed “unreasonable” his idea to include a Web browser in Apple’s mobile phones. Investors could have nixed the disruptive messaging service WhatsApp for fear it would be held to violate a “general conduct rule.”

When government sets policy, it often picks winners and losers.  Crony capitalism is a terrible drain on our economic system.  Politicians pursuit of office is done under the guise of helping people.  The reality is they want to retain power, consolidate power, and help themselves.  For evidence, look at how elected officials like Illinois House Speaker Michael Madigan and Chicago Alderman Ed Burke use power to line their pockets in Illinois.  They are not alone, and Illinois isn’t the only place where this practice is done-but it certainly was perfected there.

The unregulated free market is the best place for innovators and consumers to allocate their own personal resources to see who survives and thrives, and who fails.  Creative destruction is good for America, and good for Americans.