Sunday, March 23, 2008

Reconciling Net Neutrality with the Free Market

Politically, I like to think that I'm nothing if not "philosophically consistent". (This, by the way, is probably why I have a hang-up when it comes to both major parties).

But I've been wrestling with myself over Net Neutrality. I'm sure you've heard next to nothing on this issue from our presidential hopefuls, so here's a brief recap.

The Internet protocol was originally specified that all traffic was to be forwarded on a "best-effort per packet basis." This means that, on the Internet, a packet of data is a packet of data, and all intermediate hosts (the stops along the way between the data's sender and it's receiver) were to attempt to deliver it without any prejudice to it's content. For a very long time, this was a non-issue. It simply meant that you could not pick which sources or destinations got preference from you. In the 25 years since the writing of this protocol, something happened that nobody had forseen. Computers and routers became so fast that they could perform "stateful packet filtering" or "packet-shaping". This means that the routers were fast enough to crack open your packets and look at the type of information they were carrying. If your traffic type was deemed "less important" by the router, it could queue it up and send "more important" data first. This is a terribly handy tool for businesses concerned with their own data (it's positively essential for Voice-over-IP phones), and so is generally regarded as A Good Thing.

However, the big Internet Service Providers decided that they wanted to start doing it to their customers. They claim that it can boost the efficiency of their systems, and allow more favored traffic the right-of-way on their networks, even if that traffic didn't originate, or wasn't destined for, one of their customers. (It's just along for the ride on their infrastructure - the primary method of all Internet traffic). Detractors (myself among them) say that this amounts to censorship, and Comcast proved us correct when independent tests showed that they were blocking or delaying trasmission of BitTorrent packets, the chief method of Point-to-Point filesharing between end users. We defenders of Net Neutrailty further postulate that allowing ISPs and common carriers to packet-shape traffic will render the Internet into a more broadcast like medium, with "desirable" traffic from major media sources getting prime treatment, while "undesirable" traffic, from the likes of individuals, would get held up or lost. This in turn would turn us back into proper consumers of corporate-approved traffic, with individual voices squelched in favor of established media outlets, many of which are owned or affiliated with providers.

I'm looking at you, AOL Time Warner. *points menacingly*

Okay, so it's clear that I'm strongly in favor of Net Neutrality, Yet, at first glance, it doesn't seem to jibe with my generally Free Market libertarianism. This may not bother your average elected official, who eats philosophical inconsistencies each morning for breakfast, but it's been nagging the hell outta me. Usually, even my instincts are pretty rational, so when I came to what apeared to me to be an irrational paradox from two rational arguments (Net Neutrality is Good. Free Markets are Good. Net Neutrality is limiting to the Free Market), I decided to rethink the whole issue, and determine whether my analysis was flawed, or my conclusions.

Finally, on the way home from Easter dinner today, it came to me. Are there any circumstances under which I believe that government oversight should step in and correct markets? As it turns out, this is a pretty easy question for me to answer. Yes, there are. Governments should only interfere with markets for three reasons.

1) To prevent coercion by fraud: Corporate entities should not be able to misrepresent themselves or their products to the consumer. Advertising doesn't count as fraud to the more cynical among you. This doesn't seem to apply to Net Neutrality, though. The ISPs aren't lying about what they want to do.

2) The prevent coercion by force: At first glance, this is a pretty weak argument for Net Neutrality. I have some limited choice as to what Internet Service Provider I choose. Of course, if you run a few traceroutes to some different internet sites, check and see how often the same common carriers come up along the way. The argument gets stronger when you see how much traffic is routed through just a few carriers, any one of which could packet-shape your data into a trickle. Still, this isn't strong enough to settle my unease with my logical paradox.

3) To prevent predatory monopolistic effects: Bingo! I found what was bothering me. The ISPs aren't acting as competitive agencies fighting to provide the best services to their clients, they are acting in concert as an oligopoly to preserve a traditional market structure that is becoming obsolete, but is much preferable to them. Centralized broadcast media is challenged directly by independent and instantaneous access to publication through the Internet by individuals. They'd all be much happier if they could turn your web browser into a TV set, and feed you the content and advertising that they find most advantageous, and could leverage with their other business interests. If you think this sounds cynical, look at an AOL (Time Warner) subscriber's default homepage. Or Road Runner (Also Time Warner). Comcast. Name a major provider, and look at the internet experience they provide out of the box. It's built to hammer you with their ads and services every time you start up your browser. Hell, this isn't new. The music and movie industries have been collectively fighting a paradigm shift in their market with almost the exact same techniques. People want quick cheap and easy access to only the music they like, delivered right to their desktop. The technology can provide it, but the publishers wanted to protect their profits and maintain a grip on the editorial content of thier industry. The pick the music the radio plays, and they put Digital Rights Managment into their proprietary audio formats, so they can meet this demand halfway, or lose thier shirts to pirated MP3s.

Monopolies (and oligopolies) are an anathema to the Free Market, even though some technologies naturally drift towards them due to factors I won't go into here. But when those oligopolies combine to effectively force you into abiding by their provisions because they control the common carrier infrastructure, you can no longer avoid them with market choices. They own the infrastructure, they can feed you what's good for them, not what you choose. That is coercion by force, and it's a coercion agreed upon by corporate entities in their own collective best interest. That is when governments have to step in to protect against monopolistic practices.

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