Friday, June 09, 2006

On Net Nuetrality

The House rejected, I think, the very first regulation of the Internet. I have opposed the regulation and you can read some of my views by reading the comments to Kip’s posts here and here.

My opposition was based primarily on two grounds. First, it is much easier to implement regulation after harm has actually been done than it is to remove regulation later on. The principle proponents of “net neutrality” seemed to base their entire argument on the fact that “very bad things might happen.” I share Greg Mankiw’s skepticism of people that use alarmism as a defense of policy views.

The second reason for my opposition is that I just don’t think it makes any sense. The Internet is, essentially, just a delivery mechanism. I think the phrase “Internet Super-Highway” is an apt description and provides the best analogy to the internet. Retailers depend on roads and highways for their ability to sell us goods and services, and retailers that have easy access have a clear advantage over retailers that are out of the way.

What anyone complain that a shopping mall paid to have a 4-lane highway built so that shoppers would have an easier time getting to their location? What would happen if government decided that access to all stores had to be “neutral?” Does anyone honestly think that we would have 4-lane highways to every store? Of course not, we would have inadequate access to everywhere.

In fact, the system that drives highway expansion is worse than what Internet carriers are proposing. Highway access is decided by government bureaucrats, government decides where they think we want to go – a process that has long been the realm of rent-seekers and corruption.

What the internet allows is the market to decide where we want to go. Companies that think they can profit from faster highways are given an opportunity to pay for them, those that do not think they can benefit take the standard service.

I, for one, would rather live in a world with some super-highways than a world of two-lane roads and I am glad that Congress has, for now, allowed it to happen.

More smart people weigh in here and here to oppose net nuetrality.

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