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Danger! Kibitzers at Work

By 14 December 2010 5 Comments

The Free Press recently took the lead in drafting a letter to the FCC expressing concern that whatever Net Neutrality rule the agency issues next week will not be enough, and laying out its demands for true openness: Paid prioritization must be outlawed; wireless included; definitions made “loophole-free”;  any specialized services segregated from the bulk of the Internet; and FCC broadband policy placed on a sound legal footing.

The letter collected endorsements from 82 organizations, including, besides Free Press, such names as Acorn Active Media Foundation, Center for Digital Democracy, Mobile Commons, Friends of the Earth, DailyKos, and UCal San Diego Music Department.

Several things are noteworthy about the list of signatories. None of them is at all involved in providing Internet services, access, equipment, or anything at all related to actual productivity. All look to be non-profits of various sorts, and thus not involved in the market economy. Most appear to be left wing, potential endorsers of Eben Moglen’s famous dotCommunist Manifesto. And, judging by their titles, none of them actually knows anything about the technical or economic dimensions of the Internet.

Whenever I read commentary by George Ou or Richard Bennett or Andrew Odlyzko, I am impressed by how little I understand about the incredibly complex ecosystem called the Internet, and real experts such as these are extremely cautious in their predictions. As Odlyzko says in The Manifold Problems of Technology Forecasting, “in many, even most, cases, what people do with a technology differs widely from what the inventors had in mind.” He cites examples of mis-prediction, such as the universal confidence that the railroad would kill off the horse as a technology, which turned out to be dead wrong. The number of horses increased, right up to 1905, because they were the solution to the first/last mile problem.

So I am baffled as to how people who know no more than I can be so confident in their prescription about institutional arrangements. When I look at the specific prescriptions, I grow even more baffled.

For example, take the ban on “paid prioritization.” Does this mean that a hospital cannot pay for a special link to ensure continuing connection for open heart conducted via telemedicine, that the surgeon must stay his scalpel while the latest batch of YouTube videos goes by? Or, in general, that the different needs of the different types of service cannot be taken into account, for money? That seems stupid.

What about paid de-prioritization? Could a movie provider offer a cut-rate service if you download overnight on a low-priority basis? Indeed, is that the movie provider’s choice, or should it be the carrier that offers that service, since it is the carrier’s infrastructure that is affected – the content provider’s role may be done once the material is in the hands of the CDN.  Why shouldn’t people be able to tailor their payments to their self-assessed level of need?

Is it possible that the people in the Free Press’s coalition do not understand that price discrimination can serve everyone’s interest? For example, the amount an airline charges for first class exceeds the marginal cost of providing the extra service, so the coach passengers benefit because the first-class passengers contribute extra to the basic costs of the flight.  The Internet may well offer comparable opportunities, where carriers will be happy to provide low value services at only a tad more than their marginal cost because they contribute to paying the overhead by using capacity that might otherwise be wasted. Such services will not be provided if they would displace higher-value ones, which means less traffic to share the overhead, to the detriment of all users.

And is it possible that these people simply do not understand the role of markets and payments in improving human choice and efficiency? One example of which I am fond is the decision to make bumping passengers off of overbooked flights into an economic decision, to the great benefit of all, especially the passengers.

I do not really mind if kibitzers have an opinion on the game, but there is not much reason to pay attention to them if they do not even know what game they are watching. So let the players work their way through the issues as they work out in real world practice, with the FCC watching to be sure the game does not get out of hand, but without trying to predict the unpredictable in a highly fluid and uncertain situation.

Image from Navy Historical Center.

5 Comments »

  • George Ou said:

    Would be nice if the FCC would publish the draft so that the public can debate it. At this point, seems like it’s only leaked to a few organizations.

  • Brett Glass said:

    And those organizations seem to be the ones which have lobbied in favor of onerous regulation.

  • George Ou said:

    Is it even the entire UC San Diego Music Department or just one person there?

  • Tech at Night: Free Press, FCC, Net Neutrality, Comcast, Level 3, OpenBSD, Wikileaks said:

    [...] seriously, Acorn Active Media Foundation being for radical action is all we should need to know. They’re one of the few remaining allies that the crass [...]

  • Garrett said:

    James,

    Again I love this idea! Make ISPs assign a value to their discrimination and “network management”! But also recall it wasn’t until government made them that the airlines did this (iirc)… and the reporting requirements I’ve been hearing about concerning network management would obviously be required to make this happen.

    I would love to see decisions to filter and “manage” networks carry an economic consequence! Please keep supporting this!

    Very Respectfully,
    Garrett Heaton