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Net Neutrality: Send in the Clowns

By 12 January 2011 2 Comments

A consortium of anti-public interest organizations (Free Press; Center for Media Justice; Media Access Project; Open Technology Initiative; New America Foundation; Presente.org) has just petitioned the FCC to act against a new package of 4G LTE services put together by MetroPCS, the nation’s fifth largest mobile phone carrier, which operates non-contract plans in nine major metropolitan areas. (Boston, Dallas-Fort Worth, Detroit, Las Vegas, Los Angeles, New York City, Philadelphia, Sacramento and San Francisco.)

The new offering has three levels, at $40, $50, $60/month. The first offers “unlimited talk, text, 4G Web browsing with unlimited YouTube access.”  The next level contains additional navigational, texting, and video/audio access, and the highest level  adds more data access and some premium services.

One’s logical reaction is “Wonderful! Consumer choice!” One of the great things about the free market is its propensity to slice and dice so as to tailor offerings to the precise desires of various groups of customers. The paradigm is real estate, which offers home ownership, condominiums, short- and long-term leases, hotel rooms by the night (or hour), licenses of many kinds, easements, life estates, remainders vested and contingent, and so on, with offerings to suit every need and taste.

The MetroPCS offering is in the same category. A firm is calculating consumer desires and tailoring its offerings to match. It will succeed to some degree and fail to some, and adjust, other firms will copy and adapt, and the process will go on.  What with MetroPCS being only Number 5, it is logical and good that it will dream up innovative schemes.  A #5 cannot compete as a commodity offeror against other firms with better economies of scale, and the last thing any purported proponent of competition should want is to force firms to become commodities, with all offering identical packages.

But this is not world of the consortium, and in its letter to the FCC the nonsense falls like drifting snowflakes. Offering consumer a series of options not provided by other carriers “stifles competition, consumer choice, and innovation.” Special deals with apps such as YouTube, Skype, or Netflix, are seen not as tailoring price and package to what consumers want but as cynical devices directed at “adding the company’s bottom line.” (MetroPCS wants to make a profit and stay in business by satisfying customers; oh, the horror.)

Writing at Technology Liberation Front, Adam Thierer of Mercatus analyzes the letter in more detail, noting that:

(1) The ink isn’t even dry on the FCC’s Net neutrality order and yet it already has the inside-the-Beltway lobbying machine humming.

(2) Choice is largely irrelevant to the pro-regulation Net neutrality crowd.

(3) For Net neutrality proponents, “fairness” always trumps competition / innovation, regardless of the costs.,

(4) Net neutrality regulatory proponents seemingly have very little faith in “openness” prospering organically, even though it has.

I add an appraisal I made a couple of years ago about the Free Culture movement as a whole:

The movement has a blind faith that the crowd will provide, but offers little explanation how an internet-or a society-built on its premises would result in high quality physical or intellectual products. . . . No one in its world must make a living, or worry about a return on investment. Large companies don’t help solve problems in organizing human effort; they are malevolent entities. . . . The towering importance of markets as institutions that facilitate human cooperation is not part of their intellectual or moral arsenal. . . . Free and easy with the fundamentals of economic thought, blind to the illuminations of history, and enamored with the wisdom of crowds (which easily turns into the madness of mobs), the movement floats off into abstractions about net neutrality, universal generativity, communitarian sharing, and semiotic democracy.

Image from Wikipedia.

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