As a recent column in the Wall Street Journal reminds us, online freedom is jeopardized in the name of “net neutrality” (The FCC’s Threat to Internet Freedom). This is just another case of the state re-labeling things to sound benign but that are really invasions of liberty and property rights–another good example being use of the term “intellectual property” to masque the true nature of state-granted monopoly privilege rights (patent and copyright) (see my post Intellectual Properganda).

It is true that some corporations probably have extra-market power to control aspects of the Internet, as the result of state interventions such as IP, FCC licensing, antitrust law, big business favoritism, and so on. But the solution is not to grant the state even more power to regulate private companies.This is the criminal gang that has fouled things up in the first place. Another recent example of federal Chutzpah is the Obama administration’s proposal to provide a “Web Privacy ‘Bill of Rights’“–how obscene. The mob that is the greatest threat to online privacy freedom, and rights will protect us? I’m reminded of the phrase, “We’re from the government. And we’re here to help.” Thanks, but no thanks, guys.

These are the same parasites who do everything they can to hobble and destroy business and innovation–they impose costly regulations; tax individuals, making employees more costly; inflate the money supply and cause destructive business cycles; impose insane, murderous policies on pharmaceutical and medical innovations via the FDA; and then impose double tax by taxing corporations too, after imposing Sarbannes Oxley on them for the “privilege” to exist as a corporation (a privilege that is not a privilege; corporations do not need state privileges to exist¹ ). And then, as a solution to the damage done to innovation by the state’s malicious hobbbling, the maniacal intellectual properteers urge giving the state more power to grant intellectual monopoly privilege grants to companies. (But then, if the companies use these monopoly grants “too much”, it’s called “abuse” and the state persecutes them under its evil antitrust laws.)²

Likewise, net neutrality is an attempt by the state to see more power to control private property rights as an ostensible response to various “market failures” that are really themselves caused by state intervention. In this, it is anohter example of the state’s creating a crisis and using this as a justification to seize more power under the pretense of saving the people from the crisis that it caused.³

Libertarians should oppose net neutrality–and the state interventions that gives rise to the problems net neutrality pretends to address.⁴ Don’t trust the state to “protect” you. Ever.

In recent years the “Net Neutrality” movement has gained steam. This is an effort by various statists, interventionists, do-gooders, meddlers, and techno-ignoramuses who seek to have the government forbid network providers (e.g. cable companies, telcos, and wireless carriers) from selectively blocking certain types of Internet use–for example, to require companies to give Web users equal access to all content, even if some of that content is clogging the network. Of course, as I noted on A Libertarian Take on Net Neutrality, the network neutrality movement is unlibertarian. There is nothing wrong with price discrimination or with charging different prices for different levels of service. As some anti-corporatist types are only too eager to point out, without state intervention the major telcos might well not have as much monopolistic power as they currently do. But it doesn’t make much sense to urge that the state engage in further intervention to fix the problem of previous state intervention. It is state intervention that is the problem.

In the latest development on this front, as reported in U.S. Court Curbs F.C.C. Authority on Web Traffic, cable company Comcast Corporation had challenged the F.C.C.’s authority to impose Net Neutrality rules. Last week, a federal appeals court ruled in Comcast’s favor, holding that F.C.C. regulators have limited power over Web traffic. As the article notes, “The decision will allow Internet service companies to block or slow specific sites and charge video sites like YouTube to deliver their content faster to users.”

Libertarians should not leap for joy, however. The court merely held that current federal statutes do not happen to give the F.C.C. quite enough authority to regulate Internet companies in this manner. They didn’t say it would be unconstitutional or even unwise. So all Congress has to do is pass a law. And they’re good at doing that.

A Libertarian Take on Net Neutrality

November 4, 2009 by Stephan Kinsella [edit]

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The cool, hip techno-pundits are usually reliably Obama-liberal/libertarian-lite types. A bit California-smug, engineer-scientistic, anti-principle, anti-”extreme.” But okay overall. A soft, tolerant, whitebread bunch.

On the last This Week in Tech, I was pleasantly surprised to hear the always interesting Jason Calacanis voice support for nuclear power; and even more surprised to hear soft-liberal host Leo Laporte echo mild agreement with this. Good for them!

But then they had to revert to form when they, along with Natali Del Conte and Patrick Norton expressed unanimous disapproval of McCain’s Internet Freedom Act, since they are all–”of course”–in favor of net neutrality rules imposed by the FCC. McCain’s proposed statute would block the FCC’s proposed net neutrality rules, which would forbid network providers (e.g. cable companies, telcos, and wireless carriers) from selectively blocking certain types of Internet use.

Got that? The techno-pundits are against regulation (by cable companies) … so they favor regulation (by the FCC) of the cable companies … so they oppose government legislation regulating a government agency. They sit there fuming about how disgusting McCain’s draft legislation is. So they see that the state is terrible. Yet it doesn’t occur to them that it might be a bad idea to trust the government to oversee the Internet. They are against regulation of the Internet, so they support ceding power to the government to … decide how and whether the Internet should be regulated. It doesn’t occur to them that we should simply favor property rights, individual freedom, and the free market. The closest any of them come to this position is John Dvorak, who has a libertarian and contrarian streak, and who often observes on TWIT that there’s nothing wrong with tiered pricing–charging more for a fatter pipe, etc.Is “no regulation of network providers” the libertarian position? It clearly would be if the network providers were purely private. In the libertarian view private property owners determine how their property may be used. There is no “right” to access the Internet. A private network provider ought to be able to offer service on whatever terms he wants; and consumers to accept or reject it. Tiered services, deep packet inspection, prohibition of certain types of uses or even certain types of content–that’s up to the providers and customers and whatever deal they agree to. We libertarians believe in “capitalist acts between consenting adults,” to use Nozick’s phrase (see Rothbard’s earlier formulation).

But because of various degrees of corporatism–state favors and protectionism, tax funding of infrastructure, etc.–the service providers are arguably not 100% private. But the solution is not to regard them as essentially part of the state and thus fair game for regulation, but to pair our call for no state regulation of the Internet (no net neutrality regulations) with a call for the abolition of all forms of corporatism, such as various laws that work out protecting larger companies (tax funded subsidies, IP law, wage and hour legislation, mandatory worker benefits, labor union legislation, minimum wage, incorporation statutes [note: this does not mean I think that limited liability is a privilege conferred by the state on corporations], and so on).

This is my take, anyway. I am not aware of much informed libertarian analysis on the net neutrality issue. Kevin Carson pointed me to Jim Lippard as “one of the better libertarian writers on net neutrality”–I’ll have to take a deeper look, but from a quick glance I’m not sure he’s a libertarian; here he writes, e.g., “providers shouldn’t be able to block access to competitors’ services”–should be able? This seems to presuppose the legitimacy of an overarching state regulation, which is certainly not libertarian.

Update: Leo Laporte must have gotten a lot of flak in the past week for supporting the FCC imposing net neutrality rules on Internet network providers. In TWIT 220, he expresses genuine concern with this. And he seems to get that the issue is not what rules the FCC should impose–which most of his technocratic guests in that episode focus on–but the issue of the danger of empowering the state itself to regulate at all. Most of the panelists at least seem leery of state regulation, but are concerned there is not enough competition in the network provider industry to ensure self-regulation. This concern is understandable, but the pundits should pause to ask: what is the state’s role in causing the industry to be the way it is? In addition to being leery of state regulation of the Internet, they should oppose state policies that subsidize and prop up large companies or reduce competition; one of them even brings up the issue of how utilities are given monopoly status by municipalities. So they are almost there. It might help if we libertarians could elaborate the various state regulations and laws that have given current network providers more market power than they would have on a truly free market–taxes, minimum wage laws, implicit and explicit subsidies, the legacy of government-granted monopolies, pro-union legislation, and various other regulations that disproportionately shackle and hamper smaller companies and potential competitors; regulations that help the existing, larger companies by increasing barriers to entry into that field; state taxes, IP laws, and regulations that stifle dynamic change, innovation, and competition.

Laporte also mentions some kind of split on this issue among EFF board members. I looked at the EFF site and can’t find much explicit about net neutrality–no categories, etc. They seem to be trying to keep a low profile on this issue, maybe because they have some pro-state-regulation board members. I did find this recent EFF article by Corynne Mcsherry, “Is Net Neutrality a FCC Trojan Horse?,” which expresses the concern that if the FCC just grabs “ancillary jursidiction” to impose net neutrality regulations, who knows what other regulatory powers it might just unilaterally decide to assme the power to impose regulations pursuant to an “Internet Decency Statement.” But though McSherry here seems to display healthy skepticism of state regulation, she is obviously trying to leave open the door that some state regulation of network providers might be favored by EFF: e.g., McSherry writes, “If ‘ancillary jurisdiction’ is enough for net neutrality regulations (something we might like) today, it could just as easily be invoked tomorrow for any other Internet regulation that the FCC dreams up (including things we won’t like).” Note the bolded language. And she notes that one possible solution to the FCC’s “ancillary jurisdiction” power grab is: “Congress could limit the FCC’s power by authorizing to regulate only to ensure network neutrality.”

The EFF, if it is to remain principled and a proponent of individual, Internet-related freedoms and “digital rights,” must be clear on the enemy of such rights: the state. The moment EFF supports any state agency’s regulation of private companies or the Internet, they have succumbed to their leftist confusions and statist sympathies and become worthless as principled defenders of individual freedom.

[Mises]

1. See Legitimizing the Corporation and Other Posts; Richman and Carson on the BP Oil Spill; Should Libertarians Oppose “Capitalism”?; Rothbard on Corporations and Limited Liability for Tort; Comment on Knapp’s Big Government, Big Business — Conjoined Twins; Pilon on Corporations: A Discussion with Kevin Carson; Defending Corporations: Block and Huebert [↩]
2. See State Antitrust (anti-monopoly) law versus state IP (pro-monopoly) law. [↩]
3. See Robert Higgs, Crisis & Leviathan. [↩]
4. See my posts Net Neutrality Developments and Libertarian Take on Net Neutrality (both reposted below); also Harvard’s Yochai Benkler on Net Neutrality and Innovation. [↩]