A Stitch in Haste

Google's "Don't be Evil" founders are acknowledging that their decision to embrace censorship in China may have been a mistake:

Google's China-approved Web service omits politically sensitive information that might be retrieved during Internet searches, such as details about the 1989 suppression of political unrest in Tiananmen Square. Its agreement with China has provoked considerable criticism from human rights groups.

"Perhaps now the principled approach makes more sense," [Sergey] Brin said.

The Paris-based group Reporters Without Borders said Tuesday that Google's main Web site, http://www.google.com, was no longer accessible in most Chinese provinces due to censorship efforts, and that it was completely inaccessible throughout China on May 31.

Brin said Google is trying to improve its censored search service, Google.cn, before deciding whether to reverse course. He said virtually all the company's customers in China use the non-censored service.

Put those last two paragraphs together: almost everybody uses uncensored Google, yet uncensored Google is not available in most provinces. It follows, like a simple LSAT question, that almost all uncensored Google use is in just a few provinces. And we of course know precisely which provinces those are -- the perverted "capitalist zones," such as Shanghai, which are only open to China's crony capitalist elites and others with Communist Party connections (which require, as a condition precedent, a demonstrated loyalty to the dictatorship).

So censored Google isn't being used, and uncensored Google is only being used by those who actually like (and profiteer from) the Communist authoritarians.

This is somehow supposed to catalyze the spread of freedom in China?

Absurd.

Bravo to Brin for acknowledging his error. Hopefully he and his colleagues will follow through and scrap censored Google.

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Brin was in Washington to lobby against so-called "net neutrality." I wish I could get my hands around this issue. It seems to me that if I pay my Internet Service Provider for, well, Internet Service Provision, then it shouldn't matter which sites I'm visiting -- it's now my bandwidth, I paid for it. Just like if I pay for cell phone service, then how can the carrier claim a right to charge the person I'm calling? It makes no sense to me.

But many other libertarians argue that "net neutrality" equals invidious regulation -- that the ISPs "own their pipe" and should be allowed to "toll" it as they see fit. Just as cable companies both charge you for service and charge the content providers for inclusion in that service.

Hmm...

I'm still leaning toward the concept of "the Internet is a public good, even if access to it is not." So revoke my libertarian credentials if you must, but I'm still, hesitantly, in the "support net neutrality" camp.

He's right...

New network technologies and management tools not only keep the Internet flowing, they also spur innovation. They can make sure applications requiring low delay, such as voice and gaming, will work. Soon, personalized Internet HDTV will become possible. Gaming will continue to grow as picture quality takes on real-life imagery. And business tools, such as video conferencing, will become more significant as the quality of video and audio improves. These types of entertainment and communications innovations can only emerge if providers have the incentives to build networks capable of delivering them.

Is regulation needed to accomplish "Net neutrality"? The prudent policy at this point would be not to regulate. First, the Internet is still in its adolescence, and it is undergoing rapid change. Regulation would lock in rules and practices that might seem correct today, but could create havoc tomorrow.

...and he's right...

The implications of permanently losing network neutrality could not be more serious. The current legislation, backed by companies such as AT&T, Verizon and Comcast, would allow the firms to create different tiers of online service. They would be able to sell access to the express lane to deep-pocketed corporations and relegate everyone else to the digital equivalent of a winding dirt road. Worse still, these gatekeepers would determine who gets premium treatment and who doesn't.

Their idea is to stand between the content provider and the consumer, demanding a toll to guarantee quality delivery. It's what Timothy Wu, an Internet policy expert at Columbia University, calls "the Tony Soprano business model": By extorting protection money from every Web site — from the smallest blogger to Google — network owners would earn huge profits. Meanwhile, they could slow or even block the Web sites and services of their competitors or those who refuse to pay up. They'd like Congress to "trust them" to behave.

...they can't both be right!

I'm still hesitantly leaning toward supporting net neutrality. It seems to be a choice between two business models. Net neutrality is like the cell phone industry — if I use twice as much capacity (i.e., twice as many minutes), then I pay twice as much for it (give or take) in a market that is (relatively) competitive, and it doesn't matter whom I'm calling and he pays nothing to my provider (he might have to pay his own provider, but not mine).

Anti-neutrality is clearly like the cable television model — both buyers and sellers of content (i.e., subscribers and media companies) pay the gatekeeper for access to the pipe, in an arrangement awarded and protected by government monopoly.

Would anyone dare suggest that innovation in cable television has progressed more quickly than in wireless telephony, or that most people are more satisfied with their cable provider than with their cell phone company? I think not.

History, short as it may be, is clearly on the side of the net neutrality crowd. As is basic economics, I think.

In any case, I am really starting to hate this issue. I loathe ambivalence and indecisiveness, which is exactly what the net neutrality debate inflicts upon me.

Can we have the Marriage Protection Amendment vote again? That was so much easier...

Open thread: anyone with any opinions one way or the other on net neutrality please feel free to sell me and your fellow readers on your point of view.

More thoughts from Greg Mankiw, Arnold Kling, Eli Dourado, Marginal Revolution, Samizdata.

Clash of the titans:

EBay customers won't be able to use the newly launched Google Checkout service to buy products, according to the auction Web site.

Google Checkout is now listed among other payment services such as Netpay.com, Qchex.com, ePassporte.com, and BillPay.ie that are not permitted on eBay.
...
Even if the current Google Checkout service doesn't exactly compete head on with PayPal, it could in the future.

As a reminder, eBay owns PayPal.

Some opponents of Net Neutrality, including some libertarians, are calling "Shenanigans!"

Isn't the business model that favors an affiliated online service over that of a competitor the very thing companies like eBay say they want to "safeguard" consumers from through network neutrality? Once again, what's good for the goose is not good for the gander.

This is, of course, utter nonsense.

Have you ever walked through a supermarket or convenience store and seen a refrigerator with the Coca-Cola logo all over it, with a little sticker on it that read something like: "This container is for the storage of Coca-Cola brand products only..."?

Now of course no libertarian would dare demand "Cola Neutrality" and ban such restrictions. That's an easy point to concede, precisely because it's a pointless point from the outset.

News flash #1: Coca-Cola is not a government-chartered monopoly. It is perfectly entitled to restrict its own privately-owned distribution channels, via private contracts, to its own products for the maximization of its own profits.

News flash #2: eBay is not a government-chartered monopoly. It is perfectly entitled to restrict its own privately-owned distribution channels, via private contracts, to its own products for the maximization of its own profits.

News flash #3: Verizon, AT&T, BellSouth and Comcast are not...

Oops. Never mind...

This is why the "eBay v. Google Checkout" analogy to Net Neutrality is patently absurd. For better or for worse, the "owners" of the Internet pipe, that are now so desperately opposed to Net Neutrality, are creatures of the state, that exist solely due to government fiat. As such, they are not simply entitled, carte blanche, to whatever profits their monopoly status might generate. It's no different from a rate-regulated electric utility. That which is spawned by government can be caged by government. And libertarians need lose no sleep over it.

I have nothing but contempt for the FCC commissioners who have been blocking the merger of AT&T and BellSouth for political reasons (but remember, they're "dedicated public servants"). Antitrust laws are used by bureaucrats to protect competitors, not competition. And the FCC — probably the most socialist*, definitely the most partisan, and generally the all-around dumbest federal regulatory agency in Washington — should be the last group allowed to wield antitrust power.

But look on the bright side:

AT&T has offered concessions beyond what it had promised in October, including a significant pledge to observe standards regarding network neutrality — basically, equal treatment for all Internet traffic. This issue appeared to be the biggest roadblock to a deal.

I support net neutrality strictly on consequentialist grounds: net neutrality is like the cell phone industry; anti-neutrality is like cable television — which has the better track record over the past 30 years in terms of quality, pricing and innovation? It's a no-brainer.

As for a libertarian analysis, I consider the issue ambiguous at best. Yes the telecom and cable companies "own their pipe," but the only reason they own it is because of the infrastructure head start (i.e., the government-granted momentum) that they had as a result of existing for decades as government-chartered monopolies.

If the government gives you, as a monopolist, free land, or free cars, or free paper clips year after year, then suddenly says "no more free land, or free cars, or free paper clips for you," then you may no longer be a monopolist, but you still have the land or the cars or the paper clips — and you therefore also have an unfair, government-created advantage over any new entrants, even in the subsequent deregulated environment.

So too with the "series of tubes." The "pipe-owners" are where they are at least in part because of prior government intervention in their favor, and for better or worse the government is still entitled, perhaps even obligated, to attach strings to "their" pipe.**

That does not mean, however, that net neutrality should have come from the hack partisan bureaucrats at the FCC. It should have come from Congress, after public discussion and due deliberation.

In government, every silver lining has a cloud.

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*At least now that we are rid of the Civil Aeronautics Board and the Interstate Commerce Commission.

**This was also essentially my argument defending so-called "a la carte" pricing of cable television, another policy that some libertarians took umbrage with, on the (incomplete) reasoning that "they own their pipe." Unlike net neutrality, "a la carte" died a quiet death at the FCC.

My recent post on some reported shenanigans by Cablevision in the wake of FCC-mandated digitization of broadcast television reminded me that I haven't blogged about "net neutrality" -- where my position qua libertarian is somewhat anti-consensus -- in some time.

Fortunately Tony gives me an excuse to summarize and restate my position:

I actually support government-imposed net neutrality because these backbone companies (AT&T, Comcast, etc.) were spawned by the government in the first place.

Government-chartered monopoly = government rate regulation.

(The fact that they are no longer rate-regulated does not change the fact that it was the original monopoly charters that gave them the backbone in the first place.)

But if, e.g., Google were to build its own pipe with its own money — as it has threatened to do — then it should be free to price it however it sees fit.

The notion, meanwhile, that the backbone companies need more revenue to build more capacity is all well and good, but you can still get that revenue from one end of the pipe exclusively — the subscriber.

If I use twice as much bandwidth as you do, then I can pay twice as much as you do. No objection there. But leave whence I'm getting all that content (e.g., Netflix, iTunes or YouTube) out of it.

The idea that NetNeut will "choke the pipe" is a Chicken Little canard spread by its opponents, pure and simple.

Counterarguments welcome.