My Two-Cents on the Internet “Fast Lane”

For those of you who do not know what this means:

Federal Communications Commission Chairman Tom Wheeler has been under fire for proposing new so-called “open Internet” or “net neutrality” rules that would allow content companies to pay broadband providers for faster Internet speeds delivering their traffic as long as deals are deemed “commercially reasonable.”

Consumer advocates are worried the rules would ultimately allow Internet companies like Comcast Corp or Verizon Communications Inc to create “fast lanes” on the web for traffic of content companies that pay up, potentially shutting out poorer newcomers.

In a lengthy blog post on Tuesday, his second on the subject, Wheeler said the FCC would “shut down” broadband providers’ efforts to degrade their service to create a new fast lane and would not tolerate degrading of service to push customers or content companies to a higher-priced tier. – Reuters

First and foremost I do not believe this will come to pass. There also have been arguments that the trade commission simply misrepresented their intent (I will not make a comment on that at this time). Quite frankly, it would be a scene from the mid-to-end of Atlas Shrugged, a policy so disastrous it destroys a large portion of our economy.

“A Fast Lane for Books”

Imagine a world where we did not have the internet, some people may even remember this. The only way to obtain knowledge was through books, lectures, NEWS papers, television, and radio. The difference being, each one of those require a large industry (and in turn large amounts of money) to produce the mode of delivery. To combat the costs of knowledge the government created NPR, the public libraries, a public education system, etc. Clearly, the distribution of knowledge was essential to the existence and dominance of the United States or any country for that matter.

Now that we have a world without internet, imagine a world where the only books that you could get “quickly” are books deemed “commercially reasonable.” Alright… this means Oprah’s new books would be deemed more commercially reasonable than that books on astrophysics, math, and other educational subjects since they do not make enough money (this is/was common in bookstores/libraries). Interesting that this seems counter intuitive to the governments “knowledge is power” stance, but what does this actually mean.

Focusing on commercially reasonableness seems capitalistic in nature, but how would it effect service. The first major change in relation to books would be the inability to obtain them. Imagine having to wait 2 – 3 weeks (which was not uncommon 50 – 60 years ago) to have a book shipped to your library. If you were really interested you would know what books you would like to read in advanced and you would order them previous to needing them. What this stifled was  instantaneous access to information which drove many away.

It’s difficult to maintain excitement about something that takes weeks or months to gain access to and even then, maybe the you or library screwed up and you did not obtain the book you desired. Well, another 2 – 3 weeks… Or would you just give up?

The point of this thought exercise is to demonstrate how strange it would sound to want to go back to that.

Life Since the Internet

I must admit that I have spent most of my life with the internet and one thing I have noticed throughout it is how fast the internet has become. I would venture to say most of us remember a time when the internet was  slow and we tried reloading the pages countless times or switched to a different website which loaded faster.

The difference between a fast lane and the regular internet is that in the current system it is more or less fair (yes, there is still a cache and what not so better known websites can get loaded first etc.). This means, that any new incumbent can distribute information at a fraction of the cost of those old industries such as books, television, radio, in-person lectures, etc. Providing for the first time in history the most “fair” way to let the best man win. Since the barrier to entry to internet applications are literally several hundred to a few thousand dollars it has enabled information spread like fire.

The New Age

More or less an internet fast lane creates a situation where information becomes controlled by major companies which can provide better service. I personally know I will switch to the fastest websites, sine I hate to wait. Further, services which stream music or video will only be possible if they are on the “fast lane” this means innovation will take a hearty blow.

More or less the standard business model for internet/cable providers have always been charge the end customer based on how much they use. Although this is not fun for customers, it does provide an incentive for (a) low bandwidth use (since you will cost yourself more money) and (b) a fair playing field for internet based businesses. The importance is that point (b) is what enables companies who focus on the non-standard users. In other words, it allows for a far more diverse internet and helped millions of consumers, obtain things they otherwise would have never obtained.

The whole fast lane nonsense would squash, or at least stifle that. To be honest, it would probably tank the worlds economy as well. When you provide a quasi-monopoly (by increasing barriers to entry) to the established companies who have more money you in effect destroy innovation, which as it happens is the bread and butter to the whole tech industry.

Monopolies on Monopolies

Cable companies are already given a monopoly (or were given a monopoly) over a location for a given period of time. This usually covers their costs for building a large amount of infrastructure. Their competitors, when they do gain access to a region several years will often avoid the competition and allow them to maintain their monopoly. This is why Comcast, Time Warner, AT&T, and Verizon have been so dominant in the U.S., It costs a large sum of money to build the infrastructure.

Clearly, with a local monopoly (over a highly desired resource) these companies can make a profit, so why don’t they simply take out a loan, build a better infrastructure and beat out the competition in other locations. I believe this is because they already have a monopoly, they have little to no incentives to compete and thus are simply going to try and have outrageous rates (as we have seen Google can provide much better service for much less), sell your data, and now this whole fast lane business. Further, I guarantee they are fighting tooth and nail to keep Google out, and from other technologies from taking over.

My issue with the matter, is that the companies are already given a monopoly, meaning they truly should be slaves to the people. Since the government supposedly represents the people and the people have chosen to grant a monopoly, why then don’t we provide an incentive by simply taking away their monopoly, as opposed to giving them more money?

Summary

I do not think this will come to pass, if it does it will likely ruin our economy by forcing a reduction in innovation and disincentivizing new startups to start in the U.S. and in general.