Arguments against net neutrality

link on net  neutrality

https://zeitgeist77.wordpress.com/2015/03/02/the-lies-of-net-neutrality-2/

https://zeitgeist77.wordpress.com/2014/11/20/net-neutrality-what-it-really-means-and-how-it-could-impact-you/

Opponents of net neutrality regulations include AT&T, Verizon, IBM, Intel, Cisco, Nokia, Qualcomm, Broadcom, Juniper, dLink, Wintel, Alcatel-Lucent, Corning, Panasonic,Ericsson, and others.[34][55][110] Notable technologists who oppose net neutrality include Marc Andreessen, Scott McNealy, Peter Thiel, David Farber, Nicholas Negroponte,Rajeev Suri, Jeff Pulver, John Perry Barlow, and Bob Kahn. [50][51][52][111][112][53][113][48][114][115][116]

Nobel Prize economist Gary Becker‘s paper titled, “Net Neutrality and Consumer Welfare”, published by the Journal of Competition Law & Economics, alleges that claims by net neutrality proponents “do not provide a compelling rationale for regulation” because there is “significant and growing competition” among broadband access providers.[49]

Google Chairman Eric Schmidt, states that while Google views that similar data types shouldn’t be discriminated against, it’s okay to discriminate across different data types—a position that both Google and Verizon generally agree on, according to Schmidt.[117][118] According to the Journal, when President Barack Obama announced his support for strong net neutrality rules late in 2014, Schmidt told a top White House official the president was making a mistake.[118]

Several civil rights groups, such as the National Urban League, Jesse Jackson‘s Rainbow/PUSH, and League of United Latin American Citizens, also oppose Title II net neutrality regulations,[56] who said that the call to regulate broadband Internet service as a utility would harm minority communities by stifling investment in underserved areas.[119]

A number of other opponents created Hands Off The Internet,[120] a website created in 2006 to promote arguments against internet regulation. Principal financial support for the website came from AT&T, and members included BellSouth, Alcatel, Cingular, and Citizens Against Government Waste.[121][122][123][124][125]

Robert Pepper, a senior managing director, global advanced technology policy, at Cisco Systems, and is the former FCC chief of policy development, says: “The supporters of net neutrality regulation believe that more rules are necessary. In their view, without greater regulation, service providers might parcel out bandwidth or services, creating a bifurcated world in which the wealthy enjoy first-class Internet access, while everyone else is left with slow connections and degraded content. That scenario, however, is a false paradigm. Such an all-or-nothing world doesn’t exist today, nor will it exist in the future. Without additional regulation, service providers are likely to continue doing what they are doing. They will continue to offer a variety of broadband service plans at a variety of price points to suit every type of consumer”.[126] Computer scientist Bob Kahn [113] has said net neutrality is a slogan that would freeze innovation in the core of the Internet.[48]

Farber has written and spoken strongly in favor of continued research and development on core Internet protocols. He joined academic colleagues Michael Katz, Christopher Yoo, and Gerald Faulhaber in an op-ed for the Washington Post strongly critical of network neutrality, essentially stating that while the Internet is in need of remodeling, congressional action aimed at protecting the best parts of the current Internet could interfere with efforts to build a replacement.[127]

§Reduction in innovation and investments[edit]

According to a letter to key Congressional and FCC leaders sent by 60 major technology companies including IBM, Intel, Qualcomm, and Cisco, Title II regulation of the internet “means that instead of billions of broadband investment driving other sectors of the economy forward, any reduction in this spending will stifle growth across the entire economy. This is not idle speculation or fear mongering…Title II is going to lead to a slowdown, if not a hold, in broadband build out, because if you don’t know that you can recover on your investment, you won’t make it.”[34][46][128][128][129]

According to the Wall Street Journal, in one of Google’s few lobbying sessions with FCC officials, the company urged the agency to craft rules that encourage investment in broadband Internet networks—a position that mirrors the argument made by opponents of strong net neutrality rules, such as AT&T and Comcast.[118]

Opponents of net neutrality argue that prioritization of bandwidth is necessary for future innovation on the Internet.[110] Telecommunications providers such as telephone and cable companies, and some technology companies that supply networking gear, argue telecom providers should have the ability to provide preferential treatment in the form oftiered services, for example by giving online companies willing to pay the ability to transfer their data packets faster than other Internet traffic. The added revenue from such services could be used to pay for the building of increased broadband access to more consumers.[77]

Opponents say that net neutrality would make it more difficult for Internet service providers (ISPs) and other network operators to recoup their investments in broadband networks.[130] John Thorne, senior vice president and deputy general counsel of Verizon, a broadband and telecommunications company, has argued that they will have no incentive to make large investments to develop advanced fibre-optic networks if they are prohibited from charging higher preferred access fees to companies that wish to take advantage of the expanded capabilities of such networks. Thorne and other ISPs have accused Google and Skype of freeloading or free riding for using a network of lines and cables the phone company spent billions of dollars to build.[110][131][132]

Marc Andreessen states that “a pure net neutrality view is difficult to sustain if you also want to have continued investment in broadband networks. If you’re a large telco right now, you spend on the order of $20 billion a year on capex. You need to know how you’re going to get a return on that investment. If you have these pure net neutrality rules where you can never charge a company like Netflix anything, you’re not ever going to get a return on continued network investment — which means you’ll stop investing in the network. And I would not want to be sitting here 10 or 20 years from now with the same broadband speeds we’re getting today.”[133]

§Counterweight to server-side non-neutrality[edit]

Those in favor of forms of non-neutral tiered Internet access argue that the Internet is already not a level playing field: large companies achieve a performance advantage over smaller competitors by replicating servers and buying high-bandwidth services. Should prices drop for lower levels of access, or access to only certain protocols, for instance, a change of this type would make Internet usage more neutral, with respect to the needs of those individuals and corporations specifically seeking differentiated tiers of service. Network expert[134] Richard Bennett has written, “A richly funded Web site, which delivers data faster than its competitors to the front porches of the Internet service providers, wants it delivered the rest of the way on an equal basis. This system, which Google calls broadband neutrality, actually preserves a more fundamental inequality.”[135]

§Broadband infrastructure[edit]

Proponents of net neutrality regulations say network operators have continued to under-invest in infrastructure.[136] However, according to Copenhagen Economics, US investment in telecom infrastructure is 50 percent higher that of the European Union. As a share of GDP, The US’s broadband investment rate per GDP trails only the UK and South Korea slightly, but exceeds Japan, Canada, Italy, Germany, and France sizably.[137]

On broadband speed, Akamai reported that the US trails only South Korea and Japan among its major trading partners, and trails only Japan in the G-7 in both average peak connection speed and percentage of the population connection at 10 Mbps or higher, but are substantially ahead of most of its other major trading partners.[138]

The White reported in June 2013 that U.S. connection speeds are “the fastest compared to other countries with either a similar population or land mass.”[139]

Akamai’s report on “The State of the Internet” in the 2nd quarter of 2014 says “a total of 39 states saw 4K readiness rate more than double over the past year.” In other words, as ZDNet reports, those states saw a “major” increase in the availability of the 15Mpbs speed needed for 4K video. [140]

According to the Progressive Policy Institute and ITU data, the United States has the most affordable entry-level prices for fixed broadband in the OECD.[141][142]

FCC Commissioner Ajit Pai and Federal Election Commission’s Lee Goldman wrote in a Politico piece in February 2015, “Compare Europe, which has long had utility-style regulations, with the United States, which has embraced a light-touch regulatory model. Broadband speeds in the United States, both wired and wireless, are significantly faster than those in Europe. Broadband investment in the United States is several multiples that of Europe. And broadband’s reach is much wider in the United States, despite its much lower population density.” [143]

§Significant and growing competition[edit]

A 2010 paper on net neutrality by Nobel Prize economist Gary Becker and his colleagues stated that “there is significant and growing competition among broadband access providers and that few significant competitive problems have been observed to date, suggesting that there is no compelling competitive rationale for such regulation.”[49]

Becker and fellow economists Dennis Carlton and Hal Sidler found that “Between mid-2002 and mid-2008, the number of high-speed broadband access lines in the United States grew from 16 million to nearly 133 million, and the number of residential broadband lines grew from 14 million to nearly 80 million. Internet traffic roughly tripled between 2007 and 2009. At the same time, prices for broadband Internet access services have fallen sharply.”[49]

The PPI reports that the profit margins of U.S. broadband providers are generally one-sixth to one-eighth of companies that use broadband (such as Apple or Google), contradicting the idea of monopolistic price-gouging by providers.[144]

§Broadband choice[edit]

A report by the Progressive Policy Institute in June 2014 argues that nearly every American can choose from at least 5-6 broadband internet service providers, despite claims that there are only a ‘small number’ of broadband providers.[145] Citing research from the FCC, the Institute wrote that 90 percent of American households have access to at least one wired and one wireless broadband provider at speeds of at least 4 Mbps (500 kB/s) downstream and 1 Mbps (125 kB/s) upstream and that nearly 88 percent of Americans can choose from at least two wired providers of broadband disregarding speed (typically choosing between a cable and telco offering). Further, three of the four national wireless companies report that they offer 4G LTE to between 250-300 million Americans, with the fourth (T-Mobile) sitting at 209 million and counting.[146]

Similarly, the FCC reported in June 2008 that 99.8 percent of zip codes in the United States had two or more providers of high speed Internet lines available, and 94.6 percent of zip codes had four or more providers, as reported by University of Chicago economists Gary Becker, Dennis Carlton, and Hal Sider in a 2010 paper. [147]

When FCC Chairman Tom Wheeler redefined broadband from 4 Mbps to 25 Mbps (3.125 MB/s) or greater in January 2015, FCC commissioners Ajit Pai and Mike O’Reilly believed the redefinition was to set up the agency’s intent to settle the net neutrality fight with new regulations. The commissioners argued that the stricter speed guidelines painted the broadband industry as less competitive, justifying the FCC’s moves with Title II net neutrality regulations.[148]

§Deterring competition[edit]

FCC commissioner Ajit Pai states that the FCC completely brushes away the concerns of smaller competitors who are going to be subject to various taxes, such as state property taxes and general receipts taxes.[149] As a result, according to Pai, that does nothing to create more competition within the market.[149]

According to Pai, the FCC’s ruling to impose Title II regulations is opposed by the country’s smallest private competitors and many municipal broadband providers.[150] In his dissent, Pai noted that 142 wireless ISPs (WISPs) said that FCC’s new “regulatory intrusion into our businesses…would likely force us to raise prices, delay deployment expansion, or both.” He also noted that 24 of the country’s smallest ISPs, each with fewer than 1,000 residential broadband customers, wrote to the FCC stating that Title II “will badly strain our limited resources” because they “have no in-house attorneys and no budget line items for outside counsel.” Further, another 43 municipal broadband providers told the FCC that Title II “will trigger consequences beyond the Commission’s control and risk serious harm to our ability to fund and deploy broadband without bringing any concrete benefit for consumers or edge providers that the market is not already proving today without the aid of any additional regulation.”[55]

§Potentially increased taxes[edit]

FCC commissioner Ajit Pai, who opposed the net neutrality ruling, claims that the ruling issued by the FCC to impose Title II regulations explicitly opens the door to billions of dollars in new fees and taxes on broadband by subjecting them to the telephone-style taxes under the Universal Service Fund.

Net neutrality proponent Free Press argues that, “the average potential increase in taxes and fees per household would be far less” than the estimate given by net neutrality opponents, and that if there were to be additional taxes, the tax figure may be around $4 billion. Under favorable circumstances, “the increase would be exactly zero.”[151]Meanwhile, the Progressive Policy Institute claims that Title II could trigger taxes and fees up to $11 billion a year.[152] Financial website Nerd Wallet did their own assessment and settled on a possible $6.25 billion tax impact, estimating that the average American household may see their tax bill increase $67 annually.[153]

FCC spokesperson Kim Hart said that the ruling “does not raise taxes or fees. Period.”[153] However, the opposing commissioner, Ajit Pai, claims that “the plan explicitly opens the door to billions of dollars in new taxes on broadband…These new taxes will mean higher prices for consumers and more hidden fees that they have to pay.” [154] Pai explained that, “One avenue for higher bills is the new taxes and fees that will be applied to broadband. Here’s the background. If you look at your phone bill, you’ll see a ‘Universal Service Fee,’ or something like it. These fees —- what most Americans would call taxes — are paid by Americans on their telephone service. They funnel about $9 billion each year through the FCC. Consumers haven’t had to pay these taxes on their broadband bills because broadband has never before been a Title II service. But now it is. And so the Order explicitly opens the door to billions of dollars in new taxes.”[55]

§Prevent overuse of bandwidth[edit]

Since the early 1990s, Internet traffic has increased steadily. The arrival of picture-rich websites and MP3s led to a sharp increase in the mid-1990s followed by a subsequent sharp increase since 2003 as video streaming and Peer-to-peer file sharing became more common.[155][156] In reaction to companies including YouTube, as well as smaller companies starting to offer free video content, using substantial amounts of bandwidth, at least one Internet service provider (ISP), SBC Communications (now AT&T Inc.), has suggested that it should have the right to charge these companies for making their content available over the provider’s network.[157]

Bret Swanson of the Wall Street Journal wrote in 2007 that the popular websites of that time, including YouTube, MySpace, and blogs, were put at risk by net neutrality. He noted that, at the time, YouTube streamed as much data in three months as the world’s radio, cable and broadcast television channels did in one year, 75 petabytes. He argued that networks were not remotely prepared to handle the amount of data required to run these sites. He also argued that net neutrality would prevent broadband networks from being built, which would limit available bandwidth and thus endanger innovation.[158]

One example of these concerns was the series of tubes analogy, which was presented by US senator Ted Stevens during a committee hearing in the US senate in 2006.

§High costs to entry for cable broadband[edit]

According to a Wired article by TechFreedom’s Berin Szoka, Matthew Starr, and Jon Henke, local governments and public utilities impose the most significant barriers to entry for more cable broadband competition: “While popular arguments focus on supposed ‘monopolists’ such as big cable companies, it’s government that’s really to blame.” The authors state that local governments and their public utilities charge ISPs far more than they actually cost and have the final say on whether an ISP can build a network. The public officials determine what hoops an ISP must jump through to get approval for access to publicly owned “rights of way” (which lets them place their wires), thus reducing the number of potential competitors who can profitably deploy internet service—such as AT&T’s U-Verse, Google Fiber, and Verizon FiOS. Kickbacks may include municipal requirements for ISPs such as building out service where it isn’t demanded, donating equipment, and delivering free broadband to government buildings.[159]

§Unnecessary regulations[edit]

According to PayPal founder and Facebook investor Peter Thiel, “Net neutrality has not been necessary to date. I don’t see any reason why it’s suddenly become important, when the Internet has functioned quite well for the past 15 years without it…Government attempts to regulate technology have been extraordinarily counterproductive in the past.”[50] Max Levchin, the other co-founder PayPal, echoed similar statements, telling CNBC, “The Internet is not broken, and it got here without government regulation and probably in part because of lack of government regulation.”[160]

FCC Commissioner Ajit Pai, who was one of the two commissioners who opposed the net neutrality proposal, criticized the FCC’s ruling on internet neutrality, stating that the perceived threats from ISPs to deceive consumers, degrade content, or disfavor the content that they don’t like are non-existent: “The evidence of these continuing threats? There is none; it’s all anecdote, hypothesis, and hysteria. A small ISP in North Carolina allegedly blocked VoIP calls a decade ago. Comcast capped BitTorrent traffic to ease upload congestion eight years ago. Apple introduced Facetime over Wi-Fi first, cellular networks later. Examples this picayune and stale aren’t enough to tell a coherent story about net neutrality. The bogeyman never had it so easy.”[55]

FCC Commissioner Mike O’Reilly, the other opposing commissioner, also claims that the ruling is a solution to a hypothetical problem, “Even after enduring three weeks of spin, it is hard for me to believe that the Commission is establishing an entire Title II/net neutrality regime to protect against hypothetical harms. There is not a shred of evidence that any aspect of this structure is necessary. The D.C. Circuit called the prior, scaled-down version a ‘prophylactic’ approach. I call it guilt by imagination.”[161]

In a Chicago Tribune article, FCC Commissioner Pai and Joshua Wright of the Federal Trade Commission argue that “the Internet isn’t broken, and we don’t need the president’s plan to ‘fix’ it. Quite the opposite. The Internet is an unparalleled success story. It is a free, open and thriving platform.”[35]