Policy Documents

Net Neutrality

Brian Costin –
March 28, 2008

When it comes to property rights and a free market, net neutrality is not "neutral" in any sense of the word.

Supporters of net neutrality legislation seek to expand the Federal Communications Commission's regulatory powers over the Internet through new mandates that would define and regulate access to the Internet. The proposal would prevent network providers from providing tiered service, where customers could pay for different levels of access. This is, essentially, a crude form of a price control.

With the Internet growing and more users logging in every day, a much greater capacity will be needed in the future to accommodate demand. Pricing restrictions will make it less likely that companies will be able--or willing--to meet the growing demand. This, in turn, will threaten the economic viability of not only network providers, but all industries that depend on the Internet.

Net neutrality proponents frequently invoke the U.S. Constitution's First Amendment protection of free speech. But that amendment constrains the powers of government to limit free speech. When it comes to peer relations between citizens, free speech rights for an individual or group end where another's property rights begin. Those who support net neutrality would essentially force Internet providers to provide access and transmit data they find objectionable or technologically difficult, thus eliminating the Constitution's protection of property and free speech rights for those Internet providers.

Net neutrality infringes upon the Constitutional rights and economic viability of Internet service providers. Consumers who value neutrality should seek out and reward service providers that promise to handle their network traffic in a neutral way. Instead of using government to manipulate markets forcibly, the supporters of net neutrality should use the forces of cooperation and competition among Internet service providers to achieve their goals. The proper role for government here is to enforce the contracts made between consumers and providers, and to avoid violating Constitutional principles for the benefit of one party over another.

The following articles address some network neutrality and may prove useful as you endeavor to keep on top of this debate.


'Net Neutrality?' A Really Dumb Idea
http://www.heartland.org/Article.cfm?artId=22810
Thomas Lipscomb explains how net neutrality will handicap the companies that will provide the space for networks to develop in the future to meet growing demands.

Network Neutrality and the States
http://www.heartland.org/Article.cfm?artId=20347
This article addresses the various problems presented by state-level net neutrality regulation.

Cable Guys
http://www.aei.org/publications/filter.all,pubID.24951/pub_detail.asp
James Glassman explains how past attempts at government regulation of information networks have raised prices, while allowing competition has caused great decreases in price.

MPAA Chief: Net Neutrality Hamstrings Anti-Piracy Efforts
http://www.ecommercetimes.com/story/MPAA-Chief-Net-Neutrality-Hamstrings-Antipiracy-Efforts-62116.html?welcome=1205524912&welcome=1205768681
The chief of the Motion Picture Association of America speaks to the fact that net neutrality will hinder efforts to stop piracy, which could have very damaging effects across the entertainment industry.

Is the Net Too Neutral?
http://www.technologyreview.com/Biztech/20394/
Reporter Larry Hardesty of Technology Review, an MIT publication, suggests that letting networks be managed with cooperation among operators and content distributors using information about what is being transferred will lead to faster and more efficient networks, while government regulations will drag network speed and efficiency down to the slowest common denominator.

The Internet Traffic Challenge: The Policy Dimension
http://bits.blogs.nytimes.com/2008/03/13/the-internet-traffic-challenge-the-policy-dimension/?ref=technology
This New York Times blog raises the point that network infrastructure investments will be needed required to develop high-speed networks to support increased Internet traffic. Such investments would be stifled by net neutrality regulations, as few companies will be interested in developing faster networks if they can't charge more for them.

The Natural End to Net Neutrality: Let the Lawyers Win
http://www.heartland.org/Article.cfm?artId=19253
Here a co-existence example is imagined, where both private and public networks exist. We would see, it is argued, the inexorable shift to private networks because most Internet consumers need high-quality service. But if both public and private networks were permitted, price differentiation would be possible and investments would be encouraged.


For further information on this and other free-market topics, visit The Heartland Institute's Web site at http://www.heartland.org and PolicyBot , Heartland's free online research database.

If you have any questions about this issue or The Heartland Institute, you may contact me at 312/377-4000 or bcostin@heartland.org.