Libertarian (and Conservative) Lunacy

The debate over net neutrality has caused a split in the American right. Significant portions of our side have defected to the side of Bernie Sanders and Elizabeth Warren. Reason Magazine editor, Robby Soave summarized the two sides well on Twitter, “arguments against [net neutrality] are usually well-reasoned and moderate. Arguments for it are consistently hyperbolic, apocalyptic, and prone to anti-market bias.”

The net neutrality crowd basis their arguments on false premises, historical ignorance, hypothetical’s, and, in the case of the right-wing supporters, delusions.

The first of these false premises is their rallying cry, “all bits are created equal”. While true, that is not the issue. No one denies a single bit is equal to any other bit, but the question is how do these packages compare. Boston University Law Professor Keith N. Hylton illustrates the actual issue in his 2016 journal article.

“Consider a toll bridge with two types of users: ordinary cars, and heavy trucks. The difference between the two is that the heavy trucks are more costly to the bridge owner to service because they impose more congestion on bridge traffic. Congestion reduces the flow of traffic over the bridge, thereby increasing the average cost of the service. In addition, the trucks impose more depreciation (wear and tear) on the bridge. A profit-maximizing bridge owner would adopt a system of ‘‘discriminatory’’ Ramsey price…”

Let me put this in more concrete terms. Netflix, for example, uses almost thirty-five percent of North America’s bandwidth while YouTube uses fourteen percent. These two services alone combine for almost half of North America’s bandwidth usage. As Hylton puts it, “Consumers of internet services are not identical: they demand different services, which impose dissimilar costs on broadband firms. Consequently, net neutrality requires some consumers to subsidize the consumption of others. In this sense, net neutrality is not neutral at all: it forces A to pay for the consumption of B. Viewed from this perspective, net neutrality is a form of differential pricing.”

The second argument used by net neutrality supporters is historical ignorance. While citing their apocalyptic hypothetical’s, they forget the net neutrality regulations being debated did not come into existence until 2015. If my memory serves, the internet was not a barren wasteland until 2015. Studies found of this time found “no credible basis” to believe the broadband market was noncompetitive. Nobel Laureate and University of Chicago economist Gary Becker and his Chicago colleague Dennis Carlton found “significant and growing competition among broadband access providers and that few significant competitive problems have been observed to date.”

Net neutrality proponents will attempt to respond to this with a few arguments, all of which fall into the general camp of a local problem and none of which show a significant and widespread problem. Their most prominent point is the Comcast forcing Netflix to pay more. As Piggybacking off what I showed above, this had nothing to do with evil motives but a simple business decision of who to push-off costs to– Comcast customers or Netflix.

Such localized “problems” are not enough for net neutrality promotes. To up the ante and increase the potency of their arguments, they engage is baseless hypothetical’s– the third argument. Often these have to do with ISP’s censoring political opposition or business rivals. These arguments will often be accompanied by phrases like “in theory” because that is all this is. A theory.

The last argument comes from libertarians and conservatives. The argument is simple, we need more government to solve problems caused by government. The usage of this argument by free market supporters is what I would call irony. It would be the equivalent of saying we need single-payer until we get a free market in healthcare.

As any self-respecting free market supporter should tell you, the solution to a government caused problem is not more government but less government. Even when the choice is between the status-quo and an increase of government, the preference should be to the status quo. Often, this line of argument is the nuance that this is only a temporary measure until we can get to a freer market in broadband. These same libertarians would never buy this argument in any other circumstance. Although deregulation occasionally does happen, the rarity of it makes it a terrible tactical decision to advocate more regulation as a short-term solution.

The argument for net neutrality can be made excessively messy and complicated by lies and half-truths. Neither side is composed of angles, but facts do not need Angeles. In a review of the economic literature by five leading economists, it was found that net neutrality can, but not necessarily, harm consumers, content providers, network providers and investors. They also found no evidence that the opposite was ever true. Translation, net neutrality can be neutral or harmful but never beneficial. A regulations existence should depend on its ability to stop harm– not its lack of harm.

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