Today the United States Court of Appeals for the District of Columbia Circuit ruled against Internet at the Speed of Government.
Or more precisely, the court ruled against so-called "net neutrality" in Verizon v.
Proponents of the concept seek to prohibit what they see as preferential treatment and differential pricing on the Internet.
Freedom to vary pricing and service in complex multimedia are essential to creating the next generations of networks, which can’t happen optimally without such fundamental property rights.
The Internet doesn't stop at 2013. We need the holographic version, for starters. So this ruling is a good thing.
The court said:
Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.
If unreasonable and abusive non-neutrality and misbehavior happen, and who knows, occasionally they may, competitive rather than political or bureaucratic responses create the foundation for the robust future communications networks needed. You don't create a universal regulatory superstructure to deal with a rifle shot problem that's itself rooted in FCC's decades old regulatory legacy.
Bureaucracies like FCC benefit from locking in what happens to exist today, preventing that necessary competitive response. In turn they undermine the openness and free speech they claim to enshrine.
It's a good thing that net neutrality, which is not neutral in any sense, be dead and buried. New business are emerging as infrastructure and content firms increasingly overlap, invading each others’ turf. Compulsory "neutrality" makes perpetual enemies out of enterprises that should both compete and cooperate to expand the wonders of ever faster broadband to more and more customers.
Net neutrality is yet another example of economic regulation that flies in the face of every proper tenet of wealth creation and expansion of consumer welfare.
With the clarity created by this ruling, investment in both the Internet as we know it and healthy experimentation can better flourish. We can have both cyberspace and cyberspaces. Onward to Internet 3.0 and beyond.
But philospophy does matter, and the hazard in the ruling is giving a pass to FCC on its flawed "openness" principle, inviting the decades old agency to look for an opening to regulate later, perhaps under some different moniker than "neutrality."
Alas, the Agency may, according to the court, still "promulgate rules governing broadband providers’ treatment of Internet traffic."
The court agrees with FCC's stance that oversight "will preserve and facilitate the 'virtuous circle' of innovation that has driven the explosive growth of the Internet."
So FCC is not likely to give up without fighting for itself (it's certainly not a fight on behalf of consumers), and groups on the left are cheering that prospect. But it will still be wrong.
For a broad survey of why economic regulation of infrastructure pricing and service, not just in telecom, is so profoundly misguided in the modern age, see my series, Before Net Neutrality Eats The World.
I know; there's no time to read it, and you wouldn't want to anyway. So, just scan the titles; they show that tremendous regulatory mischief flows from the "neutrality" concept.
Part 1: Net Neutrality vs. Infrastructure Wealth
Part 2: An Alternative Case for Agency Neutrality
Part 3: The FCC’s Disdain for Markets
Part 4: FCC Order Creates Political Vulnerability for All Market Participants
Part 5: The Fallacies Motivating Net Neutrality
Part 6: Does “Market Failure” Demand Neutrality Regulation?
Part 7: Mandatory Dumb Pipes? But Why Sacrifice Genius?
Part 8: The Essential Elements of Non-Destructive Rulemaking
Part 9: How to Expand Consumer Choice and Access to Content
Part 10: Who’s Discriminating Online?
Part 11: The Inappropriateness of Compulsory Transparency
Part 12: Why Net Neutrality Threatens Homeland Security and Cybersecurity
Part 13: What FCC Should Do Now
Part 14: What Should Congress Do About Net Neutrality?
Part 15: Can We Please End This. Please.
