Ruling on FCC Authority Skirts Net Neutrality Issue

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As much as one might agree with the general sentiment espoused by the Federal Communications Commission about net neutrality, the concept is illegal under the law.

Of course, courts prefer to rule on the most obvious issues first, so the whole issue of net neutrality has basically been set aside for a few years while we wait for Congress to decide who should have authority to regulate the Internet. Given that a federal court ruled that the FCC has no explicit authority to regulate the Internet at the moment doesn't mean that some government body shouldn't have that authority. All the court is really saying is that we forgot to create a law specifically granting that authority to somebody.

In the meantime, net neutrality issues will continue to fester. While on its face net neutrality sounds like a desirable thing, it seeks to thwart the role of competition in free markets to govern the ultimate outcome of goods and services. Carriers may want to limit access to bandwidth based on consumption, but there will always be another carrier willing to compete for that business. If any legal issue needs to be addressed, it should be making sure that there are enough carriers in the market to prevent an oligarchy from effectively controlling prices for Internet access.

Since carriers own the gear used to access the Internet, they have the right to regulate its use even if the Internet was fundamentally built using tax dollars. If you want to guarantee net neutrality, then those same taxpayer dollars would have to be used to purchase equipment and services that enable people to access it.

Given the cost of doing that and that nobody is being harmed yet by carriers limiting the access of any content provider to the Internet, the probability of that happening is next to zero.

In fact, the whole net neutrality debate is pretty much an exercise by venture capitalists to make sure by legal fiat that the thousands of content services that they hope will probably be bought one day by Microsoft or Google will have access to all the Internet bandwidth they need for free.

This argument assumes that carriers should transport unlimited content no matter the cost. This is roughly equivalent to trying to run a restaurant with no control over the portions that customers can consume.

Of course, there is potential for abuse on the carriers' part. But in this country at least, regulations that are being promoted because we're afraid something might happen have never gained much support. We should wait to see if the free market is incapable of addressing the net neutrality issue before acting.

In the meantime, the courts have already shown sensitivity to a fundamental principle: Two wrongs don't make a right. In much the same way that people might want of limit the amount of influence lobbyists exercise during an election, limiting the amount of money that can be contributed to a campaign violates the basic principles of freedom of speech.


Similarly, telling carriers how they can use their own gear essentially abrogates the whole point of a having a free-market economy in the first place. So rather than create flawed precedents that could be broadly applied in unimaginable ways in the future, the right thing to do is address the fundamental lack of competition among the carriers. That, of course, is something that we have tried and failed to do a number of times. But if a divided Congress can pass a contentious national health care plan, then eventually it can arrive at some sort of rational approach for promoting carrier competition as well.