Wednesday, December 22, 2010

Dedicated to the Socialists at the FCC

The petty statists at the FCC have wrapped the FCC's bureaucratic tentacles around the internet.  This is just the beginning...

What is the problem this "solution" is supposed to solve?

Supposedly it will deal with "...bandwidth hogging sites such as Netflix."  Such language in a free-market with unlimited bandwith potential is not only ignorant, it is especially disturbing coming from a government bureaucrat.  Such interventions pervert the natural market incentives and spark inane arguments over who hogs more bandwidth and whether every child has a “right” to surf YouTube all day.

It's about power and control

What this FCC Beer Hall Putsch really does is establish a precedent.  It's about the Federal Government establishing primacy over the internet.  More regulations on content and speech control will follow.  Further on down the road is the government parceling out internet access and speech "rights."

How the internet works

Net Neutrality is a hard subject to grasp.  It is further befogged by those who discuss the internet as if it were a shared commons with constrained capacity. It is not. It is an agglomeration of competing operators, scalable infrastructure, ISPs and content providers.

Think of it as a network of toll roads (the backbone), that truckloads of products (content providers) use to deliver content to stores all over the US (ISP's).

We customers go to an ISP to get our YouTube and blogs, just like we go to Walmart to buy shotgun shells and DVDs.  ISPs and content providers pay the backbone operators for the bandwidth they use.  They then pass the cost on to us.  It's a great system, but some people just cannot stand the fact that market forces drive pricing.
"Usage-based pricing is a clear positive for cable, telecom, and wireless providers, but it also might be a concern for Netflix," said MF Global analyst Paul Gallant. "Depending on where the tiers were set, usage-based pricing on wire line broadband could end up deterring some people from dropping cable for over-the-top video."

A group of pointy-headed government bureaucrats cannot better determine what customers want than the free market can. Remove the regulations and let each ISP come up with their own pricing plan. That’s how cell phones work. It’s also how cable tv works. If I don't like Verizon I can switch over to Sprint, and I don't need a government nanny holding my hand.

Government should not be favoring one industry over another.  If internet demand grows, companies operating on the free market will build more capacity because they want to make more money off of us consumers. It’s a fair deal. We want more internet, and they risk their capital to build it, recouping their investment when they bring it on line and sell it to us. If it kills cable tv in the process, who cares?  It's a free marketplace--let the best technology win.

Our government does not understand the free market
An FCC official said in a statement that it would be a "cop on the beat" for "arbitrary, anti-consumer, or anti-competitive tiered pricing plans."
What a moron.  What company could make money with "arbitrary" or “anti-consumer” pricing?  Has this imbecilic statist never heard of Walmart, Amazon, or  They would go broke if they were stupid enough to do what this FCC bureaucrat suggests!  This is one more reason why government has no business intervening in the free market. These petty dictators don’t even understand basic economic fundamentals.

And "Anticompetitive?"  Look no further than the US government.  They routinely snuff competition in the energy market (ethanol and wind subsidies, import tariffs on foreign ethanol), automobile and transportation market (battery powered car and Amtrack subsidies), and now they are intervening in the competition between video stores, on-line video providers and cable tv.

This ruling retards the advance of consumer technology

Look at what a lack of government regulation has done to the music industry and cell phones.  We can now listen to whatever we want whenever we want, indy bands can build an on-line fan base without expensive promoters, and we can talk to anyone in the world while paying less for phone service than out parents and grandparents did.

One day, if government gets out of the way, we will all have fiber running to our house, and the possibilities are limitless.  Phone service, tv, movies, live streaming video teleconferencing for the average family.  John Nolte explains what the entertainment future would look like:
What I also see is a world in which absolutely EVERYTHING, every television show, movie, music video, what have you, is made available for mass consumption online. Because there’s no distribution costs beyond converting to the digital file necessary for streaming, we could see, for example, complete episodes of Johnny Carson’s Tonight Show made available. 

With very little upfront investment, anything and everything ever committed to film or video could find itself monetized again. And of course all of it would be available in the best sound and picture quality available.

And for the consumer? Well, that’s the best part. No more video collections clogging up the living room. For X-amount of dollars per month everything ever put on video will be one click away. For a monthly fee, sites like Netflix or Amazon will store your video collections for you.
Unfortunately, many Americans are more interested in professional ball sports or the Kardashians than they are in their freedoms.  Perhaps we could get their attention by giving them a glimpse of what their entertainment future could look like if the government would just get out of the way

Further Reading:
John Nolte - The Future of Home Video
Source-Report - The Internet Backbone
Politico  - Net Neutrality
Robert M McDowell - FCC's Threat to Internet Freedom
WaPo – FCC Market Meddling


OD357 said...

As a Netflix subscriber I stream movies to my TV. If my bandwidth is hampered along the way, it's not Netflix who I scream to, it's my provider. People it's not the content providers that are hogging resources, it's their customers. And every one of those customers use and pay for a pipeline provider. And it will be the customers that force the companies to ease up.

Oh, and another thing. Forget about competition. Most towns only have a single cable provider. (Yeah I know about DSL but I prefer to watch at least DVD quality streams)

Silverfiddle said...

On the cable providers: Many cities, including mine, actually set up a legal monopoly for a single cable provider, due to the extensive infrastructure costs.

Traditional cable and phone lines are relics, in my opinion. Lay down glass on the last mile, and you now have one thin cable running into your home that can carry everything you'd ever need.

There still would be no competition for the infrastructure, but that's the case now for phones and cable.

What this would do is open up competition for all that stuff going through your home's fat pipe: TV, movies, phone, internet, etc.

Mr Beardsley said...

As you mention Silver this is far from a free market. With monopolies already in place in many areas competition is not going to save us. Also you are dealing with infrastructure that uses public land and right aways, ISPs don't own the land they use to build out there infrastructure, so again this is far from an entirely free market. Is every company going to have to lay their own fiber? Who owns the fiber?

To use your toll road analogy, content providers already pay the toll to get their trucks on the road. Consumers already pay to get the trucks to their house. What is happening is that the toll road operator sees that a significant portion of the traffic on their road is coming from certain companies and they want them to pay more.

If I pay for my access to the internet and netflix pays for theirs, why should anyone get charged more because they are using their network connection to stream movies? If ISPs want to sell plans that allow a certain amount of data to be used a month, they can do that no complaints. However, when a government sponsored monopoly wants to charge competing media providers beyond their already paid access, so said monopoly has an advantage is delivering media, then we have a problem.

Rob said...

With the entertainment and electronics industries cramming the "streaming" concept down our throats, they can hardly afford for politicians to get in the way.

And on that side note, I've gotta admit that I'm kinda old-school distrustful of the whole "cloud" movement. Downtime happens. If my data - be it my music, movies, documents, whatever - is all in the cloud, being dished up to me on demand, what happens when I'm offline? Or what happens when something downstream affects my ability to sustain sufficient data transmission rates? Netflix streaming is nice, but certainly not flawless. Bottlenecks do occur and movies do lag and jitter. I still prefer physical media because it gives me more options and more control.

Christopher - Conservative Perspective said...

This is all about control of people and speech. Just like the so-called 'Fairness Doctrine', this is just a backdoor to shutting up conservative sites as the internet has proven to be the next AM radio in alternative media.

Silverfiddle said...

I agree Christopher.

Beardsley: I recall you and I having this debate a few years back. Looks like our positions have hardened.

You say what I already said about the backbone infrastructure. It is in place and there's little room for competition. However, it is scalable and can be increased, and telcos don't all have to be publicly owned.

Content users and content providers should pay market price for their bandwidth.

If the government gets out of the way, you will see plans and pricing tiers tailored to the consumer. This in turn will flow money back to the backbone providers, who will use the funds to increase bandwidth so they can make more money.

Free market capitalism works everywhere it is tried. Government intervention short-circuits market signals.

You're a God-fearing, patriotic conservative, Beardsley, but we just can't agree on this one.

Merry Christmas!

WomanHonorThyself said...

Hey Silver and no libs screeching about this?!..jeez. but hey...TIS THE SEASON!..SO LET'S try to be jolly eh! :) (hugs)

Lisa said...

WHT no libs screeching about this because they agree with shutting down free speech except their own which will backfire on them one day too,useful idiots that they are.

There no rationalization here except they that they want more government control over us.
Too bad so many people are clueless about what is going on.
Oh but if Bush were doing this I am sure they would be pulling out the Nazi Card

Who are these FCC dudes anywyay? They came out of nowhere like Obama did and they are illegally making rules without congressional votes.

Maggie@MaggiesNotebook said...

Silver, excellent explanation for those watching the Kardashians or just trying to get through their day with children and jobs. I linked it in mine.

Silverfiddle said...

Thanks Maggie! I'm proud to pushing back the frontiers of tyranny with bloggers like you!

Anonymous said...

FCC Commissioner Mignon Clyburn at the 2010 Facing Race Conference

Silverfiddle said...

Mark Steyn eviscerated here pretty good filling in for Rush yesterday. She is just another leach on the ass of government. Regulation is killing us as a nation, and she is a career regulator.

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