” Yet again, the government wants to fix a problem that doesn’t exist. According to the Obama administration and the FCC, it is necessary to regulate internet service providers so that they don’t interfere with people’s access to the web. The claim immediately prompts one to ask: Who is being denied access to the web?
In the past twenty years, access to the internet has only become more widespread and service today is far faster for many people — including “ordinary” people — than it was twenty years ago, or even ten years ago. Today, broadband in Europe, where the internet is more tightly regulated, has less reach than it has in the United States.
The administration’s plan is rather innocuously called “net neutrality,” but in fact it has nothing at all to do with neutrality and is just a scheme to vastly increase the federal government’s control over the internet.
What is Net Neutrality?
We don’t know the details of the plan because the FCC refuses to let the taxpayers see the 300-page proposal before the FCC votes on it today. But, we do know a few things.
Currently, ISPs are regulated by the FCC, but as an “information service” under the less restrictive rules of so-called Title I. But now, the FCC wants to regulate ISPs as utilities under the far more restrictive Title II restrictions. For a clue as to how cutting edge this idea is, remember this switch to Title II regulation would put ISPs into the same regulatory regime as Ma Bell under the Communications Act of 1934.
So what does this mean for the FCC in practice? According to FCC Commissioner Ajit Pai, “It gives the FCC the power to micromanage virtually every aspect of how the Internet works.” More specifically, Gordon Crovitz at the Wall Street Journal writes:
[With Net Netruality,] bureaucrats can review the fairness of Google’s search results, Facebook’s news feeds and news sites’ links to one another and to advertisers. BlackBerry is already lobbying the FCC to force Apple and Netflix to offer apps for BlackBerry’s unpopular phones. Bureaucrats will oversee peering, content-delivery networks and other parts of the interconnected network that enables everything from Netflix and YouTube to security drones and online surgery.
The administration insists these measures are necessary because — even though there is no evidence that this has actually happened — it is possible that at some point in the future, internet service providers could restrict some content and apps on the internet. Thus, we are told, control of content should be handed over to the federal government to ensure that internet service providers are “neutral” when it comes to deciding what is on the internet and what is not.
Can Goods Be Allocated in a “Neutral” Way?
The problem is that there is no such thing as “neutral” allocation of resources, whether done by government or the marketplace.
In the marketplace, goods and services tend to be allocated according to those who demand the goods the most. Where demand is highest, prices are highest, so goods and services tend to go to where they are most demanded. This makes perfect sense, of course, and also reflects the inherent democracy of the markets. Where larger numbers of people put more resources is where more goods and services will head.
It is this mechanism that drives the marketplaces for food, clothing, and a host of other products. Consequently, both food and clothing have become so plentiful that obesity is a major health problem and second-hand clothing stores, selling barely-worn discarded clothing, are a boom industry, even in affluent neighborhoods. Similarly, cell phones have only become more affordable and more widespread in recent decades.
For industries where new firms may freely enter, and customers are not compelled to buy, companies or individuals that wish to make money must use their resources in ways that are freely demanded by others. Unless they have been granted monopoly power by government, no firm can simply ignore its customers. If they do, competing firms will enter the marketplace with other goods and services.
Although goods allocated in this fashion are — according to the administration — not being allocated “neutrally,” the fact is that more people now have more service at higher speeds than was the case in the past. Furthermore, even if firms (or the government) attempted to allocate goods in a neutral manner, it would be impossible to do so, because neither society nor the physical world are neutral.
In his recent interview on new neutrality, Peter Klein used the analogy of a grocery store. In modern-day grocery stores, suppliers of food and drink will negotiate with stores (using so-called “slotting allowances”) to have their goods advertised near the front of the store or have goods placed on store shelves at eye level.
If government were to tell grocery stores to start being more “neutral” about where it places goods, we can see immediately that such a thing is impossible. After all, somebody’s goods have to be at eye level or near the front of the store. Who is to decide? A handful of government bureaucrats, or thousands of consumers who with their purchases control the success and failure of firms?
In a similar way, bandwidth varies for various ISP clients depending on the infrastructure available, and the resources available to each client. And yet, in spite of the administration’s fear-mongering that ISPs will lock out clients of humble means, and the need to hand all bandwidth over to plutocrats, internet access continues to expand. And who can be surprised? Have grocery stores stopped carrying low-priced nutritious food such as bananas and oatmeal just because Nabisco Corp. pays for better product placement for its costly processed foods? Obviously not.
Who will Control the FCC?
All goods need not be allocated in response to the human-choice-driven price mechanism of the marketplace. Goods and services can also be allocated by political means. That is, states, employing coercive means can seize goods and services and allocate them according to certain political goals and the goals of people in positions of political power. There is nothing “neutral” about this method of allocating resources.
In the net neutrality debate, it’s almost risible that some are suggesting that the FCC will somehow necessarily work in the “public” interest. First of all, we can already see how the FCC regards the public with its refusal to make its own proposals public. Second, who will define who the “public” is? And finally, after identifying who the “public” is, how will the governing bodies of the FCC determine what the “public” wants?
It’s a safe bet there will be no plebiscitary process, so what mechanism will be used? In practice, bureaucratic agencies respond to lobbying and political pressure like any other political institution. Those who can most afford to lobby and provide information to the FCC, however, will not be ordinary people who have the constraints of household budgets and lives to live in places other than Washington, DC office buildings. No, the general public will be essentially powerless because regulatory regimes diminish the market power of customers.
Most of the interaction that FCC policymakers will have with the “public” will be through lobbyists working for the internet service providers, so what net neutrality does is turn the attention of the ISPs away from the consumers themselves and toward the regulatory agency. In the marketplace, a firm’s customers are the most important decision makers. But the more regulated an industry becomes, the more important the regulating agency becomes to the firm’s owners and managers.
The natural outcome will be more “regulatory capture,” in which the institutions with the most at stake in a regulatory agency’s decisions end up controlling the agencies themselves. We see this all the time in the revolving door between legislators, regulators, and lobbyists. And you can also be sure that once this happens, the industry will close itself off to new innovative firms seeking to enter the marketplace. The regulatory agencies will ensure the health of the status quo providers at the cost of new entrepreneurs and new competitors.
Nor are such regulatory regimes even “efficient” in the mainstream use of the term. As economist Douglass North noted, regulatory regimes do not improve efficiency, but serve the interests of those with political power:
Institutions are not necessarily or even usually created to be socially efficient; rather they, or at least the formal rules, are created to serve the interests of those with the bargaining power to create new rules.
So, if populists think net neutrality will somehow give “the people” greater voice in how bandwidth is allocated and ISPs function, they should think again.
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute. “
Tag Archive: Scam
” Border Patrol agents in olive uniforms stood in broad daylight on the banks of the Rio Grande, while on the Mexican side smugglers pulled up in vans and unloaded illegal migrants.
The agents were clearly visible on that recent afternoon, but the migrants were undeterred. Mainly women and children, 45 in all, they crossed the narrow river on the smugglers’ rafts, scrambled up the bluff and turned themselves in, signaling a growing challenge for the immigration authorities.
After six years of steep declines across the Southwest, illegal crossings have soared in South Texas while remaining low elsewhere. The Border Patrol made more than 90,700 apprehensions in the Rio Grande Valley in the past six months, a 69 percent increase over last year.
The migrants are no longer primarily Mexican laborers. Instead they are Central Americans, including many families with small children and youngsters without their parents, who risk a danger-filled journey across Mexico. Driven out by deepening poverty but also by rampant gang violence, increasing numbers of migrants caught here seek asylum, setting off lengthy legal procedures to determine whether they qualify.
The new migrant flow, largely from El Salvador, Guatemala and Honduras, is straining resources and confounding Obama administration security strategies that work effectively in other regions. It is further complicating President Obama’s uphill push on immigration, fueling Republican arguments for more border security before any overhaul.
With detention facilities, asylum offices and immigration courts overwhelmed, enough migrants have been released temporarily in the United States that back home in Central America people have heard that those who make it to American soil have a good chance of staying.”
SECURE THE F***ING BORDER !!
NY Times … Of course this wouldn’t have anything to do with the fact that virtually no one gets sent back under Obama’s Border patrol policies or the impending
immigration reform bill amnesty . Nah , only a cynic would think like that .
” More than 2.1 million Americans selected private health plans through healthcare.gov and state-run websites through Dec. 28, the Obama administration announced today. Another 1.6 million were judged eligible for Medicaid, the federal-state insurance program for the poor. Most of the new enrollees in private health plans—1.8 million—signed up in December, after the White House relaunched the Affordable Care Act’s stuttering website on Dec. 1.
Most of the people who bought coverage on the exchanges this fall got subsidies to help them afford the premiums. That’s in contrast to the first month of the program, when less than one-third of buyers were subsidized. People earning up to four times the poverty rate—as much as $96,000 a year for a family of four—can get help buying coverage.”
Business Week has more
” In 2008, then-candidate Barack Obama promised to create 5 million “green jobs” if elected president. However, an analysis by the Institute for Energy Research (IER) finds that since 2009, the Department of Energy’s (DOE) $26 billion loan program created just 2,298 permanent jobs, at a cost of $11.45 million per job created.
In his New York Times bestselling book Throw Them All Out, Government Accountability Institute President Peter Schweizer revealed that 80% of Department of Energy loans went to companies owned by or connected to President Barack Obama’s top campaign fundraisers.”
“One of the Biggest and Most Elaborate Falsehoods Ever Sold to the American Pubic” (The Bank Bailouts)
” One thing, which I wish Taibbi had emphasized more is that it looks increasingly like credit would not have “seized up” across the board, for very long anyway had the big banks been allowed to fail. The mid-sized banks and the community banks, which lacked exposure to much in the way of toxic assets (because they sold them off to the big banks which then folded them into Mortgage Backed Securities) would have survived. It would have been bumpy but well run banks just outside of big bank status, BB&T for instance, would have filled in the space.
The bailout was, as David Stockman says, a Wall Street crisis. The bankers all freaked out when their bets turned terrible, and then played the information leverage game with Washington to get the tax payers to pay for their mistakes. They basically said that the entire economy was going down (it wasn’t) and therefore an unprecedented abandonment of what was left of our market based economy was justified. It was a giant con. ”
Illustration By Mike Keefe
- Taibbi reveals the lies (snohomishobserver.com)
- Matt Taibbi really, really hates the bailout (seldo.tumblr.com)
- Taibbi: Secret and Lies of the Bailout (jessescrossroadscafe.blogspot.com)
- The Government Lied When It Said It Only Bailed Out Healthy Banks … 12 of the 13 Big Banks Were Going Bust (washingtonsblog.com)
- What Chutzpah! AIG Wants to Sue the Govt After Taking $25 Billion from Them — Taibbi Shreds Wall St. Lies (alternet.org)
- Matt Taibbi on the Biggest Wall Street Scandal of 2012 (sgtreport.com)
- Secrets and Lies of the Bailout (blacklistednews.com)
“There is no reason to believe that Grindler
deceived Attorney General Holder about
this or any other matter, and it is frankly
curious that Chairman Issa and Senator
Grassley are accepting this farfetched
explanation. Unfortunately, unless a
criminal case is eventually filed to compel
Grindler to provide more information, it is
likely that his termination is the last we’ll
hear of his role in the cover-up.
Grindler is not the only DOJ official who has
apparently been forced out. The Bureau of
Alcohol, Tobacco, Firearms and Explosives
(ATF) has reportedly fired three officials and
demoted two, while
One of the companies, German-owned SolarWorld, was integral in the fight for tariffs against the importation of Chinese photovoltaic solar panels. The other, Chinese company SunTech, blamed those tariffs for its own layoffs.
Both companies benefited from the Energy Department’s stimulus-funded Advanced Energy Manufacturing (48C) Tax Credit. The 48C credit is worth up to 30% of the cost of manufacturing qualifying green energy projects.
Both companies announced this week that they will shed some employees. SolarWorld, which announced a 47% revenue decline in the third quarter, blamed a potential 37 layoffs at its Oregon plant on “illegal” Chinese trade practices.”
Illustration By Glenn McCoy
” The Wall Street Journal is reporting that the release of the Jobs Report (which is typically released on the first Friday of each month) for October could be delayed until after the federal election takes place next Tuesday because of Hurricane Sandy. “
” “Bin Laden is dead and General Motors is alive.” That’s what the Democrats keep telling us. Sure, their jingoism came back to bite them in Benghazi, but at least the GM part is still true.
Workers at LG Chem, a $300 million lithium-ion battery plant heavily funded by taxpayers, tell Target 8 that they have so little work to do that they spend hours playing cards and board games, reading magazines or watching movies… “
“Making batteries for electric cars is a dirty process, and if the electric cars are run off a grid which is primarily powered by coal, as it is in China, the environmental benefits completely disappear.
Of course, this is not the only example of green policy being counterproductive. Ethanol is another case of expensive green reform that actually makes things worse. This movement just isn’t ready for primetime.”
“Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.
Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.
And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others.”
In ”Shadowbosses: Government Unions Control America and Rob Taxpayers Blind,” Mallory Factor describes a December 9, 2008 memo from Service Employees International Union (SEIU) Healthcare president Dennis Rivera to the Obama-Biden transition team.”
ViaMeadia reports on yet another of the near daily reports of massive corruption in the “Green Energy” – AGW campaign .
” Behold a green failure so colossal even ViaMeadia is surprised: a UN carbon-credit trading program intended to reduce global
concentrations of greenhouse gases has instead led a handful of factories in the developing world to massively increase them. ”
” The carbon credits represent such a lucrative business ($20–40 million per year per plant, by
one estimate) that some of the plants participating the scheme, located mostly in China and India, made the bulk of their profits from carbon credits alone; other plants would hit their carbon-credit subsidy limits and then shut down for the rest of the year. “
That’s some investment Barack .
” which includes not just spending on highways, but subsidies for Amtrak and Obama’s high-speed rail plans as well. ”
It’s even less significant when you consider that it includes underwriting that perennial money loser Amtrak AND Obama’s pipedream highspeed to nowhere rail plans .
Yes our Dear Leader has a fine grasp of economics and job creation .
As this NY Sun editorial makes abundantly clear , the Fed doesn’t work for us , the people , it works for the government and the banks .
” We’ve often thought of that harbinger in the context of the current crisis over the fiat dollar, but it was all brought together in column by Judy Shelton in today’s Wall Street Journal. She notes that many in America “fear that our nation is going the way of Europe —becoming more socialist and redistributionist as government grows ever larger.” But, she warns, “the most disturbing trend may not be the fiscal enlargement of government through excessive spending, but rather the elevated role of monetary policy.” She’s referring to the way the Federal Reserve, as she puts it, “uses its enormous influence over banking and financial institutions to channel funds back to government instead of directing them toward productive economic activity.” “
” Solar-cell manufacturer Solyndra became a household name when it collapsed, taking $627 million in American taxpayer dollars with it. It’s the poster company for the government picking winners and losers—or really, just losers—in the energy market. But there are 12 more “green energy” losers that have declared bankruptcy despite attempts to prop them up with taxpayer money—and the list is growing.
There’s a reason why these companies could not rely solely on private financing and needed help from the government. They couldn’t make it on their own; they couldn’t even make it with extra taxpayer help “
He’s as adept at investing as he is at job creation .
“SAN FRANCISCO — At an exclusive re-election fundraiser tonight, President Obama hobnobbed with 60 of his wealthiest supporters, including two figures at the center of the Solyndra loan controversy.”
“Sipsey Street Exclusive: Stratfor’s
“intelligence” analysis of Gunwalker
less than persuasive. ATF’s new target: “The Attack of the Eighty Percent Receiver.”
The myths and buzz words seldom cease from the agenda-driven media but we thought StratFor was seeking to provide a move valuable intelligence product than that .
Republicans, from Mitt Romney, the party’s presidential candidate, to the congressional leadership, have madeBarack Obama’s alleged stifling of the energy industry a centrepiece of their campaigns this year. . . .
Mr Romney has said he will approve the Keystone XL pipeline as soon as he wins office and curb the powers of the Environmental Protection Agency.
“Only time will tell whether this is a winning strategy, but there is reason to think it could work. As we’ve mentioned before, energy politics is an area where Obama is particularly vulnerable. His decision to nix the popular Keystone pipeline earlier this year signaled antipathy toward one of America’s strongest industries while doing nothing to help the environment; it was lambasted as a pointless blunder by observers on both sides of the aisle.” “
Does anyone notice a pattern here ? It pays handsomely to be a friend of Obama .
“New disclosures show that one of President Obama’s bundlers is the wife of an executive at an energy company that received a more-than- $1.2 Billion Department of Energy (DOE) loan guarantee for a solar power plant.
Arvia Few is a bundler for the Obama re-election campaign who has promised to raise between $50,000 and $100,000. She began bundling for Obama in the first quarter of
Her husband , Jason Few , is an executive at a company that has benefited handsomely from the Obama administration’s clean energy spending, records show. ”
$500,000,000.00 a thousand words .
Thanks to a sharp eyed reader over at Legal Insurrection
This crowd really needs to be shown the door . I’m embarassed to say that the Republicans are hip deep in this sleight-of-hand deceit .
TERM LIMITS NOW-ONE AND DONE !!!
“The use of commemorative coins to steer money to pet projects is nothing new, as Heritage Action’s Ashe Schow noted this morning. From 1982 to 2009, the U.S. Mint has produced 92 such coins – a rate of 3.4 coins per year. But the 112th Congress alone has introduced 14 commemorative coin bills, a significant uptick.”