The Fallacy of Net Neutrality (Encounter Broadsides)

“There is little dispute that the Internet should continue as an open platform,” notes the Federal Communications Commission. Yet in a curious twist of logic, the FCC has moved to upend the rules yielding that outcome, imposing “network neutrality” regulations on broadband-access providers. The new mandates purport to prevent Internet “gatekeepers” by prohibiting networks from

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“There is little dispute that the Internet should continue as an open platform,” notes the Federal Communications Commission. Yet in a curious twist of logic, the FCC has moved to upend the rules yielding that outcome, imposing “network neutrality” regulations on broadband-access providers. The new mandates purport to prevent Internet “gatekeepers” by prohibiting networks from favoring certain applications.

In this comprehensive Broadside, Thomas W. Hazlett explains the faulty economic logic behind the FCC’s regulations. The “open Internet”—thriving without such mandates—allows consumers, investors, and entrepreneurs to choose the best platforms and products, testing rival business models. Networks are actively (and efficiently) involved in managing traffic and promoting popular applications, making the entire ecosystem more valuable. This is a spontaneous market process, not a planned structure, and the commission’s restrictions threaten to stifle innovation and economic growth.

Comments

Andrea Twain says:

Hazlett triumph! A must-read for students if the administrative state and Economics. Hazlitt lays out his thesis and supporting information in an easy-to-understand Prize. Not just for geeks, for the lay reader as well as the practitioner.

Fritz R. Ward says:

Regulation (almost) always Benefits Big Business The FCC under the Obama adminstration, ever concerned about consumer welfare, decided in 2010 to impose a policy of “net neutrality” on internet providers. The goal was to prevent these “gatekeepers” from leading their clients to sites they preferred and would financially benefit from. The net, regulators argued, should be free and open, not controlled by a few large search engines. Who could complain about that? It was a classic case of government stepping in to protect the interests of…

M. Heiss says:

Regulation kills innovation This book is important. 

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