Neutralism: The Strange Philosophy Behind the Movement for Net Neutrality (Executive Summary)

This Heartland Policy Study by telecommunications and information technology expert James G. Lakely examines the philosophy that underlies the movement for network neutrality. “Neutralism” is a strange and radical philosophy that stands in striking contrast to the innocuous-sounding Internet “freedom” its advocates call for. Understanding the philosophy of neutralism helps explain why network neutrality would have consequences that are quite the opposite of what its proponents claim.

This study examines the philosophy that underlies the movement for network neutrality, which telecom expert Scott Cleland has dubbed “neutralism.” Neutralism stands in striking contrast to the innocuous-sounding Internet “freedom” its advocates call for. Not all advocates of network neutrality believe in neutralism, and some aren’t even aware that the policy arose from such a strange philosophy. One purpose of this paper is to inform those neutrality advocates of the radical agenda they have unwittingly bought into.

1. What Is Network Neutrality?

Network neutrality is the label given to a set of ideas aimed at increasing the rights of Internet users to control the service they receive from Internet service providers. Common Cause, for example, defines it as “the principle that Internet users should be able to access any web content they choose and use any applications they choose, without restrictions or limitations imposed by their Internet service provider.”

Virtually all businesses favor network neutrality in the abstract, since it addresses a trust problem that is inherent in networked enterprises. Businesses that depend on the networks seek assurance that they will not face extortion from the networks in the long run. The networks, in turn, have no easy way to provide them with this assurance. This is not a new problem (railroads faced it too), and it is taken seriously even by proponents of free-market solutions.

Network neutrality has become a public policy controversy because some of its advocates call for regulations spelling out in detail what ISPs can and cannot do. These advocates frame network neutrality as a matter of free speech rights that could be violated if network providers discriminate among messages based on their origin or content. Critics say the risk that such discrimination might harm consumers is very low, whereas new regulations could discourage the investment and innovation that made possible the spectacular growth of the Internet in recent years.

2. Neutralism: The Philosophy behind Network Neutrality

Neutralists see digital information and communications networks as a public commons, such as a park or an interstate highway. They oppose the idea actually, the reality that broadband networks, software, and content should be privately owned or operated by private companies competing for customers. Neutralists believe:

• digital technology, if unshackled from ownership restrictions and payment requirements, is a powerful means for creating a more egalitarian society;

• the end-to-end design of the Internet creates a digital commons that is open to decentralized innovation; and

• the Internet, because it is necessary for democratic discourse, should not be controlled by market players.

This view goes beyond seeing broadband Internet access as similar to electricity a service so essential that governments (presumably) ought to regulate its private-sector providers as public utilities and calls for complete and outright government ownership.

Neutralists take for granted the enormous investments made by private companies in hardware, software, content, marketing, and consumer services. They look at the digital economy and see the conditions they believe are necessary for a more egalitarian common ownership of the means of production and distribution of data the nationalization or socialization of the Internet.

3. The History of Neutralism and its Advocates

The core premise of neutralism can be found in the definition of “free software” found on Richard Stallman’s Free Software Foundation Web site: “Free software is a matter of the users’ freedom to run, copy, distribute, study, change and improve the software. Being free to do these things means that you do not have to ask or pay for permission.”

Stallman has little use for the Founding Fathers’ idea that intellectual property rights are one of the keystones of individual liberty. According to Stallman, “we are not required to agree with the Constitution or the Supreme Court. (At one time, they both condoned slavery.)” Copyright law, by Stallman’s lights, is “a radical right-wing assumption rather than a traditionally recognized one,” and he hopes his manifesto “will weaken its appeal.”

Other leading neutralists include Eben Moglen, whose 2003 book, The dotCommunist Manifesto, presents an explicitly Marxist vision of technology policy. Lawrence Lessig, Tim Wu, and Yochai Benkler are other academics and writers who have been instrumental in the movement for network neutrality and whose ideas are far to the left of mainstream thought. An organization called the Free Press, founded by an avowed Marxist whose goal is socialist “revolution” and “eliminating telephone and cable companies,” is one of the most vocal advocates of network neutrality.

Have President Obama, the chairman of the FCC, and other advocates of network neutrality bought into the far-left philosophy of neutralism? Or have they overlooked the radical agenda of their allies?

4. Neutralism and the Public Utility Argument

Proponents of neutralism know they cannot have their way on the Internet all at once, so they pursue a strategy of achieving the goal of a government-run system incrementally. That journey begins by convincing the public that the private telecommunications and cable companies that currently deliver broadband access ought to be regulated the same way as electric and water utilities. However, a compelling case can be made that the public utility model of regulation is inappropriate for broadband.

Broadband fails to fit the standard utility model in many ways. For instance, conventional utilities are based on single-use-facility, while broadband provider facilities are multi-use. The converged telecom plant offers phone, wireless, high-speed, and video; the converged cable plant offers video, phone, high-speed, and increasingly wireless; the converged wireless plant offers wireless, high-speed, and video; and the converged satellite plant increasingly offers video and high speed. And unlike utility services, broadband network congestion can cause latency problems for voice or real-time services and jitter quality problems for video or high-bandwidth applications.

The public utility model isn’t even consistent with the neutralists’ own ideas and arguments. Many of the people who want to turn the current “dumb” electrical grid into a “smart” electrical grid want to turn the current “smart” broadband grid into a “dumb” end-to-end network grid. Equally confounding and contradictory, many of those who want broadband to be regulated as a public utility don’t want broadband to be usage-priced like electricity, water, and other goods delivered by public utilities.

5. Neutralists Target the Wireless Sector

The neutralists have had to jigger the arguments they use against wireline phone and cable companies to make them work against the emerging wireless broadband sector all the while carefully ignoring that the sector’s very existence is evidence of the competition and innovation they claim is suppressed by the status quo. Not only does neutralism not work as a model for understanding the wireless sector, but the attempt to apply network neutrality to the wireless sector demonstrates the negative consequences of that flawed policy prescription.

Slow-moving government processes are generally antithetical to creating an environment conducive to innovation. History shows that allowing consumers to choose the best technologies by voting every day with their pocketbooks in the fast-paced marketplace fuels the most innovation. The idea that slow-moving government regulation could be the enabling source of fast-paced market innovation in the wireless sector defies both common sense and the vast evidence of the past 15 years of fierce wireless competition in the marketplace.

6. How Net Neutrality Could Ruin the Internet

While “neutrality” connotes passivity, what the neutralists actually desire is a more activist government imposing more control over the Internet substituting the decisions of a handful of bureaucrats for the voluntary choices of millions of individual consumers and businesses. They propose to do this even as the present, property-rights based, approach to managing the Internet has produced tremendous success by every measure. Total Internet traffic in the United States, for example, has risen from about 1,000 terabytes per month in 1996 to more than 1 million terabytes per month in 2008. The cost of accessing the Internet and storing data online has fallen just as dramatically. These enormous leaps were created by market competition and made possible by billions of dollars in private investments.

Neutralists say the adoption of proprietary, exclusionary business models must be outlawed to protect consumers, but the vast majority of consumers haven’t experienced any infringements of their Internet freedom and never will. When ISPs have imposed unacceptable bandwidth caps (or even contemplated doing so), consumers balked and the companies backed down. In other words, the market issued a swift correction.

The post-scarcity neutralnomists comprehend that we are, to some extent, past an older paradigm of economics. But they don’t understand the new paradigm involves a new definition of cost and choice choice not only of how best to achieve a pre-defined set of goals with a pre-defined set of means, but choice of goals given expanding means. This new economic reality further restricts government’s ability already seriously in doubt -- to intervene and “fix” market imperfections to improve outcomes.

7. Conclusion

Network neutrality enjoys broad support among the businesses that have a stake in the growth and success of the Internet. What is controversial is whether the principles of network neutrality should be turned into regulations that would prohibit activities, such as tiered pricing and “throttling” heavy users of bandwidth, that some ISPs have expressed interest in using. Some advocates of these regulations are oblivious to the philosophy that lies beneath their position.

This study shows how the philosophy of the neutralists is deeply at odds with the existing market-based model of Internet investment and management. From the founding of the “copyleft” movement, to the publication of The dotCommunist Manifesto, to modern attempts to foist net neutrality upon the Web and wireless technology, the neutralists have made their aims clear. “Big Business” must be brought to its knees all the better to pray for mercy (or at least permission to operate) from government bureaucrats who will replace consumers in deciding how broadband networks are run and how content will flow.

Neutralists have cleverly exploited the language of freedom to advance their goals calling for a “free” and “open” Internet, and declaring the market guilty of “discrimination” and “unfair practices.” But the Internet is already “open” and “free” in the sense that the technology sector is open to the next competitor to produce the next groundbreaking innovation, and individuals are free to accept or reject it. Not all discrimination is bad, and the market is well-equipped to swiftly punish any unfair practices.

Based on James G. Lakely, “Neutralism: The Strange Philosophy Behind the Movement for Net Neutrality,” Heartland Policy Study #124 (Chicago, IL: The Heartland Institute, October 2009). Copies of the 36-page study are available for $19.95 each. Permission is granted to reprint or quote from this Executive Summary, provided appropriate credit is given.

© 2009 The Heartland Institute. Nothing in this Heartland Executive Summary should be construed as reflecting the views of The Heartland Institute, nor as an attempt to aid or hinder the passage of legislation. Questions? Contact The Heartland Institute, 19 South LaSalle Street #903, Chicago, IL 60603; phone 312/377-4000; fax 312/377-5000; email think@heartland.org; Web http://www.heartland.org.