Category Archives: Government Regulation

Obama Using “Net Neutrality” to Obscure Federal Take-Over of Internet

fiber-optic-cable“The government will fuck the Internet up.”

So says Mark Cuban. Truer words were never spoken. Allowing the federal government to treat the Internet as a public utility, as President Obama is calling for, under the guise of “net neutrality,” is an abysmally bad idea.

To be clear, “net neutrality” and public utility regulation are two different but equally bad ideas. It appears Obama is using the former in a cynical bid to trick the electorate into accepting the latter. Neither is needed and both are undesirable.


Net neutrality is the idea that, having paid for Internet service, consumers should have unfettered access to all content. It would prevent a whole host of business model experiments that Internet Service Providers (ISPs) might otherwise try:

  • Selling tiered data plans like cell phone companies do.
  • Developing their own content and then delivering that content at higher speeds than they deliver a competitor’s content.
  • Creating different “lanes” of Internet traffic and charging higher prices to content providers or users for access to the “fast lanes.”
  • Preferring certain content providers to others, likely depending on who pays.
  • Blocking users from using certain online content that takes up too much bandwidth and slows down the network for other customers.

I see none of this as frightening. We pay different rates based on the size and weight of the mail we send. We pay different rates for concert seats, cell phone plans, Netflix memberships, cable subscriptions and a whole host of other services.

The sun still rises.

What consumers who demand heavy content at low cost really want is to have other users overpay for light content while suffering the slow buffering speeds caused by the heavey users. As Casey Given, writing for Rare, observes:

Even if the FCC’s worst fears come to fruition and ISPs start charging cell phone-style “plans” for different levels of Internet access, online access would only become cheaper for low data users. As it is today, a grandmother who logs online once a day pays just as much as the tech-savvy teenager next door who regularly downloads gigabytes of data. As such, she is subsidizing his usage and could instead be paying a cheaper rate if her ISP offered varying plans.

In any case, ISPs own their technology and infrastructure. They invested in that property with the aim of making a profit. The idea that the public has some sort of claim against the property of ISPs reflects a sense of entitlement I cannot endorse. Rights are things we get to do—not things we get to have at others’ expense.

It is where we stand on this principle in the hard cases that defines us.

In addition to heavy content users, the other main beneficiaries of net neutrality are Internet giants like Facebook, Google and Netflix. These companies do not want to be charged by ISPs for the heavy traffic their users generate while slowing down buffering speeds for everyone else.

But is there any reason we should prefer the profit of big content providers over the profit of ISPs? Is there some principle that says Netflix should be allowed to earn whatever profit the market permits—but not the ISPs who deliver its content to consumers?

As Doug Mataconis wrote for TLP back in 2010:

It’s Comcast’s network, [it] should have the right to decide how it’s used and to take action to protect its property and its other customers.


Obama’s plan to regulate the Internet is not the same as net neutrality. His plan is to treat it as a public utility, the “most draconian” level of regulation that could apply. It would require ISPs to provide universal service, i.e., “wire up every house.”

It would also allow them to charge the rates necessary to recoup that expenditure at a profit. In fact, public utility regulations allow the type of tiered pricing net neutrality advocates want to prevent:

What some critics of the Commission’s recent proposal may not realize is that even if the FCC agrees to impose the price, non-discrimination, and other forms of common carrier regulation on ISPs, Title II reclassification, would not necessarily ban paid prioritization. As former enforcement director at the Federal Trade Commission, David Balto, has pointed out, the title only prohibits “unjust and unreasonable” differences in services. Carriers regulated under Title II still “may offer different pricing (including volume and term discounts) … so long as they are ‘generally available to similarly situated customers.’”

In plain English, all this means that if some websites, like Netflix, want “faster lanes” on broadband networks, the providers of those networks can charge extra for that service even under Title II, so long as they stand ready to offer the same service to all similarly situated comers.

So Obama’s proposal presents a solution that does not fit the purported problem—which may not even exist.

In June 2006, there were two or more broadband providers in 92 percent of the nation’s zip codes, and four or more providers in 87 percent. A June 2014 study found at least two providers (wireline and wireless) for virtually all of the U.S., and at least two providers (cable and telephone) in nearly three quarters. Nick Gillespie reports at Time Magazine that 80% of households have at least two providers capable of delivering the Internet at 10Mbps or faster.

This access has been achieved even as prices have gone down:

President Obama’s call this week to regulate the Internet as a public utility is like pushing to replace the engine of a car that runs perfectly well. The U.S. data sector — including wired and wireless broadband — is the envy of the world, administering a powerful boost to consumer welfare, generating high-paying jobs and encouraging tens of billions of dollars in corporate investment. Indeed, the prices of data-related goods and services have dropped by almost 20 percent since 2007.

So what is really going on? Does Obama really think the future of the Internet requires the government to sort out squabbles between Netflix and Comast?

I doubt it.

Maybe it is intended to deliver to big donors. Maybe it is about the 16.1% tax on interstate revenues that would be paid by broadband consumers. Or maybe it is something more sinister. As Christopher Bowen wrote last week:

The problem with the government regulating the internet is that … when they get to determine the rules, the consequences turn sinister.

*     *     *

What about communications of interest to the government, such as anything with heavy encryption? Or Tor?

The government has a direct interest in controlling that kind of traffic—hello, Wikileaks/Edward Snowden/any other whistleblower—and if anyone thinks the federal government will look the other way on these things, they are naive.

This isn’t just a possibility, it’s the reality of current legislation on the books, as Chris Byrne pointed out in 2006. Every single packet, every communication, every image, would be captured and stored—by law—if common carrier became the letter of the law in regards to internet traffic, without a warrant, and it would take just a rubber stamp to get a warrant that would be used to punish anyone the government pleases…


For years, federal agencies themselves have resisted calls for regulation, on the states basis that forcing ISPs to treat content neutrally was not necessary, would impede the development of infrastructure, and would have an adverse effect on consumer welfare.

That is because developing the technology to respond to demands for bandwidth requires heavy investment. In fact, in 2013, telecom and cable companies topped the list of industries investing in the U.S., to the tune of $46 billion in investment.

Regulation cuts into the profits that encourage that level of investment.

This Cato Institute podcast, for example, covers the fact that Google Fiber does not provide Title II (public utility) services precisely to avoid the onerous regulations that come along with such endeavor. Another stark reminder of this basic fact came in the wake of the President’s message. On November 12, 2014, AT&T announced it would delay installing high-speed fiber-optic Internet infrastructure in 100 U.S. cities until the rules were clarified.

Perhaps this is why the American people oppose regulation. A November 2014 survey by Rasumussen Reports found that 61% oppose federal regulation of the Internet. Only 19% want more regulation than we already have. What is more, seventy-six percent like the quality of their Internet access.

Only 5% have complaints.

At best this is a solution in search of a problem. At worst, this is a Jonathan Gruber style misinformation campaign, designed to lull the public into complacency as the federal government assumes control of the Internet.

This time, let’s not fall for it.

Image via

Sarah Baker is a libertarian, attorney and writer. She lives in Montana with her daughter and a house full of pets.

Long Slow Burn – GruberGate as a Microcosm


We, here, at The Liberty Papers do not generally share our correspondence, but the big issues of the day are, in fact, talked about at length in our site’s Google Group as we coordinate what we’ll be talking about at this lovely blog. Without being specific or quoting anyone directly, I would like to put forward what the group reaction was to the so-called ‘GruberGate’ scandal. In a word:


If you’ve been living under a rock or watching nothing but MSNBC (same difference, really), I’ll give you a quick summary of what GruberGate entails. For six years, conservatives have blasted away at the Affordable Care Act (hereafter, the ACA). For six years, we’ve been talking about how the promises made by people trying to get it passed were impossible to keep, how the bill would raise the deficit, make healthcare more expensive and less stable, drive away doctors, narrow your networks of providers – basically the exact opposite of every claim put forward by Democrats between 2008 and 2012. The media uncritically reported White House talking points for most of that time, doing absolutely zero digging and finding no evidence of problems with the law as a result.

Then some guy who’d lost his insurance after being promised that that wouldn’t happen and decided to do some actually investigating. Within a day of beginning his search, he found video footage of one of the ACA’s chief architects, Jonathan Gruber, candidly discussing the ACA with his peers in Academia in which he said THIS (follow the links to see the videos), THIS, and THIS.

Many things have been said about GruberGate, and I won’t rehash them here. The response to this story by many libertarians (not just those of us writing here) has been a collective “well duh!” We have, after all, been talking about everything that Gruber willingly admits in his various talks on the ACA – that it’s a pack of lies intended to fool the American taxpayer by fooling the Congressional Budget Office, that it amounts to a giant national experiment and the architects have no clue what it’ll do, that expanded coverage can’t happen without raising revenue to pay for it, and that the archetype (RomneyCare) was already a failure, being propped up by federal dollars all along. We knew all of that. The insults he lobs at the American voters aren’t entirely unfounded either. Many Americans, like it or not, vote without any idea of what they’re supporting. So why should we get up in arms over it.

After arguing rather cantankerously with my fellow bloggers here, trying to explain why this story enraged me so, it dawned on me what was really going on in my head. I may come to self-awareness later than I should on occasion, but I generally get there if I think on it long enough. This whole story – the story of the Affordable Care Act from conception, to birth, to signing, to repeal efforts to angry Americans who feel lied to and voting R to prove something to the left to the GruberGate controversy…it is a microcosm of everything I’ve been battling for years.

When the ACA was first being discussed, the conservative reaction was a combination of people like those in my family, who were horrified by the likely outcome of such a bill and who relied heavily on health insurance to make their various medical problems affordable to treat, but who reacted by studying the proposal and attempting to logically argue as to why it was a very bad bill indeed…and people screaming at town hall meetings because they just instinctively feared such a big, sweeping change. It’s human to fear change, and in this case their fears were justified, but instead of focusing on doing the work of exposing the lies in the ACA, most of conservatism was consumed with death panels and doomsday imagery of Uncle Sam examining a woman’s lady parts (yes, that was a real conservative ad).

Now I’m not saying I think the IPAB is good for “end of life” care…it’s not. But ‘death panel’ rhetoric sounds literally insane to your typical low-information swing voter who might be swayed by bringing a convincing argument to the debate. And, of all of the conservative reactions to the ACA, which ones do you suppose were primarily covered by the media, by ACA advocates and in the political discussion on Capital Hill – the reasoned arguments as to why the ACA would fail and make things worse, or the fear-mongering?

But guess what – that made someone like me who worked hard to understand the problems with the ACA into a looney tune screaming about death panels when I voiced my opposition to the law before any leftist. They accused me of being a liar. They accused me fearing change. They accused me of not caring about the poor and the uninsured. And they had the support of, once again, an uncritical, unserious mainstream media telling them any concerns about the ACA raising costs, impairing the system, causing doctor shortages or narrow networks, etc. were just crazy conservative fear mongering. Our detached, empirical expert, Jon Gruber, says so – read the study.

When the truth came out – when it turned out that Jon Gruber believed everything I did about the ACA except the part about those results being bad for healthcare…when he gleefully admitted that RomneyCare was a failure economically, that the ACA had nothing to do with making healthcare affordable, and that he and his colleagues had no clue how to bend the cost curve down – and then had the audacity to call us stupid for believing him, I would have been satisfied. I wouldn’t have been angry for long – it would have brought some semblance of peace to be vindicated in the fight. Except that the reaction of the left was to lie even more, minimize Gruber’s roll in crafting the bill, and then…call conservatives fear mongers again for reacting to this story with anger and for losing trust in government to solve problems like these.

This is inherently the entire problem I have with the left – every time their bad ideas don’t work and people realize it, they find the loonies in the conservative ranks and make those guys their opposition, and when you try to bring reason to the party, they accuse you of just being one of the loonies. And when you turn out to be RIGHT…oh well whatever nevermind. That fight never mattered anyway – on to the next fight.

Until conservatives are willing to call liberals (and other conservatives) out for not fighting fairly, for distorting the history of the argument, for scanning through the crowd for the easiest person to attack, for straw men and lies, for parliamentary tricks and poor research, and for their ugly assumptions about the American people, we will always lose the argument. Always. And that…is what is truly terrifying me into anger. We were right. All along, conservatives were right about the ACA and the insincere, cynical motives of its creators. We were right, they were wrong, and somehow, we still lost the argument. And it’ll happen again and again until we get angry enough to turn the tables on them – to call them out on their unfair tactics and their bad science and their twisted, utilitarian assumptions.

We’re about to have the same fight on immigration. Learn to recognize their tactics and fight back, or there will come a day when you remember how right you were about the negative consequences of an open border, and how little it mattered that you were right.

Net Neutrality: A Complex Issue With No Satisfactory Solutions

Yesterday, Chris Byrne had a write-up regarding President Obama’s “stated” support for Net Neutrality. “Stated” is in scare quotes because, as Chris noted, President Obama’s support for this ( much like his “support” for gay marriage) is a limp-wristed attempt to mollify his young, technologically literate base.

Of course, because it’s Obama and there’s a cottage industry dedicated to demonizing him, Ted Cruz had to come out with the stupidest political statement of the year (Non-Dollard/Kincannon Division).

With the mainstream attention these positions will now bring, and with an FCC decision on the issue due in 2015, the issue can no longer be ignored:

Net Neutrality is a major political issue, right now.

Chris Byrne correctly noted, that the lack of competitive options in local internet access is the primary factor leading us into the situation we’re in now. A deeper look into this shows… yeah, it shows we’re screwed either way.At the moment, there are no realistic answers that will satisfy consumers.

The explanation as to why is complex, to say the least.

Keep in mind that as I go through the issues surrounding net neutrality, I will be attempting to take common arguments, and technical background, and break them down into layman’s terms. Although readers of The Liberty Papers tend to skew more educated than most, I understand that not everyone is tech savvy enough to understand much about how the internet works beyond “I go to Google and email shows up!”. » Read more

Christopher Bowen covered the video games industry for eight years before moving onto politics and general interest. He is the Editor in Chief of Gaming Bus, and has worked for Diehard GameFan, Daily Games News, and has freelanced elsewhere. He is a “liberaltarian” – a liberal libertarian. A network engineer by trade, he lives in Derby CT.

So Why Are Car Insurance Rates High In Louisiana? A TLPer Has Some Answers….

article-2451531-18A3E39F00000578-644_634x392I wrote a blog post for the R Street Institute based in Washington D.C. that tried to explain why Louisiana consistently has some of the highest car insurance rates in the country. The reason is simple actually, because of Louisiana’s bad decisions.

As a Louisiana resident, I paraphrase Jimmy McMillan when I say “car insurance in Louisiana is too damn high.” While Louisiana only has the seventh most expensive car insurance in this year’s survey of the states, the state is a frequent contender for the top spot. In the Southeast, only Georgia has higher average car insurance rates. But given that Louisiana is the second poorest state in the country, car insurance costs probably have more of an impact on Louisiana drivers than Georgia drivers.

Car insurance rates in Louisiana are so expensive compared to the rest of the country partly because of policy decisions that have been made by Louisiana lawmakers. Thus, just as Louisiana policy-makers have made numerous terrible decisions that have contributed to these high rates, they also can take the necessary steps to fix the situation and truly lower rates for all Louisianans.

Read the rest of the article here:

I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at The and Rare. You can also find me over at the R Street Institute.

Net Neutrality… Obama… Cruz… How About Oliver?

Today, Barack Obama(D) has announced that he will pretend to support net neutrality:



In response, Ted Cruz (RPDGC*), has announced that Net Neutrality is the work of the devil:



The idea that either Democrats OR Republicans actually support net neutrality is a joke.

The Democrats have (and still do) very strongly supported big media and big communications, who are largely anti neutrality. it’s only when net neutrality obviously became a big issue among young liberals (who were largely unmotivated to turn out this midterm election) that they have pretended to support it.

The Dems could have made it a campaign issue, except then they wouldn’t have had the huge media and communications industry money for the elections, that they needed to avoid getting spanked even worse than they did.

If Obama had actually supported net neutrality, he wouldn’t have appointed an anti neutrality industry stooge as FCC chair… but again, if he did that, the Dems would have lost that sweet sweet big media money.

On the other hand, the Republicans are largely anti “big media” and anti “big communications”, and only became anti-neutrality when the Democrats decided to take it as an issue.

What is Net Neutrality?

Frankly, any libertarian should support net neutrality as a principle (government regulation is another matter).

Net neutrality as a principle, is simple. All legitimate traffic should be treated equally, no matter the source or destination. No internet service provider should filter, censor, or slow down traffic from their competitors, their critics, or because of politics or national origin; or for any reason other than technical requirements for safe, efficient, and reliable network operation.

It’s how the internet has always been run, up until recently, without any government action necessary. There’s a famous quote: “The internet interprets censorship as damage and routes around it”. Any internet service provider that censored, filtered, or slowed down traffic from anyone (for anything other than technical reasons) was routed around, and cut out of the net, by its peers. It was a great example of independent action and peer enforcement working in the marketplace.

Unfortunately, this is no longer the case.

Why is it an issue now?

Large media and communications companies like Comcast and Verizon have been deliberately and artificially blocking or slowing down traffic to and from their critics and competitors.

Of course, getting government involved does generally make things worse. In fact, it already did in this case, since the government has been involved from the beginning, and it was largely government action that created the current problem.

In a rational and unbiased competitive environment, consumers would have a reasonable choice of internet service providers, and any ISP that chose to censor or limit access, would lose customers, and either correct themselves or go out of business.

Unfortunately, we don’t have anything like a free and competitive market in internet access. Government regulation and favoritism has created huge monopolies (or at best duopolies, and no, wireless access is not realistic and reasonable competition given the distorted market and cost structures there either) in internet access.

We’ve reached a point where the telecommunications monopolies that government created and support, are in fact deliberately applying anticompetitive, unfair (and in some cases already unlawful) restraint against their critics and competitors.

Since they are government supported monopolies, the market is not allowed to correct the undesirable private action.

This means that, unfortunately, government action IS required… and even if it were not required, it’s inevitable, because politics is politics, and this is now an “Issue”.

So what do we do about the problem?

Please note, I don’t trust either Democrats OR Republicans on the issue in general, and I don’t trust either, or the FCC to regulate neutrality at all. Cruz does have at least one valid concern, in that the history of government regulation of almost every industry, but particularly technology, is mainly a long record of suppressing innovation and other negative unintended consequences.

The ideal solution is to end the government created internet access monopolies that most Americans live under, and allow free and open market competition to correct the problem.

Without government limitations on competition in actual high speed, high quality internet access; competition will increase, prices will fall, and any provider that filters or slows legitimate traffic will lose all their customers and go out of business.

This isn’t just a prediction or libertarian idealism talking by the way. It’s been proved out in Korea, Japan… even in the UK. Everywhere that internet access competition has been allowed to flourish, everything has improved (conversely, in the U.S. where we have deliberately increased the power and scope of these monopolies, we have the worst internet access of any technologically advanced nation).

Unfortunately, that isn’t going to happen.

The next best thing, is to mandate net neutrality in the least intrusive, least stupid way possible, and to react intelligently (and rapidly) to changes in technology and its uses, to avoid regulatory distortion and suppression of innovation.

Unfortunately, that isn’t likely to happen either…

That said, it’s remotely possible for us get closer to that, quicker, than we can to disassembling the thousands of federal, state, and local regulations, which have created these monopolies, and made the barriers to entry for competition impossibly high.

Of course neither Democrats nor Republicans support or plan to do that.

The whole thing is a spiraling charlie fox of disingenuous cynical idiocy.

Personally, I say forget Obama, forget Cruz, and listen to Oliver (or if you don’t care for Oliver, or can’t watch a video, there The Oatmeal):



*Reactionary Populist Disingenuous Grandstanding Cynic… not the Republican party, just Cruz

Edited to add a few paragraphs clarifying what net neutrality was, and why it’s currently an issue

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

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