Net Neutrality?

Agreed. I wrote about this issue a couple weeks ago.

This is interesting. . .

What do you make of Josephe Bertrand's theory that a duopoly will arrive over time at pricing equilibrium and how does this factor into a market where technological changes ought to be destabilizing such equilibrium? Does the dynamic of the duopoly tend to override the underlying changes in the costs? Or will technical innovation tend to destabilize the equilibrium?

"Net Neutrality" may be the wrong rallying cry, but the concern that a portion of the public trust (roads, telephone poles, airwaves) are being ceded to private control and thus the public should have some say in how they are utilized would seem reasonable on its own merit.

The push by telecom and cable interests to entirely deregulate their industries creates an enormous potential for abuse -- how should we monitor and regulate these enterprises in order to reduce that abuse?

The Internet spawned off massive government spending by DARPA then the NSF from the sixties well into the eighties. Seeing it as evidence of Hayekian self-order is wishful thinking.

As for net neutrality, it is an attempt to mitigate perceived market failure. Other countries do not have debates about network neutrality, simply because no big player there (not even in dirigiste France or Keiretsu-friendly Japan and Korea) has the kind of market power AT&T or Verizon or Comcast enjoy in the US.

Much of the mess is due to the abject failure of the 1996 Telecom Act and the FCC to foster competition, in fact quite the opposite happened, which is not surprising when you consider how much money telcos spend on lobbying and lawyers.

There is also a very fundamental problem with the layer model, related to the inhibiting effect it would have on price discrimination.

This seems to take it for granted that unless the telco can appropriate almost all of the the value created by the transactions it participates in, a Bad Thing has occurred. This is not at all obvious to me.

Unless communications networks become substantially more competitive than they are today, the ability of the telco to practice price discrimination means that it is impossible to make real profits with a business model that depends on the internet: making a profit sends a signal to the telco that you are experiencing value from your transactions with them that because of their superior negotiating position in their dealings with you, they can appropriate for themselves.

It is true that the Internet was founded through government largesse, but the development we know today as the commercial Internet developed in an atmosphere of near zero regulation. Despite the entry of a large number of Tier-1 Internet service providers, the Internet remained pretty much completely connected.

There were lots of "I won't peer with you" moments, but in the end no ISP wanted to deliver less than the complete Internet.

I don't think that any broadband provider would want to provide less than the complete Internet either. There are enough competing modalities (DSL, Cable, terrestrial wireless, broadband over powerl lines, satellite, not to mention dial-up) that there shouldn't have to be any serious "net neutrality" regulation.

On the other hand, I can easilly imagine damaging regulation from the government. Think price gouging.

Internet most probably would have started even without govt initiatiion - it was technology that was lacking.

The key ingredients of internet are Ethernet (physical layer), some sort of network protocol (DecNET or Banyan networks), the graphical interface and mouse.

All of them have been invented in a private company, Palo Alto Research Center of Xerox. The first browser, Mosaic, was also largely privately invented. Multitasking OS like Unix was also largely a private hobby done on corporate machine by Thompson and Ritchie.

The only piece of contemporary internet that was invented in govt facilities was HTML and HTTP protocol, obviously by Tim Berners-Lee in CERN. Read, however, more detailed history of hypertext:

http://www.robotwisdom.com/web/timeline.html

Wide-area networks in form of phone companies were also largely privately built in many countries.

So almost all key pieces of internet have been already done by individuals or companies about the time govt funded the ArpaNET.

Correlation is not causation. Internet would have been created with or without government. Perhaps we would even get network protocol better than TCP/IP, which however workable, has a good share of problems. The next version that was supposed to be a big story, IPv6 is dead meat in practice. How come, given the seminal role of the govt?