Net neutrality is a political cartel of internet renters that want to grab a big piece of the market from the landlord cable networks without having to pay for it, and sublet it to others for their economic and political gain.
Since former President Barack Obama left office, California has had an ongoing legal battle with the Trump administration over the unintelligible telecommunications policy called “net neutrality.” California’s political leaders favor “net neutrality,” and the Trump administration is not. California is unilaterally trying to set policy about net neutrality for the entire country. Conversely, the Trump administration believes California is encroaching on its authority to regulate interstate commerce. But hardly anyone knows what net neutrality means due to the technical nature of the term. Instead of trying to define it, let’s first look at a commonsense example.
Baseball Game Analogy
Your family wants to go to a baseball game. The stadium has different prices for different times of the year, for double headers and for championship games. It also has different prices for adults, adolescents and children in order to encourage the whole family to see a game together. There may be different pricing for different seating areas as well as group pricing. Then there is another layer of pricing by competitive sporting events (e.g., football, soccer).
But imagine what would happen if all sporting events had to charge the same price despite the date and time of the game, seating section, age of patrons or competitive sporting events. Or that even watching TV games had to charge the same price as going to a game ($167). Moreover, imagine that you must allow a rock concert or a political rally to barge into the stadium at the same time as the baseball game and get free rent.
Net Neutrality is Socialism
Net Neutrality is opposition to paying different prices for internet carriage fees, amount of bandwidth, speed of access, browsing speeds, blocking access, throttling access or prioritization of traffic based on prices charged to internet content providers to the old telephone network grid operators. It means you get a flat price for everything, you cannot deny better access to anyone especially by a higher price and shifts the cost of your internet rent or charges onto others.
The opposite of net neutrality is called price discrimination in economics as explained in the baseball example above. The reverse of price discrimination is socialism, meaning cost or price sharing.
Put differently, the intentionally garbled net neutrality conflict is what economists call a “free rider problem”, defined as “the burden on a shared resource that is created by its use or overuse by people who aren’t paying their fair share or aren’t paying anything at all.” The Trump Council on Economic Advisors even put out an educational paper in 2018 focusing on how government attempts to give out free goods results in unanticipated bad consequences.
Net Neutrality is a Cartel of Net Renters
But now that net neutrality has been un-masked as socialism, who would benefit from net neutrality and who would lose? A sample of those who would gain from net neutrality and who would lose is below:
Wins – Net Neutrality
Newer Internet Service Content Providers
Loses – Net Neutrality
Older telephone & fiber network operators
Apple- Cupertino , CA
Google – Mountain View, CA
Facebook – Menlo Park, CA
Yahoo – Sunnyvale, CA
Amazon – Seattle, WA
Ebay – San Jose, CA
Microsoft – Redmon, WA
Twitter – San Francisco, CA
Mozilla -Firefox – Mountain View, CA
Greenpeace – Amsterdam
ACLU – New York, NY
Net neutrality is an economic and political cartel of internet renters that want to grab a big piece of the market from the landlord cable networks without having to pay for it and sublet it to others for their economic gain and political capital.
As can be seen from the above list, those who would gain from a net neutrality policy would be those internet content providers (e.g., email, messaging, movies, social media, political advocacy, etc.) in California, Washington State, as well as political advocates in New York, Los Angeles and the Netherlands. Those who would lose from net neutrality would be telecommunications companies in Texas, Pennsylvania, New Jersey and Connecticut who would be banned from charging higher rates for internet fast lanes for designated websites.
However, it is not that President Trump is on the side of the cable network landlords because he removed regulations propping up the profits of internet-service companies in 2017 by overturning the opt-in rule.
California SB 822 Wants to Set National Policy
On August 10, the U.S. Department of Justice (DOJ) requested that a federal judge block California’s net neutrality law, arguing that the federal law is paramount over the state’s. This case goes back to 2017 when the Federal Communications Commission (FCC) voted to repeal the Obama administration’s attempts at implementing a net neutrality law.
In response, California passed a new net neutrality law in 2018 (SB 822). SB 822 was supported by 22 Democrat state legislators and passed along a straight party line vote. California later aligned with the Democrat-controlled states of Vermont, Oregon, Washington, Colorado, Maine and New Jersey to form a cartel in an attempt to make net neutrality nation-wide policy.
The DOJ appeal will be heard in the Eastern District of the Federal Court in Sacramento presided by Judge Kimberly Mueller, an Obama appointee, and a decision is expected in October.
Don’t expect the case to be framed as a regulatory takings issue where renters of the internet can grab bandwidth and access speed from their landlord cable companies and sublet it out for economic gain and political capital.
Don’t expect the case to be framed as a public policy issue as to whether the nation’s economy is to grow along capitalist values, or suffer economic decline under a socialist internet. Instead expect the case to be argued along narrow legal grounds whether a market-driven internet “discriminates” against free speech, civil rights, or is racist.
Why should such a decision as to whether the national economy should be capitalist or socialist be made in a court of law?
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