Comments by Charles Sulka

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In this Corbett Report video, Jeremy Tucker offers the contrarian view on the FCC’s recent decision to abolish ‘New Neutrality’ on the internet. The issue is contentious, to say the least. 99% of Americans are happy with the internet as it is conceived and implemented, even if they do hate their internet service provider (ISP) as many do. You know the old adage, “If it ain’t broke, don’t fix it.” Now it seems we could add … unless you are a neocon and can see a way to gouge the public by breaking things.

In a twist of irony, the FCC’s decision to abolish net neutrality and ‘deregulate’ the internet was apparently influenced by millions of faked emails and letters of support generated by Russian botnets. Damn. Seems like every aspect of America’s government is now under the control of those pesky Russians … from the manipulation of the 2016 election (it is widely believed that the Electoral College was bought off giving the presidency to Donald Trump) to the sale of much of America’s uranium stockpiles to — you guessed it — the Russians. And now it looks like the Trump administration’s determination to dismantle the federal government piece by piece (to paraphrase Steve Bannon) is not the scheming of demented right-wingers, as CNN insists (Fake news! Sad, that…) but is actually attributable to Russian hackers.

Tucker makes an impassioned argument in favor of abolishing net neutrality, based solely on the concept of deregulation, equating the concept with ‘freedom.’ (Lame, that.) Not only has the concept of deregulation come into question, it is hard to see where government regulation of the internet is really an issue at all. Without net neutrality, the big players in the industry — firms like Google, Facebook, Netflix, YouTube, and Amazon — will be able to reduce competition and maintain dominant positions by making it more expensive for smaller firms to enter the market.

As things stand now, the principle of net neutrality ensures that big business interests are prevented from allowing their monopoly power to stifle new web-based enterprise. If anything, net neutrality is pro-free enterprise anti-monopoly legislation.

Not only will new entrants have higher costs if net neutrality is abolished, but the cable companies and internet service providers will be able to restrict content by outright censorship in addition to manipulating the price structure. Youtube and Facebook are already arbitrarily blocking content from those espousing political views which are not ‘politically correct’; this will only get worse once net neutrality is abolished.

Looking at the issue from another angle…. I, for one, generally agree in principle with the concept of ‘pay as you go.’ Like all resources, the internet has limits. Those who waste (my opinion of course) vast internet bandwidth playing internet games, for example, use a thousand times the resources (internet bandwidth) that I use. Why should I subsidize other peoples’ extravagant usage, the costs of which are bundled into my own internet charges?

But is excessive usage really the problem? Isn’t the infrastructure what really costs so much? In the mountainous and rural areas, it’s certainly the case. It is expensive to run wires or cable to isolated homes in rural areas, and especially the mountains. Infrastructure costs must be borne by someone … and it should be the subscribers who live in isolated areas, right? This is not the prevailing view, of course. It is not the American way; net neutrality helps make internet service available to all Americans.

While it is true that the major internet backbone providers are reluctant to invest in upgrading the infrastructure, it has nothing to do with net neutrality. It is simply greed that discourages investment. The real reason for the lack of willingness to upgrade the internet backbone is simple: the cable companies and telcos are making such massive profits from the exorbitant subscriber fees charged today that there really isn’t any financial incentive to improve the network. The customers are being gouged for as much as they can pay as it is. It is doubtful that subscribers would be willing or able to pay higher fees.

Tucker argues that net neutrality stifles innovation and competition. But Tucker’s reasoning is not at all clear. How did he come up with this determination? Tucker’s view sounds a lot like neocon propaganda.

The real question we need to ask in relation to Tucker’s charges is, will abandoning what little regulation exists in the field actually encourage competition? Corbett and Tucker — libertarians in the extreme in many areas — offer few concrete examples in support of this claim. Corbett refers to what I think of as ‘pseudo-competition’ in internet service where he lives in Japan. He claims he can pick from a number of internet service providers offering discount rates. Is this true? The fact remains that the basic infrastructure — the fiber optic cables and switches — are a monopoly. The internet service providers who Corbett claims are all competing for his business are nothing more than remarketers of the same fiber optic internet service, which they purchase in bulk and resell to subscribers. I think that Corbett’s using his experience in Japan as an example of ‘competition’ in internet service is disingenuous.

Indeed, I suspect most Japanese have fewer options than most Americans when it comes to internet service. Americans have a number of options, they’re just all bad: slow connections at high prices, and abysmal customer service (i.e., Comcast and it’s evil twin, Verizon.) Satellite dish antennas and RF internet service — common in America — are not suitable to the apartment buildings which house a large share of Japan’s population, nor can such services compete with dedicated fiber optic links. The reason Japan has affordable high-speed internet service available to nearly everyone is because it is a relatively simple matter to provide fiber optic cables to every home and apartment. Not so in America, with its vast stretches of rural and mountainous areas.

Moreover, the Japanese government provided major support for that country’s internet backbone, as has nearly every government — other than the American government, that is.

Tucker makes reference to emerging new technologies (mesh networking, for example) without explaining why these new technologies cannot be developed under the existing internet regulatory structure. (Or even if they will actually work.) Like cable television, internet service is, to a large degree, reliant on ‘natural monopolies’ — monopolistic utilities that are unavoidable, as there can only be one television cable on the poles in a service area. Even so, there are alternatives in America for internet service — satellite, radio, telco options.

Two things that we must keep in mind:

(1) the Trump administration is as elitist, corporatist, and Republican as it can be; while paying lip service to economic concepts that would benefit the people, the reality is that not a single measure advanced by the Trump White House is in keeping with the principles espoused in the man’s campaign promises. All politicians lie (it’s in their job description, apparently.) But Donald Trump has elevated the art of prevarication to new heights (or rather new lows, even for American politicians.) Trump is a con artist who claims to be a populist reformer; in reality he is a Republican wolf in sheep’s clothing, a charlatan who promised to ‘drain the swamp’ but instead has filled the swamp with the most voracious predators and stripped away the laws and regulations that keep such predators in check.

(2) The big names in internet service claim that they favor net neutrality. I think it safe to assume that anything the big corporations want is good for Wall Street and the corporatists, and bad for the American people. Unfortunately, it is impossible to tell whether they are lying, and difficult to know whether it even matters.

In other words, the issue is complex. But while Corbett and Tucker make what appears to be a reasoned argument in favor of the FCC’s proposed changes, they do not convince. We must always recognize the benefits of competition in the market. Yet Corbett and Tucker do not make a persuasive argument that abolishing net neutrality will in any way foster competition and encourage new business.

Nobody is a more strident opponent of economic monopolism than me. Nobody is a more outspoken advocate of competition in the market than me. My position is that regulated monopolies are a necessary evil, and competition is to be encouraged whenever possible. We do not want government providing goods and services … yet we need to be especially wary of ‘public-private partnerships’ which always turn out to be a give-away to the investor class and a ‘tax increase’ on the poor, resulting in lower quality of life for everyone but the ruling elites.

We can take an example from history. American industrialists (such as the railroad barons) who reaped a bonanza in government give-aways got their working capital from financiers who made their money through usury (lending money at interest, a crime and — for those with a religious inclination — a sin.) Had the government adopted sound economic principles of a sovereign state fiscal policy (MMT) it could have financed the railroads directly, and saved the nation from being ravaged by the robber barons (Harriman, Rockefeller, Mellon, et. al.)

Note that America’s rural electrification programs which brought electrical power and telephone service to virtually every household in the nation, as well as so many other WPA programs, did not depend upon financing from the parasitic financial sector. The same goes for the internet. We could ‘build out’ high-speed internet service in similar fashion. America does not need to sell out to build out, in other words. Stripping away net neutrality is, in short, a sell-out to the billionaires and the corporatists who work for them.

America’s internet speeds are low in comparison to the rest of the nations of the world. Tucker makes the questionable claim that the industry will, left to its own devices, bring America up to speed in internet service, if only net neutrality is abolished and the internet providers are allowed to compete (by further jacking up prices and consolidating their control over the market? Right.)

The industry has already proved it will never upgrade the infrastructure on its own. Government involvement is required. Ignoring a commitment to upgrade the internet infrastructure is one more way in which the American government has let down the American people. All it would take to upgrade America’s internet infrastructure would be a stroke of the pen … from a government that was working for the American people, and not for special interests.

France’s MINTEL is an example of how the world’s first, best internet service — a resounding success — was a government program.

The private sector is not about to invest in infrastructure. These days, speculation is the name of the game. Fortunes are made betting on derivatives; trading in imaginary ‘crypto-currencies’ such as Bitcoin can realize truly phenomenal profits overnight. Why would the moneyed class invest in stolid investments such as upgrading the internet infrastructure, where the return on investment would be small and slow in coming? From a business standpoint, it makes far more sense to invest in lobbyists to influence brain-dead Congress or Republican ideologues to simply deregulate the internet so that consumers can be forced to pay higher prices for the same mediocre internet performance.

This is economic monopolism at work. Why make a better product when you can — through regulation or deregulation, depending upon the circumstances — charge more for the lousy products you already offer?

It’s the American way.

Sad, that. Hashtag #F___ everyone else I got mine.

(File Updated 12-06-2017 12:09 -0500)