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Network Neutrality — Without Regulation

Posted by timothy on Thu Nov 20, 2008 02:32 PM
from the but-that's-unpossible dept.
boyko.at.netqos writes "Timothy B. Lee (no relation to Tim Berners-Lee), a frequent contributor to Ars Technica and Techdirt, has recently written 'The Durable Internet,' a paper published by the libertarian-leaning CATO institute. In it, Lee argues that because a neutral network works better than a non-neutral one, the Internet's open-ended architecture is not likely to vanish, despite the fears of net neutrality proponents, (and despite the wishes of net neutrality opponents.) For that reason, perhaps network neutrality legislation isn't necessary — or even desirable — from an open-networks perspective. In addition to the paper, Network Performance Daily has an interview and podcast with Tim Lee, and Lee addresses counter-arguments with a blog posting for Technology Liberation Front."
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  • human nature (Score:5, Insightful)

    by gEvil (beta) (945888) on Thursday November 20 2008, @02:39PM (#25836205)
    As long as companies are involved with some having more sway than others, you can expect them to abuse their position in the name of greed. It's simple human nature. Say all you want about how companies will police themselves or that the market will sort itself out. However, reality has shown us time and time again that this isn't the case.
    • Re:human nature (Score:5, Insightful)

      by bmajik (96670) <matt@mattevans.org> on Thursday November 20 2008, @03:10PM (#25836647) Homepage Journal

      It's a good thing that the human propensity to seek power and do evil only exists when that human works at a company, and never when that human works in government.

      We're really lucky this is the case, since if someone in government were ever corrupt, they could fine you speciously, jail you without trial or due process, seize your home via eminent domain, or just plain kill.

    • The only thing ISPs care about by default is that their users aren't abusing access to the Internet through means like taking up too much bandwidth or doing illegal things. They don't care whether you spend your day on Slashdot or Stormfront. If left up to their own devices, which they have been so far, they let their users go wherever they want until the law says otherwise. What makes you think that the government is more likely to come in and say that they must do this, rather than come in and tell them
    • Which would you rather have?

      1) A bunch of large corporations dueling it out amongst themselves, with the ones who gain and maintain the largest market share being the most successful.

      2) A bunch of large corporations dueling it out amongst themselves, with the ones who gain and maintain the ears of the most powerful government officials being the most successful.

      Yes, companies will abuse their positions in the name of greed. There is no way around that. When you get government involved, however, you're sim

      • Re:human nature (Score:5, Insightful)

        by Progoth (98669) on Thursday November 20 2008, @03:00PM (#25836497) Homepage

        I challenge you to show me an unregulated market where the government doesn't have its hands in it in some way. Go ahead...I'm waiting.

        And WTF? libertarians support the PATRIOT act or unilateral action against sovereign nations? you know some funny libertarians, and I'm glad I haven't met them.

        • Re:human nature (Score:5, Insightful)

          by Goaway (82658) on Thursday November 20 2008, @03:46PM (#25837229) Homepage

          Ah yes, the good old libertarian cop-out. If a free market fails, find some tiny little bit of government involvement, and blame that. If a free market succeeds, take credit and ignore any government involvement.

          • Re:human nature (Score:5, Interesting)

            by Sloppy (14984) on Thursday November 20 2008, @04:44PM (#25838139) Homepage Journal

            If a free market fails, find some tiny little bit of government involvement, and blame that.

            Tell me about it. How dumb to blame ISP availability on such tiny things, such as .. oh, I don't know .. cable monopoly status granted by franchise agreements with local governments, for periods lasting decades.

        • Re:human nature (Score:5, Insightful)

          by TheLink (130905) on Thursday November 20 2008, @03:48PM (#25837267) Journal
          "I challenge you to show me an unregulated market where the government doesn't have its hands in it in some way"

          I challenge you to show me a large bunch of people where you don't get a form of government within a few years - whether it's a dictatorship or otherwise.

          Similarly given a large market, you will get some form of regulation whether you like it or not.

          What people should worry about is not "lots" vs "little" regulation. What they should worry about is good vs bad regulation. With Laws (like code), quality not quantity matters more.

          If greedy corporations have the most say in the writing of regulation, the Public are unlikely to get good regulation, after all the creation of regulation that benefits the Public is not going to be one of their top priorities.

          If the Public prefer to vote for politicians/legislators who got the most money from greedy corporations, it should be no surprise what is likely to happen...
        • Re: (Score:3, Insightful)

          I challenge you to show me an unregulated market where the government doesn't have its hands in it in some way. Go ahead...I'm waiting.

          I've seen that a lot in this thread.

          What we commonly think of as "unregulated" has been shown to, in reality, still be regulated in some way.

          So, despite the fact that removing some of the regulation made things worse, the idea is that removing all of it would have avoided the problems?

          And the belief that a completely unregulated market will solve, or avoid, all sorts

        • Somalia is doing quite well in the pirate business these days. No government to speak off, pure unfettered capitalism there. I'm sure you're dying to move.
      • Re: (Score:3, Insightful)

        And the worst thing is that many of those so-called libertarians favor the government in the current individual freedom issues we're having (eg: the Patriot Act) and when it comes to 'impose freedom' to other nations.

        What? Way to build up some straw man libertarians that are completely against everything a small-L libertarian stands for. Those people are simply not libertarians.

      • Re: (Score:3, Insightful)

        And the worst thing is that many of those so-called libertarians favor the government in the current individual freedom issues we're having (eg: the Patriot Act) and when it comes to 'impose freedom' to other nations.

        Umm, what?

        From the Internet Encyclopedia of Philosophy [wikipedia.org] and quoted on the Wikipedia Libertarian page [wikipedia.org]:

        Libertarians are committed to the belief that individuals, and not states or groups of any other kind, are both ontologically and normatively primary; that individuals have rights against certain kinds of forcible interference on the part of others; that liberty, understood as non-interference, is the only thing that can be legitimately demanded of others as a matter of legal or political right; that robust property rights and the economic liberty that follows from their consistent recognition are of central importance in respecting individual liberty; that social order is not at odds with but develops out of individual liberty; that the only proper use of coercion is defensive or to rectify an error; that governments are bound by essentially the same moral principles as individuals; and that most existing and historical governments have acted improperly insofar as they have utilized coercion for plunder, aggression, redistribution, and other purposes beyond the protection of individual liberty.

        Methinks you're confusing Libertarians with some other group. Either that or deeply confused.

      • Re:human nature (Score:5, Insightful)

        by ClassMyAss (976281) on Thursday November 20 2008, @03:16PM (#25836753) Homepage

        I couldn't agree more. I'm tired of all economic libertarians saying the market will rule itself despite many examples showing just the oposite.

        The key to arguing for the pure libertarian point of view is that whenever you're presented with an example of the market failing, you figure out some minor way in which it is regulated, and blame that for the failure rather than the lack of stronger protections.

        For instance, if a monopoly becomes abusive, it's not happening because they are unregulated and haven't been restrained from anti-competitive practices, it's because the tax system has made it impossible for smaller companies to effectively compete with the monopoly. Or maybe it's that the minimum wage has increased the cost of the monopolist's labor to the point where they must charge abusive prices in order to stay in business.

        Or if a financial industry falls all over it's ass by making stupid bets left and right, it's not that the industry went wild taking on too many risks, it's that entitlement programs sent them the...uhh...implicit message that they should...lend money to people that will never pay it back..?...yeah, something like that! Maybe. Oh wait, I meant Sarbanes Oxley, err maybe the Fed's meddling...whatever, the specific reason doesn't matter, just say it forcefully enough and people will lap it up!

        It's a neat trick, actually - any time one element of your preferred extremist approach turns out to fail, you simply claim that it's because the whole thing must be implemented at once, and any deviation from that can bring the whole house of cards tumbling down.

        Unfortunately it's also exactly the same philosophical bullshit that Communists have been arguing since their first failed attempts at Utopia. I'm really getting tired of people failing to understand that balance is necessary in all things, including the level of regulation...I even tend to lean libertarian on a lot of these issues, as I don't think much government meddling is usually a good thing, but the tendency to pretend that there are no situations where it's appropriate seems just as deluded as the idea that the government should control everything. We should be pushing to roll back the right regulations, not abolish them wholesale without considering that some of them may actually be helping us.

        • Re:human nature (Score:5, Interesting)

          by rev_sanchez (691443) on Thursday November 20 2008, @04:22PM (#25837793)
          There is a strange element of faith that has developed around the free market. It's not enough for the Chicago school people to study the markets, model them, and make predictions or develop policy around those ever improving models. It seems as if they believe that a free market is universally benevolent to the point where they are willing to disregard any evidence to that there could have outcomes many people might not find desirable. The a major problem with this view of economics is that even in its idealized form it really isn't that profitable and no one wants to run a business while fighting cut throat competition when they possibly avoid it. Markets are made of people.

          The credit problems and the various bubbles are rooted in a few generic problems: 1. People taking part in the markets are often poorly informed and irrational. 2. Over a short period some people can cheat a market for higher profits and often escape the consequences of doing so.

          Markets are based on a notion of value and that is a psychological thing. To ignore the human element in favor of a model based on some vast crowds of these mythical, rational buyers and sellers is a mistake.
            • Re: (Score:3, Insightful)

              Okay! That was trolling, this is arguing.

              First, the free market has well known failure modes: natural monopoly, where the marginal cost of entry into the market increases dramatically after the initial entry. Roads, sewers, electric and phone lines are a great example. Information asymmetry is another, and externalities are the third.

              Second, money is power, and power can be used to oppress. A free market is a similar choice mechanism to a democracy, except that in a free market, it is one dollar, one vote.

          • Re: (Score:3, Insightful)

            Apparently the key to arguing against libertarians is to attack libertarians using a straw-man, rather than trying to defend your own views on why it's a good idea for the federal government to interfere in free markets.

            No, that's not how to argue against libertarians, it is how to criticize their refutations of your arguments against them. The "straw-man" comment is not accurate, as it is a common libertarian claim that any perceived problem with the free market is actually a problem with the regulations

        • Re:human nature (Score:5, Insightful)

          by spun (1352) <[loverevolutionary] [at] [yahoo.com]> on Thursday November 20 2008, @03:35PM (#25837067) Journal

          Government regulation of markets is essential. Even Adam Smith knew that markets need regulation to stay free. Without regulations, markets quickly devolve into oligopolies.

          • Oligopolies? (Score:5, Insightful)

            by Moryath (553296) on Thursday November 20 2008, @03:45PM (#25837207)

            You could call the US market an "Oligopoly."

            But that's understating the case.

            In >80% of the US market currently, the customer is functionally given three choices: Dialup, Monopoly ISP (Cox, Comcrap, AT&T, etc), or NOTHING. They don't have a "choice" at all.

            For example: no DSL is built to my home. Verizon can't/won't build out FiOS because, they claim, they don't "own the physical phone lines" so while I could switch to them as my phone provider, they have no ownership/authorization to push FiOS. Functionally, I am limited to Dialup, Comcrap, or NOTHING and even the dialup companies are dying fast.

            The 'net cannot stay neutral WITHOUT legislation when you have big companies like Cox and Comcrap that have monopoly status over far too many of their customers. Hell, that's how we got this fucking-stupid "250 GB" traffic cap setup as well.

            In an actual competitive market, the customer can go to the best provider. In a monopoly market, the customer is inevitably given the "choice" of either crap service or no service. Unfortunately, government regulation to protect consumer rights (which was signed away by both Clinton and Bush, little by little) is necessary because otherwise the market devolves into monopoly control everywhere, and the only "competition" happens on the fringe edges where you might have two big mostly-monopolies trying to horn in on each other's monopoly turf.

            • Re: (Score:3, Insightful)

              The competitive ISP market you desire will arise on its own in the next five years because of smarter, more effective broadband technologies. At the heart of this is spectrum, which erases the rules of the game as they existed up until now and replaces them with conditions far more conducive to entry (and exit).

              Laying a wire to each home is really, really expensive on a per-household basis. Verizon has spent upwards of $1,000 per home to add FiOS. Building completely from scratch is even more costly.

              But wi

              • Really, you think "wireless broadband" will be the savior? It's got more problems than wired (latency issues, distortion/signal strength issues, materials penetration issues, interference issues).

                And if that weren't enough, if anything "Wireless Broadband" is already MORE restricted than wired (DSL/Cable/FiOS) offerings. For example, both Verizon and AT&T cap you at FIVE GB. Your own example (Wi-Max) sneakily enters into underlying "service provider" agreements [computerworld.com] to pull the same stunts.

                Again: a FIVE GB [dslreports.com] c

      • Re: (Score:3, Interesting)

        Let me know when the average Comcast customer has a vote on the board, because until he can elect a new CEO, your comparison falls flat.

  • by ValuJet (587148) on Thursday November 20 2008, @02:40PM (#25836227)

    Since this is from the CATO institute, I will just go ahead and assume all their conclusions are bullshit.

  • In Other News... (Score:5, Informative)

    by dcollins (135727) on Thursday November 20 2008, @02:41PM (#25836235) Homepage

    Another paper by the libertarian-leaning CATO institute also said this: Banks, financial lenders, and mortgage providers "work better" if they are responsible and provide only secure financial investments, and are therefore not likely to enter a worldwide financial meltdown. For that reason, financial oversight legislation is neither necessary nor desirable. QED.

    • by readin (838620) on Thursday November 20 2008, @03:06PM (#25836583)
      Another paper by the libertarian-leaning CATO institute also said this: Banks, financial lenders, and mortgage providers "work better" if they are responsible and provide only secure financial investments, and are therefore not likely to enter a worldwide financial meltdown. For that reason, financial oversight legislation is neither necessary nor desirable. QED.

      Our recent meltdown is due to regulations that encouraged bad loans. Our future meltdowns will be due to the assumptions by banks that they don't need to be responsible because the government will step in with billions of dollars to bail them out if anything goes wrong.

      It's silly to blame the current mess on lack of regulation when the banks, financial lenders, and mortgage provides were regulated.
      • the meltdown is due to human psychology. i did not know you needed regulations to create panic and fear. i suppose if we had no regulations, the very concepts of panic and fear would disappear?

        fact: an unregulated market is subject to times of irrational exuberance, and times of panic and fear. there is absolutely no prerequisite to these truths, and no escaping them. the only way to save ourselves form the excesses of irrational excitement or hysteria is regulation

        if you don't believe or understand that, y

          • go study the banking panics of the 1800s

            panic sets in, feeds off itself, and destroys the entire marketplace

            your comment is in direct contradiction to established historical fact

            what is wrong with you free market fundamentalists?

            a little regulation HELPS. it can do nothing but help. let go of your bizarre irrational fear and your cult-like approach towards free markets. you're not logical or reasonable in your approach, you're like arguing with a creationist: you've taken a single act of faith: that a compl

      • Re: (Score:3, Interesting)

        Our recent meltdown was due to credit default swaps that were all dependent upon AIG in a system analogous to a star-topology network. You've been listening to too much Rush Limbaugh.
      • by ClassMyAss (976281) on Thursday November 20 2008, @02:53PM (#25836393) Homepage

        The assumption is that they will be responsible and only provide secure financial investment. ie low risk loans

        The problem is that most bank didn't and they provided too many bad loans.

        ...hence the initial assumption that we should trust the banks to look after themselves failed, and the idea that they are better off with zero regulation is ridiculous.

        • Re: (Score:3, Interesting)

          Banks were not under zero regulation, they were being highly regulated by the government and if you honestly believe that the free market caused this collapse, then you are sorely mistaken. Just because the federal government's solution to this debacle is more regulation and bailouts doesn't mean there were zero before.

          • Re:In Other News... (Score:4, Interesting)

            by Obfuscant (592200) on Thursday November 20 2008, @03:15PM (#25836735)
            Or, more likely..... These very same banks were required, by regulation, to provide bad loans.

            It was called the Community Reinvestment Act, enacted under Carter. It was intended to stop the practice of redlining. You know, redlining, where banks would refuse to make loans into certain neighborhoods that had a high percentage of bad loans and ineligible borrowers.

            The CRA forced them to make bad loans so they could stay in business. Clinton increased the regulations so they had to make more. And Bush the Recent tried several times to re-regulate the system to reduce the requirement to make bad loans, every time opposed by Franks and Obama et.al. "We don't need regulation, there is no problem", sang the Dems.

          • Re:In Other News... (Score:5, Informative)

            by UdoKeir (239957) on Thursday November 20 2008, @03:42PM (#25837161)
            These very same banks were required, by regulation, to provide bad loans.

            Except that they weren't. Stop repeating these republican blogosphere lies.
              • Re:In Other News... (Score:5, Informative)

                by Rycross (836649) on Thursday November 20 2008, @04:37PM (#25838033)
                No it didn't. It said that the location or race of that the person could no longer be considered. That is, banks could no longer red-line (look it up). They could still deny people based on their credit and income. See the wikipedia article on the CRA. [wikipedia.org] The criticisms [wikipedia.org] mostly suggest that the CRA had nothing to do with the crisis. At best, they could point out innuendo (the CRA made banks *feel* like they had to do sub-prime lending) rather than a direct causal link.
              • by Anonymous Coward on Thursday November 20 2008, @05:05PM (#25838437)

                Yes, it definitely was the CRA, passed back in 1977. It was a secret time bomb. It magically didn't cause problems for 25 years, but then *BOOM*, it wrecked the economy by forcing banks to give loans to poor people.. Er, even though most of the fishy loans went to middle class people.. in the last five years.

                Okay. You sure convinced me. Blame Carter!!!

          • Re: (Score:3, Insightful)

            The banks were not forced to provide such loans. The Community Reinvestment Act can only be blamed for a very tiny percentage of the subprime loan market. What really sparked the boom was the realization on the part of banks and other mortgage originators that very few buyers of mortgage securities actually scrutinized the mortgages that are in the tranches. As long as the default rate stayed underneath the modeled default rate, no one cared that the fundamentals were unsound.

            As for Fannie Mae and Freddi

      • by ClassMyAss (976281) on Thursday November 20 2008, @03:39PM (#25837117) Homepage

        If banks were allowed to act in their own best interest, they would have. Sadly, the Democrats (and Barney Frank in particular) refused to allow the banks to act in their own self interest.

        Please elaborate - what exactly were the banks coerced into doing that they didn't think was in their self interest? Because everyone that I know in the industry was thrilled to be offering easy loans to anyone and trading CDOs left and right, mainly because they saw massive returns on their investments while the housing market was booming, not because some Democrat held a gun to their head and told them they had to.

        I know a lot of people that were in the middle of this, and many that are now unemployed as a result, and I have yet to hear any of them seriously claim that this was caused by anything but a bunch of risky and difficult to price assets spiraling off each other and running things into the ground...

  • In it, Lee argues that because a neutral network works better than a non-neutral one, the Internet's open-ended architecture is not likely to vanish, despite the fears of net neutrality proponents,

    $traceroute slashdot.org
    traceroute to slashdot.org (216.34.181.45), 30 hops max, 40 byte packets
      1 10.100.56.1 (10.100.56.1) 17.348 ms 17.801 ms 18.228 ms
      2 10.220.17.1 (10.220.17.1) 3.171 ms 3.270 ms 5.564 ms
      3 * * *
      4 * * *
      5 * * *

    .....

    28 * * *
    29 * * *
    30 * * *

  • The gist (Score:3, Insightful)

    by ClassMyAss (976281) on Thursday November 20 2008, @02:50PM (#25836351) Homepage
    For anyone that doesn't have the effort to slog through 36 pages of Internet history that more or less tells us what we already know (that up until now, the internet has been pretty open), the gist of the conclusion is "We shouldn't bother with network neutrality regulation or worry about those in charge abusing their local near-monopoly status, because hey, the market will work it out!"

    There's also a nice helping of "The government is the worst monopoly of all, and we should never allow them to pass laws to restrain the actions of near-monopolies, because hey, the market will work it out!"

    In other words, we should trust that despite the massive amount of money and energy the companies controlling our "tubes" are putting into fighting network neutrality legislation, they won't ever abuse the privilege to screw us if we just leave things the way they are. But if they are not allowed to screw us, that's when we have to worry about monopolistic behavior!

    Color me unimpressed by the overwhelming force of logic there...
    • Re: (Score:3, Interesting)

      I agree with a good bit of libertarian philosophy - like the portions about the government shouldn't be able to tell you what you can and can't put in your body or what you can and can't do in the privacy of your home. I don't agree with a near-complete defanging of the government.

      The government is supposed to be (in my eyes) an organization to protect us from things that can screw the individual over (other large organizations, like corporations) as well as provide for the common defense and needs of the p

        • Re: (Score:3, Interesting)

          If you truly believe that, then you should be a libertarian. Governments have far more power than anyone else. A company only power consists in choosing not to do business with you; governments, on the other hand, are comfortable with the use of force, possessing a facade of legitimacy no private aggressor can match.

          As for the telcos -- this was never a free market to begin with. The government used its taxes and legislation to create the monopoly in the first place, and to this day the major communications

  • I'm doubtful. (Score:3, Interesting)

    by fuzzyfuzzyfungus (1223518) on Thursday November 20 2008, @02:53PM (#25836389) Journal
    The idea that neutral networks work better seems plausible enough; but that doesn't imply that neutral networks are what the market will achieve. If I can improve my position by building a walled garden and sucking everybody inside dry, that will impose considerable externalities, and probably represent a net loss in efficiency; but I'll do it anyway because I get the gains, and other people suffer the losses. Unless this paper has an atypically good reason for why externalities will be internalized in this market, I am wholly uncomforted by the fact that neutral networks are more efficient.
  • by Digital_Quartz (75366) on Thursday November 20 2008, @02:54PM (#25836399) Homepage
    Here in Ontario, I can get high-speed internet from:
    • Rogers (cable), which blocks ports, throttles BitTorrent, VPN, and any encrypted traffic. Rogers also has some stupid "web search on typo" system which breaks DNS.
    • Bell (DSL), which throttles BitTorrent [slashdot.org].
    • Many small third party DSL providers, which don't throttle, but Bell controls the last mile for all DSL, and throttles for them.

    So, it's a nice theory, but Ontario (and most of eastern Canada) disproves it nicely.

  • by girlintraining (1395911) on Thursday November 20 2008, @02:54PM (#25836403)

    "The life of the law has not been logic; it has been experience. The law embodies the story of a nation's development...it cannot be dealt with as if it contained the axioms and corollaries of a book of mathematics." - Oliver Wendell Holmes, Jr.

    It is for this reason that the internet will continually be subject to attack. It is a public resource and history has taught us that public resources must be managed, regulated, rationed, and controlled. People here on slashdot and in the technical community believe that the internet is different, that it should not be subjected to the same restrictions that are placed on other public utilities like the roads, electricity, or other infrastructure. But our community is ignoring hundreds, arguably thousands, of years of human history which has inevitably converged towards the same result -- Public resources must be managed resources.

    This is an unpleasant truth, and an unpopular one. We're terrified, in many cases rightly so, of the government coming in. But witness what the lack of government regulation has done. When the internet was first opened to the public, there was no commercial interest, but as commercial interests moved in there was no central governing authority. And so a myriad of organizational nightmares have evolved in every aspect. The DNS system has factured, with lawsuits and international pressure abounding. Peering agreements between large ISPs have become power battles that have sometimes resulted in significant fractions of the network being inaccessible to the whole, or degrading performance. We have governments erecting giant firewalls, and the thousand cultures of the world now battle for control over what goes in to their part of the network. Everybody has their own ideas, and it is now little more than anarchy. And none of these battles is concerned about performance, democracy, or the other ideals that net neutrality activists advocate.

    We were so scared of the government that we let corporations come in and seize control of the infrastructure. Now the future of the internet is a question of economics, not idealism, and corporations are battling and lobbying to become the largest and most powerful. Consolidation is happening in the ISP market in every country in the world. And as that consolidation continues to occur, and fewer players are in the market, it will bias ever more heavily towards control and regulation... But it will be a control based on economics favorable to the corporate interests, not the users, not the private citizens.

    It's time to admit that we need government involvement. It's time to sit down at the negotiating table and decide what the fairest way to ration and regulate this resource is. That's the only consideration of the law, and it's best we do it soon before these corporations become so entrenched that only the most desperate of solutions will bring relief. And once we decide what we, as a country, want to do with this resource, then we need to set about making treaties with other countries to bring some level of regulation to a global level.

    This is going to happen. It has to happen. The only consideration now is how to guide this process toward a fair outcome.

  • by Kaenneth (82978) on Thursday November 20 2008, @02:56PM (#25836421) Homepage Journal

    Surveying the wreckage of the credit crisis, Alan Greenspan says he made one very big mistake.

    The free-market cheerleader and former maestro of the U.S. Federal Reserve Board conceded yesterday that he wrongly thought banks had an inherent interest in shielding their institutions and their shareholders from risk.

    That assumption turned out to have been dead wrong as financial institutions brought the banking system to the brink of failure in recent months after loading up on exotic mortgages and risky derivative products such as credit default swaps.

    "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," Mr. Greenspan bluntly told a U.S. congressional committee exploring the role of regulators in the financial crisis.

    "Something which looked to be a very solid edifice and, indeed, a critical pillar to market competition and free markets did break down.

    "And I think that ... shocked me. I still do not fully understand why it happened."

    The staunch belief that banks could manage their own tolerance for risk underpinned Mr. Greenspan's aversion to heavy-handed banking regulation during his record 18-year tenure at the helm of the Fed.

    Mr. Greenspan was an early devotee of author Ayn Rand, whose 1957 novel Atlas Shrugged inspired a generation of libertarian thinkers who believe in the right of individuals to live entirely for their own interest.

    • Re: (Score:3, Insightful)

      "Mr. Greenspan was an early devotee of author Ayn Rand, whose 1957 novel Atlas Shrugged inspired a generation of libertarian thinkers who believe in the right of individuals to live entirely for their own interest." But not at the expense of others.
    • by megamerican (1073936) on Thursday November 20 2008, @03:35PM (#25837057)

      Greenspan was one of the people responsible for changing regulations that led to this crisis. Once he became FED chairman in the 1980's he started circumventing the Glass-Steagall Act of 1933.

      http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html [pbs.org]

      In 1933, Senator Carter Glass (D-Va.) and Congressman Henry Steagall (D-Ala.) introduce the historic legislation that bears their name, seeking to limit the conflicts of interest created when commercial banks are permitted to underwrite stocks or bonds. In the early part of the century, individual investors were seriously hurt by banks whose overriding interest was promoting stocks of interest and benefit to the banks, rather than to individual investors. The new law bans commercial banks from underwriting securities, forcing banks to choose between being a simple lender or an underwriter (brokerage).

      In August 1987, Alan Greenspan -- formerly a director of J.P. Morgan and a proponent of banking deregulation -- becomes chairman of the Federal Reserve Board. One reason Greenspan favors greater deregulation is to help U.S. banks compete with big foreign institutions.

      In December 1996, with the support of Chairman Alan Greenspan, the Federal Reserve Board issues a precedent-shattering decision permitting bank holding companies to own investment bank affiliates with up to 25 percent of their business in securities underwriting (up from 10 percent).

      Late 1999:

      After 12 attempts in 25 years, Congress finally repeals Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts. Supporters hail the change as the long-overdue demise of a Depression-era relic.

      Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"

      Greenspan was the major player in repealling the legislation which would have kept this mess from ever happening. It is very doubtful that Greenspan didn't know why Glass Steagall was enacted in the first place.

      Of course he is going to plead ignorance. He doesn't want to get put behind bars and flogged by the masses by admitting he is a criminal.

  • I call BS... (Score:3, Insightful)

    by nweaver (113078) on Thursday November 20 2008, @03:04PM (#25836545) Homepage

    There are enough cases, eg, NebuAdd, NX-domain wildcarding, P2P traffic disruption, where the ISP gains a large net benefit from behaving in a non-neutral manner, and as high-bandwidth ISPs are a duopoly at best for most individuals, unless you can reveal their practices AND the threat of regulation & marketplace rebellion, the net becomes unneutral.

    Remember, the "market will take care of itself" was also promulgated by CATO in respect to Wall Street, and we know how well that worked out.

  • by Eravnrekaree (467752) on Thursday November 20 2008, @03:15PM (#25836727)

    The article is just full of utter nonsense that should be clear to anyone knowing anything about the internet. The ONLY way to gaurantee that ISPs will not censor the net is to gaurantee that they dont, in the only truly enforceable way, with law. It is all too easy for the ISPs to implement hardware and software that will restrict access to or impede access to certain content. The consumers, given the near monopoly position of the ISPs, would have little other choice than to put up with this. It could also be that only exorbitantly priced service tiers would offer unrestricted access to the internet, meaning access to the full internet would only be available to a small, wealthier segment of the population. Furthermore, even though an uncensored common carrier, whether it is postal or electronic, is essential to free speech, I am unsure if enough consumers would realise the great importance of this to take demand a change of their ISPs behaviour. ISPs of course can just reject that request and leave consumers without recourse.

    Net neutrality can only be assured, adn free speech therefore, with it being required by law and ISPs being recognised for what they, as common carriers and that they should be required to carry all information over their networks unmodified. To allow otherwise is to open the door to censorship, and to make these corporations the functional equivalent of the Chinese government, blocking whichever sites which suit them. This would have an effect exactly equivalent to government censorship that it should be considered the same as government censorship.

    Net nuetrality is also unnecessary for the ISP. They claim it is needed to raise revenue to maintain the network. This is utterly incorrect as they can use bandwidth tiers to do this. Speed and performance levels should apply without discrimination to all content flowing over the network.

    Net neutrality is to protect consumers rights and free speech rights, by assuring every person can access all information made avialable on the internet and publish their own content which can be accessed to anyone else, without it being blocked.

    We can expect conservative organisations to be prejudiced against the interests of free speech and the people and to be high biased towards large corporate interest whom they represent and who finances them. They are highly ideologically biased to an approach which endangers individuals freedoms in favour of large corporations, by dismantling the voice of the people, our democracy, and removing all restrictions from corporations which turns them into an unelected plutocracy which takes the functional role of a totalitarian government. I oppose totalitarianism in the form of corporation or government, often either which are different in name only, and therefore I oppose censorship of the internet by corporations or government, and I support Net Neutrality laws passed by our democratic government to assure that ISPs are not permitted to block access to content.

    • Re: (Score:3, Interesting)

      But the Internet is a two-way street, with clients and servers. If the client-side ISPs decide to start throttling, then the server-side providers can decide to start throttling those ISPs as well.

      Do you really think that people will stick with an ISP that has slowed-down access to Google? I think Google is in a good position to threaten ISPs into maintaining net neutrality. Imagine going to Google and seeing a note telling you that your ISP has caused your access to Google to be throttled, and suggesting t

    • by david_thornley (598059) on Thursday November 20 2008, @05:18PM (#25838597)

      Choosing a car analogy was the right thing to do, but it's the wrong analogy.

      The roads are neutral in a very important way: any appropriately licensed driver is permitted to drive any appropriately registered vehicle on any public road suitable for the physical form of the vehicle. There are no public roads on which you may drive a U-Haul truck but not a Ryder truck.

      Similarly, I want the internet to be neutral, in the sense that it doesn't matter where a packet comes from or where it's eventually going. ISPs are welcome to charge more for different levels of service. I'm not going to complain about reasonable levels of packet shaping, such as cutting down on P2P to allow VOIP through at low latency. The problem is if I have to pay more to get Google packets rather than Yahoo's.

      If there were enough competition going on, we could let the market sort itself out. However, most people have limited choices in broadband providers (I'm very lucky; I've got three choices), and it's not like I can start my own last-mile internet service, getting easements and rights-of-way to run my own lines. For most people, if one or two providers do something they don't like, the only other choices are dial-up or satellite.