Network Neutrality — Without Regulation 351
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."
human nature (Score:5, Insightful)
human nature (Score:2, Informative)
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.
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Comcast is a great example of how regulation has failed. The government builds up and supports local cable monopolies eliminating competition. And look what happens: Comcast.
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I don't believe that's necessarily true. You can have a proscriptive instead of a prescriptive law. e.g. "All internet carriers are prohibited from routing traffic bound to a given destination preferentially to any other destination" or something of the sort.
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When entering the market involves burying cables on public and private land, then you can hardly make an argument that its "easy to enter." Comcast and its ilk aren't being abusive because of government regulations, but because its so friggen hard to break into the market that competition is a moot point. You may have a point if municipal governments owned the lines and leased them, but then that would *gasp* socialism.
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The people should watch the watchers. (Score:2)
That's easy! The people should keep watch on the regulators. If some regulation is wrongly or poorly implemented, then the voters should express their dissatisfaction at the ballot box. (At least in a perfect world.) Yes, sometimes it takes a long time before the voters say "Enough!!!", but eventually they do.
Re:human nature (Score:5, Insightful)
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.
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Reality has not shown this because government always intercedes and imposes regulation. Can you actually point out an example or are you just relaying made up facts?
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A thought experiment (Score:3, Insightful)
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)
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)
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)
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)
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...
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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
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I challenge you to show me an unregulated market where the government doesn't have its hands in it in some way.
It doesn't exist. What libertarians don't grasp is that it CANNOT exist. Libertarianism is utopianism similar to anarchism (in practice, it's nearly identical) and equally foolish.
I used to be a libertarian. I grew out of it.
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Let's have a libertarian utopia in some alternate universe, and put all the libertarians there. You and I will stay in this one so we can continue to eat in restaurants that have to meet health codes.
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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.
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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)
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.
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I need to bookmark your post because you summed up exactly how I feel whenever I talk to a libertarian.
Re:human nature (Score:5, Interesting)
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.
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I'd add to that list 3) banks taking on upwards of a 30:1 debt to equity ratios. If we all buy 30 times as much stuff as we can pay for, we should not be shocked when a little while later we look at the shit we just bought and re
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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.
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.
Or if a financial industry f
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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
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If they can't refute your arguments, they will try to stop you from arguing. Most anti-socialist arguments on Slashdot get modded down. Socialists aren't smart enough or educated enough to argue their case, so they mod you down in the hopes that no one sees how badly their philosophy fails. Most socialists are only capable of parroting back other people's arguments, so when you present them with an argument they haven't seen before, they don't know what to do. I think socialist indoctrination must cause bra
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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.
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Libertarians hate govt regulation, so therefore, so do Anarchist
You want the govt to dicate what corporations?
You do realize that a corporation can be a single person, or family in my case. You want nobody to be able to open a business and make a living for themselves?
Agreed, I have no idea what your definition of Anarchy is. I think the other poster said it, you sound more like a commie, using some crazy definition of Anarchist to pass off your views as better than what they
Re:human nature (Score:5, Insightful)
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)
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.
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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
BZZZT! REALITY GROUND ERROR! (Score:3, Insightful)
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
80% by square mile perhaps. (Score:3, Interesting)
If you live in the city or most 'burbs you have at least DSL and cable. Also dialup and satallite but they suck. Classic Oligopoly.
Markets rarely devolve into monopoly (outside the fevered imaginations of 'know it all college hippies'). Much more typical is the other way around (additional competitors enter the market over time), which is why wireless is so important. Much lower barriers to entry.
The CATO institute? (Score:3, Funny)
Since this is from the CATO institute, I will just go ahead and assume all their conclusions are bullshit.
Re:The CATO institute? (Score:5, Insightful)
Since this comment was made by ValuJet, I'm going to stick my fingers in my ears and shut my eyes and scream "nyah nyah nyah" and hope that I don't hear anything that disagrees with my existing biases.
See (Score:2)
In Other News... (Score:5, Informative)
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.
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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.
Re:In Other News... (Score:4, Insightful)
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Or, more likely.....
These very same banks were required, by regulation, to provide bad loans.
And also....
These loans were mostly all bought by Freddie and Fannie, with the assumption that no matter how bad their decisions were, the government would spend any amount of taxpayer money to keep these quasi-private companies alive. Funny how that works. Perhaps the government shouldn't be in the mortgage business.
Re:In Other News... (Score:4, Interesting)
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.
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You made up the part about "certain neighborhoods ... had a high percentage of bad loans". Pure fiction. And you forgot to mention that borrowers were "ineligible" because of the color of their skin.
The CRA did not force any bank to make a bad loan; the CRA simply forced banks to stop discriminating based on race. They were still completely free to use creditworthiness part of their decision to write a loan.
Re:In Other News... (Score:5, Informative)
Except that they weren't. Stop repeating these republican blogosphere lies.
Re:In Other News... (Score:5, Informative)
Re:In Other News... (Score:4, Insightful)
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!!!
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Whether that's the case or not, the banks had a financial motive that made them take on a lot of them, and it's called "making oodles of money." Which, if you'll recall, is at the heart of capitalism.
A hiccup in the default rate was a catalyst for this, to be sure, but it only changed by a few percent, not even close to enough to dent our economy. Except for the fact that that few percent was leveraged forty to one through the sw
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There you go again. More right-wing nonsense. 19 of the top 20 originators of sub-prime loans were not subject to the 1977 Community Reinvestment Act, so you repeat untruths, told to you by untrustworthy sources.
And Fannie and Freddie came late to the mortgage slice-and-dice party. The very definition of "sub-prime" was loans that were not good enough to be backed by Fannie or Freddie. That changed in 2004.
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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
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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:5, Insightful)
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.
that's insane (Score:3, Insightful)
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
you're ignorant of history (Score:3, Insightful)
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
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I totally agree that a bailout sends a terrible message to banks, that you merely need to be "too big to fail" and then your bad bets will just be taken on by the taxpayer.
But I keep hearing the line that the government encouraged bad lo
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And yet, the bailout and so forth was actually foreseen by some, INCLUDING free marketeers such as (yes, him) Ron Paul...
http://www.lewrockwell.com/paul/paul128.html [lewrockwell.com]
Now, I have no idea whether his reasoning is sound, so give it your best shot. But that does seem, to me at least, pretty impressive...
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I agree with most everything except the McCain comment. He's just as guilty as most of congress. He also believes taxpayers should buy troubled mortgages.
Re:In Other News... (Score:5, Insightful)
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...
Just one thing... (Score:2)
The companies in charge of access to the internet DON'T want it to work better. They would rather induce scarcity in order to scare servers like Amazon, Google, iTunes and so on into paying for their "packet protection service". Pure profit, no investment needed.
And no, as Bell Canada has just shown, thinking that competition is going to fix it is wishful thinking. Unless someone comes up with the trillions of dollars to rewire the entire internet at once and lock the behemoths out of the loop, you could
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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
Oh, wait... (Score:3, Insightful)
$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)
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...
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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
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Coming soon, ISPs which sell their service as "unfiltered".
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This.
The main issue, really, is an issue of power. The more power an entity has, the more important it is to ensure that that power isn't abused. Libertarians (with a capital L) would have us believe that "the market" will always work this out. Maybe it will, and maybe it won't, but monopolies have been broken up, and generally speaking, the consumer is believed to have been better for it.
I think that one of the reasons that the market doesn't always sort itself out is that it can be incredibly difficult
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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)
Internet service in Ontario (Score:4, Informative)
So, it's a nice theory, but Ontario (and most of eastern Canada) disproves it nicely.
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You're telling me that, with a third-party DSL ISP, Bell will peek into the ATM cells passing between your equipment and the ISP's in order to detect which are associated with BitTorrent and throttle those cells accordingly?
Forgive my skepticism.
The life of the law (Score:4, Insightful)
"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.
Corporations cannot self-regulate. (Score:5, Insightful)
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.
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There is a caveat -- given the presence of an interventionist government, corporations have shown that they cannot self regulate.
I don't think the world would be better without government regulation, but the current crisis is as much a result of poor government regulation as it is a result of poor self regulation, and it doesn't really say anything about an unregulated marketplace. Call not for more regulation, but for better regulation. Judge results, not page counts.
(Two major things are that without the
Re: (Score:2)
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.
And that is so wrong, why? Since you reference Atlas Shrugged, I would hope that you're actually familiar with it. Consider this quote from it:
I swear by my life and my love of it that I will never live for the sake of another man, nor ask another man to live for mine.
A man should live in his own interest, otherwise he's simply become an altruistic slave to the looters. All right, so that was a bit Rand heavy, but is there something inherently wrong with self interest? I don't achieve it by stepping on someone else or prohibiting their own self interest.
Re: (Score:2)
A man should live in his own interest, otherwise he's simply become an altruistic slave to the looters. All right, so that was a bit Rand heavy, but is there something inherently wrong with self interest? I don't achieve it by stepping on someone else or prohibiting their own self interest.
Reread the comment. The point of the comment is not criticism of self-interest but that banks were incapable of sustaining themselves, despite their logical self-interest to do so.
Anywhere humans and money intersect, logic goes out the window. This is why the Austrian school is wrong and the econophysicists are right.
$0.02USD,
-l
Greenspan is a liar (Score:4, Insightful)
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.
Re: (Score:2)
The idea of an unregulated market (which we have never seen in North America, BTW) is that corporations do not have to be trusted to regulate themselves because consumers will punish companies that sell poor products / services by voting with their wallets. How can you blame free market for the current mess when when the general public has always depended on the government to ban products that are "bad for them" and hold corporations accountable so that they don't have to do it themselves ?
In other words, h
Re: (Score:2)
I always figured that most people were in favor of a mixed economy involving some amount of freedoms and some amount of government controls, with the battle b
scale is too small for self regulation (Score:2)
Proponents of self regulation don't get that the scale is too small for it to work, even planet-wide.
I call BS... (Score:3, Insightful)
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.
Re: (Score:2)
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.
Really? When was Wall Street given the opportunity to "take care of itself"? The government has intervened to significantly contribute to creating problems on Wall Street and then used those problems as an excuse to intervene even further.
Net Neutrality Law is Necessary (Score:3, Insightful)
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.
Net Neutrality Law is Suicide (Score:2, Insightful)
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.
Your crazy if you think that is what the government will actually do. Look at the direction those same governments have gone so far with respect to civil liberties and freedom of speech. You want to hand the keys to the entire communication infrastructure over to them and say, "promise to do the right thing, okay". You will be delivering censorship on a silver platter, in a more augmented and frightening way. Large corporations can become corrupt, that's inherent in human nature, but there are steps you c
Re: (Score:2)
I think you missed the point. Net Neutrality protections will keep government AND corporations out of meddling by censorship of the internet. The Net Neutrality law asserts and reaffirms our right to free speech. It would actually not allow the government you are concerned about to censor and will prevent the corporations from censoring. It would protect our freedom and our liberty to free speech as it should be. Law should be used as a tool in this case to protect the rights of the individual to free speec
Re: (Score:2)
So I gather my funds and start up an ISP. My idea for the ISP is that I will block Bittorrent and other P2P transfers and supply all other services without throttling for a cheap rate. I get a number of customers because they don't care about P2P and they just want a connection for checking email and reading the news at a cheap rate.
Your net neutrality laws would force me to close down this operation in the name of "free speech" and my customers would be worse off because they would have to go over to the
The premise does not support the conlusion (Score:2)
Even granted the premise that a neutral net works better, this does not mean that ISPs will tend toward neutrality - people do NOT act rationally, which is one of the many problems with libertarianism.
Much more likely the owners of networks will feel that there is a profit to be made by throttling services and then charging.. even though everything works more poorly and even though they might even make less money in the long run. That's irrelevant: what business leaders, like anyone, act upon is their PERCE
Regulatory Capture (Score:2)
The second major point of the original article which is not mentioned in the summary above is that any government agency created to regulate net neutrality would be subject to regulatory capture [wikipedia.org].
It would be interesting to hear a rebuttal of that point here by any advocates of net neutrality.
End to end neutrality, where I own the ends. (Score:2)
I certainly didn't real 44 pages of ramblings. What I _did_ read was examples all based on an environment of enormous competition where anyone could provide a solution. Does anyone really think this is the case with ISPs? For the physical lines coming into my house I have two options. The telco or the CableCo. If you're lucky you get to choose your ISP, but even that doesn't seem to guarantee you neutrality if the Bell Canada story summaries are correct.
The point being, when competition doesn't exist,
Government as "Them" (Score:2)
It's getting easy to pigeon-hole libertarian rhetoric that seeks to divide politicians and government in general from the people they represent.
The argument that "we should do nothing, because we suck at it" (where "we" means us and our government by the people) just doesn't pull weight for me anymore. It's not as if we have more influence over commercial network operators through any other means.
Sure, market fundies are always telling us that we can exert influence within a robust, competitive marketplace.
CATO Institute: Corporate Anarchists (Score:2, Informative)
The CATO Institute [wikipedia.org] is "libertarian" the way that "libertarian" is "corporate anarchist". They oppose people creating governments to protect their rights, because those governments get in the way of corporate power to exploit those people.
The net works better... (Score:2)
Unfortunately, neutrality makes the net work better for the latter, and the latter don't provide the service or define the terms.
Ooooh, yes it can vanish (Score:2)
did it deliver?
no.
in all countries, more than half of the publications and broadcasts belong to 1-2 cartels, which are generally aligned with a particular political party, and they ensure that the persons who will support their own ends will get elected.
the 'free market' was going to assure fair competition in finance world and would regulate it itself, according t
"Libertarian" (Score:2)
it appears that libertarian view is becoming a refuge for the shysters that screwed entire world through the 'let everything be' preaching of holistic economists, since republican party is down in fortunes these days.
DONT accept them into your view. they will screw not only you, but entire world, again, if you let them.
Re:neutral network works better??? (Score:4, Insightful)
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.