If you are in favor of net neutrality because you detest Comcast, you are being played, just as John Oliver, the latest adorable enfant terrible of Comedy Central and HBO, is being played.
His impassioned—and hilarious—rant on the urgent need for the Federal Communications Commission to formally disallow such things as a “fast lane,” and instead impose “net neutrality,” has been viewed on YouTube nearly 8 million times, making it likely the most influential single factor in the public debate. Indeed, the FCC passed a proposal Thursday that paves the way for net neutrality by classifying broadband as a government utility.
Oliver’s segment is as funny and persuasive in its presentation as it is wrong-headed in its conclusions. Take a look, and then we’ll discuss how and why it is so misleading, and its wide circulation so unfortunate. You are being led to believe that “net neutrality” will deliver one thing when, in fact, it will deliver exactly the opposite.
Convinced? Sure. So are a lot of people, which is too bad, because Oliver is wrong not by a little bit, but by 180 degrees. He has cobbled together a few verities to arrive at a solution that would guarantee the very thing he is trying to prevent, leading his claque of like-minded admirers right off a cliff.
First Obstacle: Net Neutrality Is Boring
He is right, however, in at least two of the things he says in the video: “Net neutrality is actually hugely important.” And: “If you want to do something evil, put it inside something boring.” Yes, it is boring, and it is important, and, unfortunately, explaining why FCC intervention is so insidious is complex and a lot harder to do than simply perching on everyone’s loathing for Comcast to adopt a kind of “Call the cops, put ‘em in handcuffs and send ‘em to re-education camp” approach to coughing up the Internet into the eager talons of the FCC.
That’s why I’m going to have to ask you to stay with me while I offer a broader viewpoint on this. We’ll start with a venerable Chinese proverb (of course) then, in order to limn the somewhat counter-intuitive underlying economics of all this, we’ll move on to something seemingly far afield: Airplane seats. Then we’ll refresh our memories about Br’er Rabbit and the briar patch, and finally we’ll take the specifics of what we’ll call “The John Oliver Argument” and show why the things he believes militate convincingly in favor FCC intervention actually argue powerfully—even frighteningly—against it.
Yes, it really, really is important. Otherwise, I wouldn’t ask you to go along on this ride. But I hope you do. Because the fate of the world hangs in the balance. Or close to it.
Net Neutrality’s Very Name Lies About It
Here’s the Chinese proverb: “The beginning of wisdom is calling things by their right name.”
“Net neutrality” has nothing to do with neutrality: It has to do with who is going to prevent Comcast from doing bad things. (By the way, when I say “Comcast,” I mean Time-Warner and all the other pestiferous cable companies, too.) This is the “shiny object” they want to mesmerize you with—this fury at the cable companies—so you won’t dig too deeply into what they’re trying to do. Oliver says, flat out: “advocates should not be talking about protecting net neutrality—they shouldn’t even use the phrase. They should call it preventing cable company f__ckery.”
That’s funny, sure, but blinding because that is not what it is about. That’s what they want you to think it’s about to get you to support it.
Make no mistake: the benign term “net neutrality” is camouflage for a far less innocent meaning: Government regulation of the Internet. (No, you don’t need to know the intricacies of Title II and all that, you just need to know that government will be assuming the power to run things.) You might think that’s a good thing, or you might think it’s a bad thing, or you might even think the government won’t screw around even when it has the power to do so, but before we can move on we need to be honest in calling it what it is: Essentially a governmental putsch of the Internet.
Once we know what it is, you can decide whether you like it or not.
The Fast Lane/Slow Lane Canard
Scaring you into thinking you’re going to be consigned to some kind of broadband back alley is another “shiny object” intended to distract. Here’s how Oliver describes it: “Ending net neutrality would allow big companies to buy their way into the fast lane, leaving everyone else in the slow lane.”
Here’s how stupid that statement is: “Ending tech neutrality would allow Apple to provide faster iPads for more money, leaving everyone else with slower ones.” Or, “Ending car neutrality would allow Ford to have big dealerships all over the country, while Tesla has to struggle to find a market.”
The fast lane-slow lane issue is the tiniest part of the overall picture, and people will deal with it in the same way competition always has, so long as it is left alone. Fast lanes, slow lanes, all kinds of lanes will develop and emerge and die and be replaced, based on market demand (that’s you and me), so long as something doesn’t intervene to thwart the process. No matter what somebody puts in the “fast lane” or how much they pay for it, if customers don’t want it, it goes away, replaced by something else.
But, you say, the “something else” won’t have a chance unless the government steps in to provide it with one. Baloney. They’ll have the same chance as everyone else throughout time. Hewlett Packard started with a couple of guys in a garage. Good ideas have to struggle to the surface. They always have, and they do and they will. It’s how we know they’re good ideas. Companies or entities that try to prevent that from happening eventually get found out and dealt with. Think “Occupy Comcast.”
It’s how a market works. Besides, if Comcast screws around too much, whether trying to strong-arm Netflix or anyone else, there is, despite what those promoting government intervention will tell you, a market-based solution that is not only the most effective way to deal with venal overreach, it does so without sacrificing the core dynamic of any entrepreneurial entity, of which the Internet is perhaps the quintessential example. More on this later.
But, you say, the stuff you want is going to be in the slow lane, and the stuff the other guy wants (you know, the rich guy), is going to be in the fast lane. Maybe. It’ll depend, and it will change and evolve, in pretty much the same way as it has from zero to now, because paying more for something, as a consumer or even as a provider, isn’t necessarily a bad thing. In fact, it can be the best thing ever. No?
What Jet Neutrality Can Teach Us About Net Neutrality
Try to think of something you really, really like—enough so that even if it cost you more, you would still buy it. You might not be happy about paying more, but if you had to, you would, that’s how much you like it. Maybe it’s chocolate. Maybe going to ice hockey games. Or spin class with Olaf. Whatever. For me, it’s an airplane seat with a little leg room.
I’m six feet, four inches tall. For me and people like me, flying is a carnival of discomfort. We’ll do anything to get more leg room. In the past, there were two ways to do that. You could pay a lot more and get a business-class seat, or you could buy coach and try to finagle an exit row. Rules stipulated that exit-row seats were blocked until 24 hours before the flight, at which point people like me would be furiously dialing and inter-netting to try and switch our assignments to those seats.
Sometimes it worked, but usually it would be fruitless, the seats automatically going instead to a favored frequent flyer with four million miles, often that person being 5’3”. I have spent flights with my knees pressed against my cheeks, staring over at the much smaller person sitting in the exit-row seat I coveted, mentally assessing whether the knee space in a normal seat would have made any difference to them at all, as they sat with much more room than they were actually making use of—while I suffered and lamented my ill-fortune and, of course, the unfairness of it all.
Happily, things changed a while back: Airlines figured out that they could make a few extra bucks by selling that extra leg room rather than giving it away for free. Now, for between $18 and $30 extra I can get the legroom that makes a huge difference to me, so is well worth the price. More happily still, that seat is almost always available for purchase because those 5’3” people who used to get it have no interest in paying for something they derive no benefit from. That latter part is more important than you might think. Charging a little more for the seat cleared out all the people who had no interest in it or use for it. They simply got out of my way. Hooray!
I love the fact that I have the opportunity to pay extra because it allows me to get what I want, and it’s taking nothing away from the people who are still getting what they always got before in their normal coach seats. In the long run, things even out: Chances are there’s something they like somewhere, and the same dynamic will get me out of their way. And so on.
Do You Want to Set Prices, Or Do You Want Regulators to?
This is the “good” part of the open marketplace, where people who provide stuff get to try and figure out how to do it at a price people are willing, voluntarily, to pay. The 5’3” passengers couldn’t care less if I pay extra for my seat, because they don’t want it and don’t need it. They, on the other hand, might be delighted to have the opportunity to pay $5.20 for a mocha latte, which is, it goes without saying, insane.
Charging more for something is not always a bad thing (for you and me). It is a mechanism whereby folks who provide something can do so for the people who want it, in a way that makes sense for both. Throw a monkey wrench into that and bad things happen.
Despite fervent and calculated efforts by some to convince you otherwise, net neutrality is a huge monkey wrench, and if it gets thrown in, the only thing that will get immediately stunted is everything that makes the Internet what it is, and everything we love about it, and this is true no matter how much folks with a control agenda try to obfuscate that fact.
Remember that thing you would be willing to pay more for like I would for the exit seat? I’m not going to spend the time here to explain why what I’m about to tell you is true (although it pivots on the monkey-wrench issue, which is to say, the fundamental forces of the marketplace) but if you think “net neutrality” implies the choice between paying what you are now paying for whatever it is you like, instead of paying more for it, you are misreading the implications. The choice may very well turn out to be between paying more for it—or not being able to get it at all, sort of like my airplane seat.
If the regulators don’t want you to have it, you’re not going to get it, at any price. Why would they not want you to have it? One of two reasons: Either they’ve decided, in their greater wisdom, that it isn’t good for you, or Comcast doesn’t want to give it to you, and their Roman legions of lobbyists have “persuaded” the regulators to see things their way.
The important thing to remember is that in a marketplace, the consumer (that would be you and me) is king; in a government-regulated arena, the provider is king. (You thought I was going to say the government is king, didn’t you? No, it’s the provider, and we’ll talk about why that is so, and what it means here, anon.
Comcast as Br’er Rabbit
Surely you remember the Disney version of this fable: Br’er Rabbit runs around annoying everybody, telling them they can do anything they want to him, “Just don’t throw me in the briar patch…” Eventually they get angry enough to, indeed, throw him in—at which points he hops and frolics, happily singing, “Born and raised in the briar patch…”
Net neutrality is Comcast’s briar patch, as it is for Google, Facebook, and Amazon—all of whom are highlighted in Oliver’s video as banding together in favor of “net neutrality,” which, they know, and we now know, simply means government stepping in to regulate things. To his credit, Oliver points to a very odd thing about that, and to his discredit, he draws exactly the wrong conclusion. Here’s how he frames it: “What’s been proposed [allowing “fast lanes”] is so egregious, activists and corporations have been forced onto the same side.”
Really? That’s the reason? Here’s another possibility: Those behemoths favor a government takeover because they have a bazillion people on staff who know how to work these regulations, and any regulations, to their advantage, which keeps out unwanted competition and relieves them of the need to be responsive to market forces (that would be, again, you and me).
You, on the other hand, are so angry at the cable guy for not showing up between 8 and 12 a.m. that you are willing and even eager to go along with something that is ultimately in your worst interest—as should be evident by the corporate giants you are perhaps for the first and last time in your life willing to get into bed with. This is to say, they are smart and calculating and you are a laughably credulous idiot whom they are more than happy to hoodwink, and by you, I mean Oliver.
This is so central, and so important, that perhaps we should take a deeper look at it.
Cable Companies Don’t Want to Answer to You
Comcast will be answerable to somebody: They would prefer it to be the government. That’s because dealing with the government is a lot easier than dealing with the marketplace—at least if you have the kind of machine in place that Comcast does. Also, the government can ensure your survival even if you treat your customers like vermin, while, if left to the devices of the marketplace, your survival might be in question.
Sure, you’ve heard it all: $18 million spent on lobbying, huge donations ($4.5 million in 2014) to political candidates, influence all over the place, back-and-forth through the lobbyist revolving door, endlessly. Sometimes, though, it’s the little things that really tell the tale. For example, have you ever heard of David Krone? He is Senate Minority Leader Harry Reid’s squirrely, widely detested chief of staff. Say what you want about Reid (on second thought, don’t), but up until a very short time ago he was arguably the most powerful, influential man in DC, after the president. Krone’s prior job? Senior vice president of Comcast Corp.
They’re everywhere, including at the head of the FCC, where Tom Wheeler, a former top lobbyist for cable and wireless companies, has been installed. As Oliver says, “Yes, the guy who used to run the cable industry’s lobbying arm is now running the agency regulating it.” But Oliver fails to draw the appropriate and quite obvious conclusion from this: that the cable companies are controlling things; they want to control things more, and they are positioning themselves to do just that.
They’ve been donating and influencing, and if they can get away with taking the attitude that their cable installer’s time is a lot more valuable than yours, it’s because of all that donating and influencing.
To put it more directly: Influencing government regulation—or, sometimes more importantly, the implementation of regulations—is Comcast’s business model. It’s what Comcast does. It’s how they got where they are. They know how to do it and they’re good at it. All those things you hate about Comcast (remind me to tell you the story of how I had to go to the Comcast office, physically go there, 13 times in order to get a simple name change done on an account)? Oliver is entirely correct when he points out that this sort of disregard for the customer is made possible only by having been granted a monopoly by the government. “Maybe,” he points out, “it’s because of their lack of competition that they get away with providing such sh__ty service.”
Except that they don’t have a monopoly. They have a partial monopoly, and this is the crack in the door, the window of opportunity. Yes, most aspects of what we receive from them as customers is controlled and permitted by government regulators. Here’s how you can tell which parts are regulated by the government, and which are not: The parts we hate are regulated, the parts we don’t, aren’t.
If Oliver is right when he says that the reason Comcast can be so horrible is because the government has given them a protected monopoly and controls the way they operate via regulations over which they have huge influence—and he is right—then what on earth would make him think the solution to these regulation-induced problems is—wait for it—more regulations they can influence?
Comcast Needs to Be Dealt With, But Not This Way
Good grief. Could it be any clearer? Net neutrality is good for Comcast and bad for you and me, and you ought to be as against it as you’ve been against anything in your life. In an unfettered marketplace, a company as marinated in abysmal, arrogant customer service and ravening price-gouging as Comcast would have been out of business long ago, crushed under the stampede of customers rushing to take their business elsewhere. But, thanks to government intervention, there is no elsewhere—yet. There are those who would have you believe that the only way, then, to keep Comcast fair and upright is for the regulators to step in, take things over, and demand it.
But you and I have far more influence over Comcast than you might think, which may be exactly why they don’t mind the FCC stepping in and closing the circle, eliminating any influence from the customer base. They’re not stupid. They do not underestimate, and they therefore fear the long-term power of the marketplace, so long as that marketplace is allowed to function, even if only in part, for now. Comcast is not a monopoly—at least not a total one— despite what Oliver says in yet another boneheaded conclusion drawn from a smugly stated fact.
Here’s what he says in order to make the case that the broadband industry is a monolithic, unassailable monopoly: “A federal study found that 96 percent of the population had access to two or fewer broadband providers.” You don’t say. Here’s another way present that exact same fact: “A federal study found that only 4 percent of the population had just one broadband provider. The other 96 percent have a choice.”
Now, it might not be a great choice, but it’s a choice, which is to say, it’s a market. Maybe it’s DirectTV, or AT&T or somebody, and maybe the technology isn’t as good, yet, but if the history of the Internet has told us anything, it’s that everything moves, everything changes, everything develops, and everything seems to get better and better and faster and faster and people get more and more choices and better and better choices—so long as the marketplace is allowed to work.
Cable technology itself is rapidly becoming antiquated. More and more people are seeking alternatives and “cutting the cable,” and more and more providers are seeking ways around the cable companies and trying to invent and create things that can and will challenge them. This means a lot of people are behaving exactly the way a marketplace always works, and, in time, despite all our current frustration, they will find a way, and the Comcast edifice will either change or crumble, and all kinds of other good things will happen—unless someone stops the process, which is exactly what reclassification as a “utility” by the government will do, with the term “net neutrality” imprinted on the false flag.
It stinks. It’s dangerous. It will be one of the most unfortunate things in our lifetime.
The FCC Is Taking Over the Internet In Order to Not Do Anything
But wait. They say their purpose is to keep things as they are.
I recently had a conversation with a guy who’s in favor of an FCC power grab because, Comcast. The usual. The Oliver viewpoint. “What do you think they’re going to do when they take it over?” I asked. “Nothing,” he said. “They’re just going to step in to keep everything the same. They’re not going to do anything; they’re just going to prevent others from doing things that are crappy.”
I looked him in the eye, contemplating for a moment the enormity of his obtuseness, then said, “You can’t possibly believe that.”
“Yes, I believe it,” he insisted. “They’ve said quite clearly that all they want to do protect us from people who will screw up the internet.”
“You do understand,” I said, “that in order to believe that, you have to discount all of recorded history, where there has never been a governmental entity that acquired power that hasn’t used it? One, they use it to control behavior, to get people to do things they want them to do and not do things they don’t want them to do; two, they use it to impose taxes.”
“They say they are going to ‘forebear’ all that.” Oh. I see. They are going to take over the Internet in order to do nothing, and, more importantly, to prevent other people from doing something if that something is deemed (by them) to be undesirable. So, as just one example of all the things they are not going to do, they are going to “forebear” imposing the taxes, because, when did the government ever want to tax anything?
This will remain true no matter how much time passes, no matter how many people replace others, and no matter how many elections occur, or who wins.
These are, of course, very reliable assurances. No, the government isn’t going to step in and start micromanage things, no matter how much the lobbyists and big donors (can you say, “Comcast”) beseech them to do so, because integrity. There have been many times when the government has taken control of something and decided to simply be a benign, supportive presence, not prone to meddling, venality, mendacity, influence peddling, and corruption. In fact, here’s a complete list:
To think that handing over control of the Internet to the government will not then consign its future to the lobbyists and big corporate vested interests, is literally (not in the Joe Biden sense, but the real sense) insane, if the definition of insanity is doing the same thing over and over and expecting a different result.
Of all the arguments supporting FCC intervention, this notion of a benign, non-activist regulator is the most titanically preposterous. I mean, just how zombied out on the Kool-Aid do you have to be to even begin to believe this?
‘Nice Little Business You Have There…’
This is a stickup, make no mistake about it. As of now, the marketplace still owns the Internet. It’s ours. Sure, it’s subject to pressures, strictures, and ebbing and flowing influences, but, still, it’s ours and it will become what we want it to become, based upon our behavior as a marketplace.
Oliver is like the owner of the local establishment who gets a visit from the goon who says, “This is a nice little business you have here. It would be a shame if something happened to it” and announces that he is “your new partner”—and believes him. Oliver believes his “new partner” is going to look out for things, to “protect” him from the bad guys.
If Oliver has his way, we’re all going to wake up one day soon and realize our new “partner” is the worst thing that ever happened to us. Oliver might still be making excuses—or jokes—at that point, but the rest of us are going to be saying, “Jeez, that John Oliver: He’s an idiot.”