Tuesday, February 17, 2015

Oppose Net Neutrality

Putting on my economist hat! (and declaring I am not an economist on anyone's payroll except the University of Akron)

Economic Reality versus Wishful Thinking again!

Please learn about Net Neutrality and write the FCC to oppose it. (Comment here http://www.fcc.gov/comments on proposal 14-26)

Too many people on all sides of the political and social spectrum seem to favor it. The Internet is not a telecommunications utility. It should scare you that all the large companies are in favor of it. Regulations are often packed with the nicest sounding words, but this is not in our (read the consumer's) benefit. It is in the benefit of the huge corporations. Regulation often protects the status quo which is the large businesses. This passes and the future possibilities of starting a business on the internet or starting your own blog may be so encumbered that the new business or media won't take place.  You may have to give you permission or a license to start your business or media site. This will protect the existing cable and internet providers.

Right now you don't need to fill out forms and pay taxes to start up a business on the internet, but after the FCC rules on net neutrality you may have to, in fact I think you will definitely have to. This will return the sales tax on the internet -- imagine how you will have to know the tax rates in all jurisdictions in the country, collect the tax and disperse it. That alone will discourage new and little business. Big companies, no problem they can afford a department of accountants and programmers and they will pass that cost on to you.

I have decried the appalling lack of economic literacy for my 35 years of teaching. I have tried to do my part to get people to understand economic reality versus wishful thinking. Net Neutrality being able to improve things for you is wishful thinking. Contact the FCC now and complain - do not support the new rules. You must get your comments by Feb 26. Make your voice heard or you will be sorry. Netflix will cost you more (I know they say it will be less, but they want this) and a competitor to Netflix will not be able to get started without satisfying the regulators.

Check out this video to see my point made.

Regulation is helpful when the market is not competitive if the goal is to deal with the competitive elements by causing them to lower price and increase service.  This is the classic text book use of regulation moving the market to increased efficiency. If the government goal was to lower Netflix's price and forcing them to increase service then perhaps.... but Netflix would not be the major company in favor then would it?

Write the FCC now or your use of the internet will forever change for the worse. The FCC commissioner has commented that the media on the internet needs to be controlled so you have a more truthful source. That should scare you to death. The bad parts on the internet and the quacks that write nonsense is the price of freedom. I do not want all my news pre-approved which could happen.

Economic reality is far more important than wishful thinking.