Home / Internet / Net Neutrality = Price Controls
Print Friendly and PDF

Net Neutrality = Price Controls

Written by Gary North on February 10, 2015

It is really quite easy to understand what net neutrality is all about. It is Obama’s plan to bring the Internet under the control of the federal government.

The Federal Communications Commission keeps announcing its authority over the Net. It was slapped down by the Supreme Court. But it’s back.

This time, it wants to impose price controls. It wants to keep all prices paid by media companies the same.

What if an Internet Service Provider wants to charge Comcast or Netflix more money, because it’s hogging the available bandwidth? The FCC says no.

This is the fundamental law of economics: “At zero price, there is more demand than supply.” The FCC denies that this law exists. So, it wants to slow everyone down by making sure that the big boys don’t get charged more.

Here is the law of bandwidth: “Bandwidth gets cheaper.” So, the growing pie will keep us all well-fed. If buyers are sellers of bandwidth want to negotiate, so what?

Obama and the FCC are trying to get the regulatory camel into the communications tent by promising “free” goodies to the voters: below-market pricing of their programs. The price will be paid: less innovation, less bandwidth than would otherwise have been the case.

Obama promises “no toll roads on the information superhighway.” This means traffic jams in peak hours.

Obama and the FCC want a legal precedent: control over the Internet.

The free market response is simple: “No price controls. Let the market decide.”

Simple, isn’t it?

If you like rationing, you’ll love net neutrality. If you like bureaucratic control over market pricing, you’ll love net neutrality.

Print Friendly and PDF

Posting Policy:
We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse. Read more.

Comments are closed.