‘Net Neutrality’ Between the Earned and the Unearned

March 6, 2015

Harry Binswanger

Real Clear Markets

The FCC just voted to impose “net neutrality” on us. What is this all about?

The Left has discovered to its horror that products of human intelligence and effort-such as the delivery of internet service-are being sold on the market! This means that for a citizen to have “access” to such products, he has to pay for what he gets at a market price and respect the rights of the provider of that product.

In the Left’s eyes, this is both unfair and dangerous. Unfair-because those with more money can afford to buy better versions of the product (such as faster internet service). Dangerous-because the provider of the product could refuse to sell to anyone at any time, depriving him of the “access” to the product that is his by divine right. Adding to the Leftists’ outrage is the fact that large firms can negotiate better prices.

When it comes to internet service, the Leftist objection is that companies like Comcast and Verizon offer premium service: higher speed at a higher price. That just isn’t “neutral”: some privileged people have faster internet. What makes them privileged? Merely that they are wealthier and can pay more to get it. But that leaves the poor with slower internet, which makes them feel inferior to the rich. And what is to stop Comcast from denying service to racial minorities? Or to those who want to put up web sites with content that Comcast doesn’t like?

Now try applying this leveling approach to other products. Take gasoline. The Left would have to say it is unfair that higher octane gas is sold at a higher price. And that taxi fleets buying large quantities of gas can negotiate a lower price. Or apply it to air travel. What could be more non-neutral than offering first-class seating at higher prices? The poor are deprived of “access” to those seats. The government must forbid first class and business class to establish “air neutrality.” When we have only coach class, those with less money won’t have to feel inferior to those traveling in the front of the plane. By the same token, don’t we need government protection against the major airlines conspiring to refuse air service to, say, Democrats? Air travel is a basic human right, so we must institute air neutrality forthwith.

Okay, it’s a little harder to switch internet service providers than to switch gasoline companies or airlines. But that’s a side issue, a diversion. There is no inherent reason, except government coercion, preventing there being more competing providers than the present cable, phone, and satellite dish companies. The advocates of net neutrality are not really concerned with the almost “monopoly” status of companies like Verizon. The real driving force of the campaign is antagonism toward property rights. The Left bristles at the idea that the producers own what they produce. Owners have the right to set the terms for the use or sale of their property. There is no such thing as a right to “access” the products of others. That would mean the “right” to force those others to provide these products on terms dictated by the state.

Yes, people with more money can buy more and better goods than can those with less money. It is better to be rich than poor. That is what motivates people to earn more money. But to the Left, that is social injustice. How did the rich get rich? Blank out. The actual neutrality sought by the crusaders against “social injustice” is neutrality between the earned and the unearned. We are to be neutral as between the creators and the aspiring parasites demanding “access” to what the creators create.

As Popular Economics author John Tamny points out, “Without the high-earners paying more to sit in first class and for faster internet, there would be no flying coach and no slow internet.  The rich are ‘venture buyers’, they pay up for things, and the luxuries they enjoy happily foretell what we’ll all eventually have if markets are left free. Neutrality means everyone gets the same thing — nothing.”

The practical consequence of the recent ruling is that the government now controls the internet. In the name of limiting the power of firms like Comcast, AT&T, Time Warner, and Verizon, all the power has been concentrated in the government. I don’t expect any immediate changes for consumers. But the government now holds the reins, and it’s just a matter of time before they begin pulling back on them.

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