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Saturday, July 4, 2009

On Alex Keaton, Adam Smith, and God

In the 1980s, Justine Bateman appeared on the TV sitcom “Family Ties,” perhaps best known for the character Michael J. Fox portrayed, the young free market adherent Alex Keaton.  We know from her appearance on “Family Ties” that Ms. Bateman can read her lines, and that skill was on display again today at the Senate Commerce Committee’s hearing on “The Future of the Internet.”  But beyond reading her lines well, what did the former “Mallory Keaton” have to say?  Well, a good deal that would have driven her brother Alex nuts.

In her testimony, Ms. Bateman implied that broadband providers are attempting to constrict access to the Internet.  She offered no evidence to support this assertion, and since broadband providers are in the business of trying to earn a return on their investments, the market would discipline any provider that did so.  As Adam Smith noted in The Wealth of Nations, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."

Next, Ms. Bateman sites the Book of Genesis to allege that broadband providers are somehow conspiring.  With all due respect to Ms. Bateman, I don’t recall an extensive discussion of corporate interests in the Good Book.  What I do recall is a pretty well-developed discussion of how human beings are created in the image of God and endowed with both rationality and responsibility. Because we have rationality and free will, we can choose between various competing products and services, including in the broadband marketplace.   

Alex Keaton would have gotten both of these points, and it’s too bad Ms. Bateman doesn’t.  Skilled reading of one's lines is nice, but her presentation would have been a whole lot more compelling if she had spent more of the ‘80s listening to her "brother."

To the Christian Coalition: Be Careful What You Wish for on Net Neutrality

I want to share a letter I sent earlier today to Mrs. Roberta Combs, the president of the Christian Coalition of America. A representative from Mrs. Combs' organization is scheduled to appear Tuesday at the House Judiciary Antitrust Task Force hearing on "'Net Neutrality" and Free Speech.

While the Christian Coalition supports net neutrality/Internet regulation, I think it's critical to consider all of the possible and likely ramifications of government mandates in this area. In that respect, the letter speaks for itself.

I am sincerely hoping that groups such as the Christian Coalition of America recognize the outstanding work the wireless industry is doing to provide parents with useful tools to control  Internet access on their families' wireless devices, as well as the steps carriers take to protect their customers from unwanted and unsolicited material such as pornography and spam, and acknowledge the negative practical implications of ill-advised net neutrality mandates.

If It Ain't Broke...

This year’s first ‘official’ step in the internet regulation debate was taken earlier this week, with the introduction of the “Internet Freedom Preservation Act of 2008” http://markey.house.gov/docs/telecomm/hr5353.pdf. There is a lot to talk about its implications and intentions, and while stakeholders are in the process of thoroughly reviewing the proposal, I want to suggest we could all save a lot of time and effort right now by answering a simple question:

What is the problem the bill is trying to ‘fix’?

Language in the bill indicates its purpose is to “promote openness, competition, innovation, and affordable ubiquitous broadband service for all individuals in the United States”.  Oh. You mean, like we have now.

The internet is a great American free market success story. It is flourishing today and is such a vital part of our lives because service and content providers all over the country and the world are driven by competition to innovate on a perpetual basis. The recent NTIA broadband report reveals robust broadband competition between multiple cable, satellite and wireless service providers, and that wireless is clearly becoming the internet access avenue of choice by new subscribers http://www.ntia.doc.gov/reports/2008/NetworkedNationBroadband
inAmerica2007.pdf.
  And last summer, the Federal Trade Commission’s Broadband Connectivity Competition Policy report http://www.ftc.gov/reports/broadband/v070000report.pdf  concluded that competition and innovation was thriving in the U.S. broadband marketplace.

So again, what is the problem the bill is trying to ‘fix’?

The internet regulation crowd bases its claims on hypotheticals that suggest we need to do something today to make sure something that is highly improbable won’t happen tomorrow. There is a reluctance to recognize the facts and accept the situation they illustrate. The market is working, wonderfully, and corrective mechanisms already exist and can be enforced should they be necessary. New business models might evolve, but consumers will let providers know loudly and clearly what they think of them. That’s what has spurred internet growth in the past, and is a guaranteed formula for success in the future. If you’re not familiar with the FTC report, take some time to look it over. Consumers are getting service, value, choice, and access to content like never before, and the last thing we need is for the government to intervene and risk bringing internet innovation grinding to a halt. Now that would a problem that would need fixed. Let’s just hope we don’t have to.