Monday, October 01, 2007

DoJ on Net Neutrality

According to K. Lloyd Billingsley, writing at TCS Daily, the Department of Justice has taken exactly the right stance on "net neutrality":
Net neutrality means government regulation of the Internet, specifically a prohibition of differential charges for priority traffic. The Department of Justice thinks this is a bad idea, and would harm the development of the Internet.

"Free market competition, unfettered by unnecessary governmental regulatory restraints, is the best way to foster innovation and development of the Internet," says the DoJ filing [with the FCC on September 6]....

"There is reason to believe that the type of regulatory restraints proposed by some commenters under the mantle of 'neutrality' could actually deter and delay investment and innovation, and result in less choice and higher prices to consumers of Internet services," the Department said.

In the lexicon of net neutrality, differential or priority pricing is called "discrimination," but the DoJ does not buy this rhetorical effort to seize the moral high ground. "Differentiating service levels and pricing, for example, is a common and often efficient way of allocating scarce resources and meeting consumer preferences," the filing explains, using the United States Postal Service as an example.
DoJ might have used a better example than USPS. Nor is differential pricing restricted to service. The most expensive items purchased by consumers (houses and cars) are price-differentiated to a fare-thee-well. Imagine the furore if government regulators decreed that all houses and cars had to be the same and sell for the same price.

The bottom line: DoJ has it right about "net neutrality." As I wrote here:
By the "logic" of net neutrality, everyone would be forced to accept goods and services of the same quality. That quality would be poor because there would be no incentive to produce better goods and services to earn more money in order to buy better goods and services -- because they couldn't be bought. Reminds me of the USSR.
Read the whole thing. It's on the mark, if I do say so myself.