Curly Capitalist Questions 17 Owning the Internet

Byron asks

Network neutrality; this is something causing a stir about the online community, for-profit content providers (movie studios, record companies, software companies etc) want to pay Internet Service Providers to prioritise their content on the net (meaning it will be delivered to users faster than other content) this disadvantages non-profit content providers such as free/open-source software sites, the Internet Archive, and Wikipedia Not to mention things like small independant blogs (New Zeal for example)

Is this fair? if so, why? and if not, how do we stop it happening?

Also something related, the Internet is regulated mostly by non-profit organisations (with no connection to private business or the state) is this the right way to run it, or would it run better if those organisations were run for profit?

I had to think about this for a long time. I have little technical knowledge of the Internet and certainly stand to be corrected. This answer relies on my understanding of the principles of laissez-faire capitalism.

My understanding of the Internet and cyberspace is that it is thankfully almost impossible to regulate. It is a near perfect example of “laissez-faire“, serving private individuals, businesses, governmental organisations and NGO’s.

I see nothing wrong with certain organisations paying ISPs for certain favours. In the long run however I don’t think it will help them that much.

If certain ISPs are willing to provide better service for more money, all power to them. If people don’t like this approach, other ISPs will spring up to compete with them.

I think the Internet will become more and more business run and I have no problem with this. No business will ever come to dominate the “net“, because the whole thing is so fluid, dymanic and multi-polar that it would be like trying to drain the ocean with an egg cup.

The biggest threat to the “net” comes, as usual from governments and government agencies, either national or supra-national.

China has already bullied Google into restricting its services into that country and the UN would love to control the net if it could.

So there’s my answer Byron. Private interests, unsupported by government power are good for the net.

The power of the state is the real danger, which is probably why such a large proportion of IT experts and net junkies are libertarians or anarchists.

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2 thoughts on “Curly Capitalist Questions 17 Owning the Internet

  1. “If people don’t like this approach, other ISPs will spring up to compete with them.”

    I don’t see this happening, especially not in New Zealand where Telecom has a monopoly. I think the more likely result is that people will use whatever services their ISP prioritises on the network. It could be argued that this is interfering with the market as it limits freedom of choice.

    I agree that the state is a danger to the Internet, but I don’t see how corporate power is any better; a democratic state should, at least in theory, answer to the people, a corporation only has to answer to its shareholders, so I see corporate control as just as bad, if not worse.

    I think the Internet is becoming controlled by the users, this is obvious in things like Wikipedia and the Free software movement, but even with Internet business- for example MySpace and Youtube, if the users of these sites stop creating content, the sites will lose their audiences and therefore their advertising revenue, so people have some control over those businesses.

  2. Telecom doesn’t have a monopoly Byron, it has a dominant position.

    Why is that?

    Because the state used to control all telecommunications infrastructure, which they sold to Telecom.

    Had the state never been in the telecommunications market, this country would have had many companies in the telecommunications industry, much more competition and more consumer choice.

    The key difference between private businesses (including corporations) and the state, is that the state has a monopoly on co-ercive power.

    If the state gets it wrong, it simply forces you and I to pick up the tag.

    If a private company gets it wrong it risks going under.

    One of many resons that private business is actually more accountable than state enterprise.

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