By Holman Jenkins
An interesting 1968 study by the late cognitive scientist Jerome Lettvin calls attention to the intellectual limitations of the frog, who attends only to small, moving objects in his field of vision. He does not understand much else about his environment. "He will starve to death surrounded by food if it is not moving."
The frog is much like the net-neutrality obsessive, who understands less and less about the broadband world that actually exists and yet ferociously insists on the importance of reinstating the Federal Communications Commission broadband antidiscrimination rules that a federal court just threw out this week.
Net neutrality is the principle that network operators must treat all data crossing their networks the same. Take the latest palpitation of the net-neut crowd: AT&T's introduction last month of "sponsored data" on its wireless network, which the company likens to the "1-800" service it offers over its increasingly obsolete long-distance voice network.
Businesses would be invited to pick up the tab for any wireless data they send to their customers or advertising targets so it wouldn't count against the customer's wireless data cap. AT&T's proposal comes at a time when the wireless world is more competitive than ever, thanks to a rejuvenated Sprint S -0.66% and T-Mobile.
What the net-neut obsessives refuse to recognize is that anticompetitive intent isn't worth worrying about if an anticompetitive result isn't possible. If AT&T were "double-dipping," or charging sender and recipient for the same data, as some allege, its rivals would quickly copy its innovation and compete away any excess revenues. If AT&T were to degrade websites that don't pay up, its rivals would pounce and steal AT&T's dissatisfied customers.
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Again, this assumes that there are enough participants so that price-fixing doesn't take place.
ReplyDeleteFive thousand providers = free market, five providers = cartel.
It is a fallacy, exposed by Rothbard and other Austrians, that a free market requires numerous participants. A free, competitive market in a good can exist with only one participant. The key is not how many participants currently exist, but whether there are barriers to entry enforced by government violence. The IP industry is truly a cartel, but not because there are only a few of them. It's because no one is allowed to freely enter the business. For example, Comcast has monopoly agreements with thousands of local governments.
DeleteThe same goes for the hospital cartel, it is still a cartel even though there are many, many hospitals, easily more than 5,000. That proves the fallacy that 5,000 providers means no cartel. Just try to start a new hospital and see what happens. You can't.
This assumes no one like G. Soros exists that can take ill gotten gains from destroying the British pound, and putting in a bet 4 hours before the US credit rating dropped that that gave tens of billions each & that he wouldn't do everything he can to block the Jewish pro gun website JPTFO which shames him.
ReplyDeleteJenkins is the frog. I stopped my subscription to WSJ over their pro NSA position. Not surprising that doctrinal free-marketers, of which I count myself a member - except in this one case - would laud the decision to kill the internet as we know it. There is very little competition in broadband and the demise of the net neutrality rule will make the internet a less useful utility and degrade the experience for all considerably. I was a web master for a giant dotcom era web firm. I read rfc's for fun and profit. I count myself a more informed judge of this matter than Holman Jenkins.
ReplyDelete"...the intellectual limitations of the frog, who attends only to small, moving objects in his field of vision. He does not understand much else about his environment. He will starve to death surrounded by food if it is not moving."
ReplyDeleteBy God, THAT may just be the best definition of Big Government and its attached parasites that I have ever seen!!!