The Planes, Trains and MA Bell Argument

An editorial in the Wall Street Journal called "The Railroad Precedent and the Web " takes the "doom and gloomers" who cried foul last week concerning Google and Verizon's recommendations to the FCC and lawmakers to task.

The editorial is penned by none other than L. Gordon Crovitz, the former publisher of The Wall Street Journal (saw the growth of the Wall Street Journal Online, according to his bio), executive vice president of Dow Jones and president of its Consumer Media Group. He is decidedly anti-net neutrality and anti-regulation.

In his opinion piece, Crovitz opens with the reactions to last week's Google-Verizon announcement:

"The pact to end the Internet as we know it," said a report on the Huffington Post. Wired's headline called Google a "net neutrality surrender monkey." The lobbying group Free Press called it "fake net neutrality." MoveOn.org called Google "just another giant corporation out to make a buck regardless of the consequences" and organized protests at the company's Silicon Valley headquarters.

The second paragraph is even more delightful, calling out games as one of those bandwidth hogging activities:

The cause of the hysteria was a statement issued last week by Google and Verizon focusing on the need for more competition instead of more regulation to support the "open Internet"—a more apt term than the loaded "net neutrality." The companies said that highly competitive wireless services, such as smart phones, should be largely unregulated. Bandwidth-hogging games and services could require added payments to Internet service providers.

Crovitz says that, because of what Google is now saying, the net neutrality arguments have run their course. He mentions the railroads and what over-regulation did to them. He closes by summoning the ghosts of 1970's airline deregulation and the FCC's handling of MA Bell to drive the point home:

The words of Alfred Kahn, who led deregulation of airlines under President Carter, should be required reading for anyone tempted by net neutrality. "When a commission is responsible for the performance of an industry," he famously wrote in "The Economics of Regulation" (1970), "it is under never completely escapable pressure to protect the health of the companies it regulates, to assure a desirable performance by relying on those monopolistic chosen instruments and its own controls, rather than on the unplanned and unplannable forces of competition."

This explains why an earlier generation of FCC regulators saw their role as protecting Ma Bell and its monopoly, prolonging the days of rotary dials and high consumer costs. Today's FCC should focus on increasing competition, not increasing regulation, as the better way to ensure an open Internet.

[Commentary] The new argument on net neutrality should be the old one: that those with a vested interest in broadband and wireless are probably not the best people to set policy on it. Oil companies helped soften the regulatory policies we have now to some degree and you can look to the gulf coasts of Florida and Louisiana to see how that has worked out. It should also be noted that Mr. Crovitz would be singing a different tune if ISPs like the ones he so vehemently defends decided that certain newspaper publication weren't that important compared to other publications and should go to the back of the data line. Publications, like say, the Wall Street Journal Online.