Sunday, January 27, 2019

Net Neutrality: Confusing Ends and Means

Telecom and internet regulators sometimes confuse “ideas” or “outcomes” with “policies” and “procedures.”

The problem is that desirable or intended outcomes cannot be mandated; only processes and rules that specify how an objective is to be achieved. And in a business as complex as telecommunications, policymaking too often turns on the desirable outcomes, not the policies to promote such outcomes.

At best, that is a simplistic or superficial way to set policy; at worst, a virtual guarantee the the expected or hoped-for results will not be reached.

Those were some of the themes Dr. George Ford, Phoenix Center chief economist, discussed from the center stage at the recent PTC’19 conference.

For example, “an ‘open Internet’ is an idea, not a policy,” said Ford. Open Internet is an outcome, not a set of policy procedures the Federal Communications Commission might create. So an open internet is to clean bathrooms as “no blocking of lawful content” rules are to checklists about when a bathroom is to be cleaned, what is to be cleaned and with what disinfectants.

“This confusion over ideas and policies is endemic to nearly all modern policy debates,” Ford says.

In the U.S. context, an “open internet” is one that permits “no blocking” of lawful content and “no fast lanes.” Those are examples of outcomes” (ideas, not policy).

Title II regulation is a policy originally developed to govern voice services. Known as “common carrier” regulation, Title II’s guidelines for setting prices is that they be “just and reasonable.”

Both objectives--no blocking and no fast lanes--actually violate Title II pricing rules. “No blocking” means zero price. And zero price, in a common carrier context, also means “zero cost.”

Though each instance of internet access use by any user does carry some non-zero cost, that cost is close to zero, but not zero. A “zero” price level is unlawful, in that case.

Second, “no fast lanes” implies that edge providers receiving different levels of service cannot be charged different prices, Ford says. But Title II “allows, if not mandates, different prices for things with different costs.”

The problem, Ford argues is that popular understanding was that the issue was the “openness of the Internet.” That never was the case. The issue was the merit of the Title II, common carrier policy as a way of preserving Internet openness, versus all other possible approaches.

Instead, one particular policy tool was said to represent the open internet; the rival positions as opposed to the open internet. That was a false and misleading choice.

Some might also argue that fast lanes already exist, in the form of content delivery networks. Also, internet access pricing is differential. Slower speeds cost less; faster speeds cost more. Usage limits likewise are differential. Neither affects internet openness.

In real life, we often say there is a difference between  ends and means. Ideas are outcomes or ends. Policies are means. The policy debate was not helped by confusing ends for means, or means for ends.

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