Suppressing Free Speech with Market Power
"There's a problem. It's called Net Neutrality," Whitacre told the heirs to AT&T's telecommunications empire on June 5. "Well, frankly, we say to hell with that. We're gonna put up some toll booths and start charging admission." See www.savetheinternet.com for Whitacre's full comments.
As the greatest suppression of free speech ever seen in the US coupled with potential economic costs in the hundreds of billions of dollars, ending net neutrality is equivalent to yanking the soapbox from most ideas that ever percolated from the bottom up since 1990.
Imagine that the whole wheat loaf of bread in your favorite supermarket is no longer $2.00. Now it's $5.00 if purchased separately or $30.00 when purchased as part of package bundled with other unwanted food products by your grocer. And it's not available at all if you purchase the $15 base package - white bread only. Now double the effect by applying similar restrictions to producers and sellers of food on the supply side and you have the framework for undermining net neutrality.
Net neutrality, meet your successor, raised prices through forced bundling and limited access, courtesy of facility-based providers everywhere, modelled after Cable TV,not subject to effective competition.
Michael McCurry is one of Whitacre's PR hacks. Selling the "exa-flood" myth as a veiled justification for ending net neutrality, the objective is to portray large content items on the internet like digital movies as high-cost "hogs", compared to other content like an equivalent number of email messages.
This implies that SUV owners should pay more for a gallon of gas than drivers of compact cars. Likewise, electric dryers and air conditioners should be assessed a higher unit rate for kilowatts or kilowatt-hours of electric use, compared to users of light bulbs and fans for the same amount of electricity. Consumers with chronic aches and pains should pay more for the same bottle of over-the-counter (OTC) medicine like aspirin or ibuprofen. Carnivores should pay more for hamburgers and vegetarians should pay higher prices for beans and rice. Etcetera.
Since the demand for products like gas, electricity and medicine has also reached "exa-flood" levels, why aren't the "consumer hogs" of these goods and services charged higher, discriminatory prices in the same way McCurry proposes for buyers and sellers of "hog content" on the internet? How many duhs and hellos are due McCurry and his sponsors for this drivel?
Like internet content, the cost of gas, electricity, medicine and many other items is irrelevant to the many uses applied by consumers. That's what makes it neutral! Facility-based internet providers face costs of providing kilo-bytes and kilo-byte-seconds, just as electric providers face costs of providing kilowatts and kilowatt-hours.
Buyers and sellers of large content already pay for more kilo-bytes per second, just as SUV owners already pay for more gallons of gas per mile. Attempts to stiff SUV owners at the pump for higher prices would fail the laugh test as quick as tagging overweight customers at McDonalds with higher prices for an order of burger and fries.
But McCurry's job is to obscure the obvious.
Even the long-standing principle of volume discounts is mangled as part of the exa-flood myth. McCurry is effectively pricing 40 pounds of bulk potatoes at a "hog price" of say, $16, while charging $8 for an equivalent amount of four, 10-pound bags of potatoes priced at say, $2 each. It's volume discount pricing in reverse.
Just when he's cornered with the high-school math, McCurry removes the shell with the pea under it and demonstrates how he was talking about volume discounts all along - the kind one gets for purchasing the "Everything Package" from Cable TV. Not only does the internet customer get 40 pounds of potatoes for $4 like before. The "Everything Package" offers hundreds of potatoes in all varieties and volumes - dried, mashed, fried and fresh. Wow, what a deal, just like now.
Whether you want potatoes or not.
The "Everything Internet Package" will have what you have now, but at a bargain price of say, triple your current monthly internet bill. Want just the "Base Internet Package" at current prices?. That could get email with no attachments limited by incident count of 10 sends and receives per day, text only web pages absent all medical information and Wickipedia from letters A - L on Monday and Wednesday. Multimedia could be limited to still images of pay pornography and re-broadcasts of Clear Channel at 32 kilo-bytes per second on mono channel.
As Vinton Cerf of Google has stated, it's like a protection racket that charges you for what you already have. It's phony "added value" deployed through limited access used to reduce quality and raise price.
Think of any issue developed since 1990 and ask what happens when, for example, half the internet users are lopped off when they drop the "Everything Package". Awareness of climate change, immigration, Iraq, globalization and a thousand other issues will never be the same. All to grease a few monopoly dollars into the palms of some media thugs who claim competition and democracy is the equivalent of choice among 50 channels of the Home Shopping Network, 2 History Channels and 3 news networks that say the same thing all day long.
Speak and listen now, before you cannot speak or listen at all.
Barry Payne is a free-lance Economist, Ph.D., with 20 years of experience in regulation at the FCC, five state regulatory agencies in Florida, Minnesota, Illinois, North Dakota and as Assistant Professor at Ohio University. He can be contacted at firstname.lastname@example.org.