Enjoying the work of Wall Street Journal writer Holman W. Jenkins Jr. can make you feel cynical. But when you apply it to the hyper-regulatory instincts of the political class, you can rarely go wrong in embracing that mindset. So Jenkins is really in his element writing about the latest Obama brainstorm, which is to use the FCC to impose "net neutrality" rules on an Internet that's doing quite well without any political interference.
Broadband is among the most popular, fast-growing, profitable products any business sells. Why would companies that sell it provoke fights with customers and regulators by behaving in ways that deprive customers of what is by now everyone’s clear and settled expectations of how the product should behave?
They wouldn’t. Ludicrously phrased was a New York Times report on Monday that commended Mr. Obama for putting the “full weight of his administration behind an open and free Internet, calling for a strict policy of so-called net neutrality and formally opposing deals in which content providers like Netflix would pay huge sums to broadband companies for faster access to their customers.”
What Netflix paid to Comcast was a fraction of the cost Netflix avoided when it stopped delivering its service through a third-party carrier in favor of a direct connection to Comcast.
That’s all that happened in this misconstrued episode, the routine distortion of which has become a sad commentary on the intelligence and intellectual honesty of the media.
So why is Mr. Obama promoting strict regulation? Because liberal mau-mau groups like regulation. It’s that simple: If government controls business and they control government—well, you get the idea.
The needs of the liberal machine are being met, the full-time retinue of fixers, lobbyists and activists who extract rents by controlling things.
The Netflix/Comcast example is one of those that most animates the left and drives it's demand for goverment-imposed "net neutrality," and it's a great example of how the anti-market instincts of the left lead to irrational rules we all get stuck having to live with.
Netflix paying Comcast for direct access made sense for both parties, as well as for Netflix users, who get more reliable performance as part of the deal. The fact that Netflix had the capital and was willing to spend it on access that others can't afford is not some sort of social injustice, nor even an economic one. It's simply what happens when one party earns resources and chooses where to invest them. It doesn't make the Internet less "free" that content providers and access providers are able to make their own agreements with each other. It simply makes it a capitalist entity, and it's grown quite nicely and performed quite well in that form.
But that's what really bothers the political class, isn't it? They don't see a resource that's thriving and serving its users. They see an out-of-control monster, by which I mean, they can't control it. They can't make the rules and then curry favor with disparate interest groups who vie for favor from the rulemakers - an effort heavily steeped, of course, in the generous doling out of campaign contributions to said rulemakers.
Politicians don't like things that operate largely independent of the political process for the simple reason that it robs them of potential constituencies.
By the way, it's not for no reason that already-dominant players like Google love the idea of net neutrality. They've already got theirs, and net neutrality precludes the possibility that potential competitors can use their economic power to make a play for some of their market share. It's a classic case of what happens when one player grows and becomes dominant, then feels it has nowhere to go but down so starts looking to politicians to protect its lofty status.
Consumers certainly don't win if, as Jenkins says here, the FCC takes Obama's cue and applies an 80-year-old law to solve no known problem - save for the one that sees politicians and regulators helpless to manipulate a free and thriving entity. The winners, rather, will be the most politically connected companies and advocacy groups. That's who always wins when Washington observes something going on out there that is working quite well without its involvement, and doesn't like it one bit.
