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Network Neutrality Dealt a Heavy Blow

January 15th, 2014

The D.C. circuit Court of Appeals issued a decision today to essentially give Telecoms sweeping powers to manipulate Internet access, control content, and do their worst to make the Internet more expensive and snarled.

Telecoms can now freely block content as they please. If there is a competitor to their own services or services provided by an affiliate, they can throttle or block them; if there’s an app they don’t like, they can cripple its traffic.

Consumer advocacy group Free Press lamented the ruling. “We’re disappointed that the court came to this conclusion,” Free Press CEO Craig Aaron said in a written statement. “Its ruling means that Internet users will be pitted against the biggest phone and cable companies—and in the absence of any oversight, these companies can now block and discriminate against their customers’ communications at will.”

More importantly, they can now charge whatever fees they wish for faster speeds. Netflix or Amazon wants to stream video? Well, they better pay huge wads of cash to the Telecoms if they want their current speeds to continue. Verizon, Comcast, and AT&T can now decimate their businesses unless they pay the Telecoms whatever the market will bear.

Which means that you, the consumer, will be paying more and more in the long run, because those fees will without any doubt whatsoever be passed on to you. The Internet just got a whole lot more expensive—and the Telecoms, already gorged with profits, will be swallowing all of that up.

Now, remember for the past several years how the Telecoms have been whining about how that excess revenue is absolutely vital to fund rollouts of faster fiber service nationwide? Well, they said that when they got permission to raise fees years ago, and they lied then—there is almost no doubt that they are lying again now:

In the U.S., there’s no practical competition. The vast majority of households essentially have a single broadband option, their local cable provider. Verizon and AT&T provide Internet service, too, but for most customers they’re slower than the cable service. Some neighborhoods get telephone fiber services, but Verizon and AT&T have ceased the rollout of their FiOs and U-verse services–if you don’t have it now, you’re not getting it.

Meaning that, despite years of promising that they would give us all bright, new, shiny bandwidth in exchange for today’s ruling, we will get only what profits them the most and not on baud more.

Expect the Internet to get less efficient and more expensive. I hope I am wrong, but we’re talking about a newly-unfettered corporate will now able to do almost whatever they want in a market ripe for exploitation. It seems impossibly naive to expect anything but a worse consumer experience.

  1. Troy
    January 17th, 2014 at 02:16 | #1

    I was going to blame this on Bush, but apparently the 3 judge panel had 2 Clinton judges.

    But your post from the past:

    Looks Like Bush Bought Off TIME Magazine Too

    about SS privatization was a scary reminder of where we were last decade.

    My own counterpoints alongside yours (which were excellent)

    each generation of workers pays for the retirees ahead of it.

    Saving is notionally ALWAYS one generation supporting the next. Since we cannot put aside actual food and other goods to consume in our retirement, it has to be abstracted with money and investment vehicles, which are just scorecards as to how workers CURRENT productivity gets allocated.

    Wall Street would love to take out SS’s independence, to get another $800B+/yr flow into its 5%+ skim operation.

    SS avoids the skim by calibrating retiree payouts based on the current wage base. Price inflation is actually an artifact of wage inflation, without wage inflation the total price level cannot rise, only reallocation (consumers buying cheaper stuff) or bargaining (consumers insisting on getting the profits lowered) can occur.

    So it’s a conceptually sound construction, assuming the US doesn’t have a population decline like Japan and GDP remains rising or at least does not fall.

    Benefit cuts will probably be necessary to keep Social Security solvent as the number of retirees grows.

    First off, we have a $2.7T surplus in the system, this was excessive FICA pay-ins by the working public, 1989-2010. This needs to be spent down (or at least scheduled to be spent down smoothly) to its statutory minimum (~$1T next decade) before any talk of cutting benefits is made.

    And if you’re a Georgist like me, you’ll think raising FICA taxes is immensely superior approach since we argue ‘All Taxes Come Out of Rents’.


    shows that since 2005 rents have risen at least 25%! That is a tax on workers just as hard to pay as payroll taxes!

    And we Georgists say if we had raised payroll taxes 25% over 8 years, we wouldn’t have had that rent rise!

    You said: “There ain’t no such thing as a free lunch” but Georgists argue there is — if we make the Landlords pay!

  2. kensensei
    January 18th, 2014 at 16:19 | #2

    An excellent post, Luis.
    Thank you for bringing this to our attention.


  3. Troy
    January 30th, 2014 at 03:42 | #3

    in other news, here in CA it’s going to be 73 today.

    Cherry trees in my nabe are starting to bloom and it’s still January.

    This is not AGW per se, just a seemingly-permanent (it’s apparently been here for over a year) ‘high pressure ridge’ diverting the storm track into Canada.

    Last winter was also warm and very dry.

    I remember the mid-70s drought, if we don’t get a lot of rain before summer we’re going to be totally, totally boned, with economic damage to the valley on the order of the WTC attack to NYC, if not worse.

    To put things in perspective, Fresno County’s ag output is almost $7B. That’s over 5M ounces of gold at current prices, under 3 years to equal the total output of Calfornia’s “Mother Lode” and about the value of South Africa’s current gold production.

    Losing 10%+ of that is going to hurt.

  4. Troy
    February 2nd, 2014 at 15:10 | #4



    on the R base voting for Romney . . .

    turns out the held their nose and voted against Obama I guess.


    shows white evangelicals were 26% of the electorate and voted for Romney at 78% (higher than his Mormon support, believe it or not).

    Right up there with billionaires and orthodox Jews, traditionally very strong R supporters of course.

    Half the electorate wanted PPACA “repealed”, and they came in at 83% for Romney.

    ~1/3 the electorate is anti-choice, and they voted 77% for Romney.


    shows in 2004 the white evangelical vote was 23%, and they voted for Bush @ that same 78%.

    So they were 10% stronger in 2012!

    Gotta get out of this nuthatch . . .

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