Net neutrality (remember that?)

I didn’t hear about this story when it happened:

AT&T delivered less than [Pearl Jam]’s full performance during its Lollapalooza webcast. The powerhouse telco turned off the audio during the song “Daughter” while singer Eddie Vedder was railing against President George Bush.

Now, I swear I wrote a post a while back opposing Net Neutrality on free market principles. I can’t seem to find that post, now. But the basic idea was that if the industry thinks it needs to provide different services for different customers, I didn’t see why Congress should get in its way. Obviously, more services, meant more choice, more innovation and happier web users. Right!?

Well, the Peal Jam incident or, as Lessig puts it, The Jamming the Pearl incident makes me think twice. If the telco market was competitive at the local level, if consumers got to choose between services and vote with their feet when they saw something better or needed to leave a particularly bad service, Net Neutrality would be a no-go. But we don’t live in that world and maybe this additional regulation would improve efficiency.

Now, I could argue that in the best possible world, telcos would be unregulated, unleashing competition and all its virtues. Instead of instituting yet another regulation, we could do away with them all.

But I realize, given the vested interests, this perfect world is politically unfeasible. So, bowing to political realities, I’m forced to support more regulation instead of none, right?

If so, am I a “second best” economist? Or should I, in my capacity of an economist, inform people about the most efficient outcome (i.e. no regulation, more competition)*, in which case, be a “first best” economist and, in my capacity as a pragmatist, lobby my Congress people to support Net Neutrality, in which case, be a “second best” voter?

Are economists pragmatists when giving policy advice or idealists? If its the former, do we have any special ability or training to analyze and give advice about political realities?

*Assuming the IO folks are with me on this one.

2 thoughts on “Net neutrality (remember that?)”

  1. Why aren’t they competitive at the local level?

    Government uses its regulatory power to help a company establish a monopoly/duopoly in a market. Company uses lobbying power to persuade government to strengthen and reinforce monopoly/duopoly.

    Are governments or companies the bad guys here? Are they even different agents?

    Side topic- the market for cell phones in this country seems fairly competitive. Lots of players in the market, lots of consumer choice in phones and carriers, little regulation. Why, then, is cell service expensive and awful compared to offerings in Asia, South America, and Europe?

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