Net Neutrality Tweet

TL;DR: Net Neutrality Hysteria, Political Philanthropy Rising, And A New Bitcoin Order From Chaos?

Net Neutrality Hysteria, Political Philanthropy Rising, And A New Bitcoin Order From Chaos?

Net Neutrality Tweet

Here’s What You Need To Know…

Last week, the Federal Communications Commission (FCC) released the tentative agenda for its December meeting. This meeting will include the agency’s plan to rollback so-called “net neutrality” rules implemented in 2015, which imposed government regulation of Internet Service Providers (ISPs) like utilities. The announcement has set off a wave of hysteria and misinformation, in a move being described as a “victory” for big telecommunications companies and a damaging loss for consumers and supporters of a “free internet.”

Yet the noise surrounding net neutrality is not supported by the realities of what the FCC is proposing to do. Given that this would be the sixth change regarding this policy over the last ten years, it is appropriate to take a step back from the ledge to evaluate the issue on its merits. Here are the facts you need to navigate this issue:

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  • What Is Net Neutrality? The term is generally used to describe “the principle that individuals should be free to access all content and applications equally, regardless of the source, without Internet Service Providers discriminating against specific online services or websites.” However, the current kerfuffle is specifically focused on the 400-page set of rules implemented by the FCC under Chairman Tom Wheeler in 2015 that designated Internet providers as telecommunications utilities under Title II of the Communications Act of 1934 – a “heavy-handed” and clumsy approach to upholding the principle of a free and open internet.
  • Why Eliminate The FCC’s Net Neutrality Rules? In a Wall Street Journal op-ed, FCC Chairman Ajit Pai expressed his desire to see the internet return to the bipartisan framework of the Telecommunications Act of 1996, which called for an internet “unfettered by Federal or State regulation.” In addition, the current regulations have resulted in a 5.6% decrease in broadband network investment – the first time there has ever been a decline outside of a recession. When compounded with the increased cost for smaller ISPs to comply with the rules, as well as the delay of new services on account of uncertainty stemming from them, the unintended consequences of this policy may be harming consumers rather than helping them.
  • The Arguments Cited For Net Neutrality: Proponents of net neutrality are warning that ISPs like Verizon, Charter, Comcast, and others could decide to raise prices, block certain websites, and change the speed that users download certain content. In foreshadowing a doom and gloom scenario, reporters and legislators alike have cited Portugal – where a leading mobile phone provider bundles specific apps together and offers different prices depending on the amount of data used – as an example of what can happen “with no net neutrality,” but Portugal makes a poor example, as Portugal has active net neutrality regulations, as do all countries in the European Union.
  • The Effects Of Rollback On Innovation: A former chief economist at the FCC views deregulation positively, arguing the regulations are anti-competitive and stifle innovation and investment. To illustrate this point, the economist cites AOL’s creation of a mass market for computer networks in the 1990s and the invention of voice-over-internet in the mid-2000s, both innovations that transpired in the aftermath of deregulation.
  • Holding ISPs Accountable: A removal of net neutrality rules will bring things back to how they were prior to 2015. The Justice Department will have the authority to determine if any conduct is uncompetitive, and the Federal Trade Commission (FTC) will again police ISPs and protect consumers. Furthermore, an open, competitive market allows for the public to reward or punish ISPs depending on their actions by choosing who they do business with. Nearly 40% of Americans already have access to more than one broadband provider, and as phone companies expand their fiber options, satellite internet improves, and 4G LTE expands highspeed access to more consumers across the country, that figure will only increase. If an internet provider was a bad actor on net neutrality, it would only increase the incentives for others to compete in that market.
  • So Why Is This Issue So Controversial? Net neutrality has drawn the attention of celebrities, including Cher and actor Mark Ruffalo, who have weighed in on the matter, expressing concern about “less” Americans having internet access and the consolidation of information into “the hands of a few.” Yet Commissioner Pai noted recently that some tech companies are promoting misleading claims about the policy, which benefits them by ensuring they do not have to worry about how much bandwidth their content requires having a financial consequence for them or their consumers. Pai also noted that tech companies themselves are not pure when it comes to a free and open internet, citing recent actions by Twitter against a Republican Congresswoman and other voices the company did not agree with, an issue we raised in August as a potential regulatory issue for tech companies.

A vote to remove the net neutrality regulations will be held on December 14th. Keep these facts in mind when observing the debate over the next few weeks, and remember that despite the heated rhetoric, ending net neutrality is not the end of the world.

News You Can Use

POLITICAL PHILANTHROPY RISING

Philanthropy is booming in America, but some donors may be surprised to discover that their gift is going to political ends. While much has been made of the boon for the anti-Trump economy, traditional foundations and philanthropies are increasingly directing millions of dollars towards combatting the effects of Administration policies, which diverts funding from programs that directly help low-income families such as educational and social service institutions that run soup kitchens and shelters.

Wealthy philanthropists are also transferring millions of dollars to private charities that support political causes, thereby avoiding the need to pay taxes on that money. This represents the dawn of “weaponized philanthropy,” and if philanthropy is politics under a different guise, donors should ensure they know how their money will be used before donating in order to make sure it aligns with their goals.

IF YOU *CAN’T* MAKE IT HERE, WE’LL RAISE TAXES

The New York Times editorial board recently highlighted the proliferation of vacant storefronts in the city, asking whether the online shopping revolution or “greedy” landlords may be to blame. Included in the editorial are two proposed solutions to provide a “lifeline” for imperiled local businesses and their neighborhoods, both of which attempt to tax the city’s way out of this affliction.

One potential cause for the increase in vacant storefronts not mentioned in the editorial may be the $15 minimum wage that began taking effect in 2016 – an idea the Times endorsed. By acknowledging New York City’s increase in vacant storefronts without mentioning or reexamining its support of a $15 minimum wage, which makes it more expensive to operate retail establishments in the city, the Times is failing to provide a full picture of the situation that leads to the right policy prescriptions.

THE LEFT’S ATOMIC DILEMMA

Nuclear power offers cleaner, emission-free energy alternative to fossil fuels, and European countries have used nuclear power as a main component of their energy mix for some time, including up to 76% of France’s electricity generation. Yet in the U.S., where European solutions are often popular on the Left, increasing nuclear power faces ardent opposition from prominent environmental groups and influential Democratic political donors. Axios recently found this influence on full display when one of its reporters got tepid support for nuclear energy from Democratic policymakers attending a United Nations climate conference in Bonn, Germany, even as they look for ready alternatives to fossil fuels.

THE DIGITAL MEDIA BUBBLE

The decline of print media has been well-documented, with people instead visiting websites and news sources that reinforce their worldview – a phenomenon called “filter bubbles.” Yet the struggles facing digital media publications has one editor going so far as to say that there is a “digital media crash” that will result in more companies going out of business because of the lack of a sustainable revenue model.

So what does this mean for consumers and their filter bubbles? We may never know, because although platforms like Facebook and Google capture more advertising revenue than ever before, these companies are making changes to help publishers better monetize their content and potentially stave off this crash.

A NEW BITCOIN ORDER FROM CHAOS?

Over the course of a few days, the value of Bitcoin has shot up and fell down, eventually passing $11,000 per coin this month. That means the cryptocurrency is up more than 1,000% since the beginning of the year, but this growth has been nothing if not extremely volatile. Jeffrey Tucker at the Foundation for Economic Education argues this volatility is the result of Bitcoin’s success, rather than its failure as an alternative to other forms of currency.

Tucker views Bitcoin’s resilience, despite being denounced and scrutinized, as evidence that it is “the product of a dynamic and competitive marketplace,” with the power to disrupt “the systems that have monopolized world finance for the last one-hundred years.” Unless, of course, it is a fatally flawed and speculative currency whose crash will have widespread implications for many beyond just its users before national and international regulators find a way to control it.