Right On: Neutralize Facebook and Google, not the internet

February 28, 2018 Utah Channel 3

OPINION — In the Steven Spielberg movie “Minority Report,” psychic “precogs” had foreknowledge of crimes that would be committed in the future. The guilty were arrested before they could commit those crimes.

These days, leftist precogs have foreseen crimes that will be committed by evil internet service providers, favoring some content over others. The left’s unfailing faith in the heavy hand of government control coupled with its pathological distrust of private business convinced progressives that ISPs are out to restrict public internet access.

Their solution: net neutrality, the principle that internet service providers should enable access to all content and applications regardless of the source and without favoring or blocking particular products or websites.

The left foresees internet “fast lanes” providing “paid prioritization.” In fact, actual fast lanes per se are a leftist stalking horse: no ISP is interested in providing them, in part because they are impractical to engineer.

But paid prioritization is real even though not accomplished with ISP fast lanes. Content delivery networks offered by companies like Amazon Web Services and Akamai locate servers around the world, putting content close to internet users. CDNs provide paid prioritization for content providers who can afford the expense. Netflix, accounting for 37 percent of all internet traffic, partnered directly with ISPs to create its own private CDN.

So should government enforce neutrality by preventing content providers from using CDNs? Should the government prevent FedEx from offering overnight delivery at a higher price than two-day service?

If web pages don’t load fast enough for you, blame the source, not your ISP. The website you’re visiting right now was assembled in real time from a number of servers in different locations providing images, ads, videos and text.

Still looking for justification to control the internet, lefties turned to wireless service providers who offered zero-rating. That’s the practice of offering certain streaming services without data caps or usage fees as an inducement to new customers.

Net neutrality advocates were aghast that a wireless company would offer this inducement using a specific streaming provider with whom it had negotiated a deal to the exclusion of others. But before a regulation could be crafted, all major wireless carriers responded to the competitive threat by offering unlimited streaming plans.

Curses, the wannabe regulators were foiled again.

Why would anyone in their right mind want to heavily regulate a dynamic and entrepreneurial industry making huge investments with private capital while lowering consumer prices?

Ask the Obama administration. Ignoring its own studies, it refused to find the wireless market competitive, keeping alive its intention to regulate.

Wireless providers compete ferociously to attract other providers’ customers while keeping their own. Wireless prices have dropped over 25 percent in the last decade while services have improved.

Providers spend upwards of $25 billion per year in capital improvements. They rolled out 4G networks covering 98.5 percent of the population in just 3 1/2 years.

5G is next. Consulting firm Accenture estimates the industry will spend $275 billion over the next seven years to build a world-leading 5G network. It estimates that up to 3 million new jobs will be created and annual economic output will be increased by $500 billion.

Best of all, local internet service oligopolies will be overturned. Almost everyone will have multiple, high speed wireless ISP options as alternatives to existing landline ISPs.

Net neutrality advocates should instead focus their attention on Facebook and Google. These tech giants have come under scrutiny recently for self-serving, anti-competitive practices.

Facebook enjoys what is called the “network effect.” If you have a Facebook account, it’s likely because your family and friends have one. Interacting with them is far easier when all use the same social network.

Likewise, you probably use Google search. Its breadth and familiarity created the verb “to google.” Full disclosure: I happily use Microsoft’s Bing.

Both Facebook and Google have been accused of using their near-monopoly status to drive users to other parts of their businesses.

Facebook became the world’s largest photo-sharing site through its purchase of Instagram in 2012 and the largest instant-messaging provider through its purchase of WhatsApp in 2014.

Facebook copies what it doesn’t acquire. Snapchat, a fast-disappearing photo and video sharing app, was expected to become a challenger to Facebook. But in 2016, Facebook introduced its own Snapchat-like Instagram feature that as of last year had more users and advertisers than Snapchat.

Google’s near-monopoly means some goods and services that its competitors offer are buried in search results. For example, Yelp claims Google altered its search methods to hide Yelp while helping its own competing service.

The U. S Federal Trade Commission declined to sanction Google in 2013, saying its actions serve consumers well. Last year, the European Commission fined Google $2.7 billion.

Who got it right? Time will tell.

The Facebook and Google duopoly threatens another dimension of online business. News organizations complain that a wildly disproportionate share of advertising dollars flow to the two companies, not to the reporters and publishers who produce it.

Facebook and Google have a near-stranglehold on online advertising. CNBC reports that the two companies accounted for 73 percent of all U.S. digital advertising in the second quarter of 2017, up from 63 percent in the second quarter of 2015, swallowing up 83 percent of the growth.

To this observer, the near-monopolies enjoyed by Facebook and Google seem far more vulnerable to government intervention than do ISPs and wireless providers. Liberals, are you ready to turn against two of your Silicon Valley darlings?

Howard Sierer is an opinion columnist for St. George News. The opinions stated in this article are his own and may not be representative of St. George News.

Email: hsierer@stgeorgeutah.com

Twitter: @STGnews