Google and Motorola and Why Do We Need Net Neutrality Regulations?

by Mike Wendy on August 16, 2011

The wireless loophole in the FCC’s Net Neutrality regulations probably played some role in Google’s acquisition plans announced today for Motorola.  With fewer rules on the wireless broadband side, the regulations make wireless broadband more attractive to provide vis-à-vis other modes of broadband transmission.

Because Google’s Android is the top smartphone OS, the FCC’s rules roughly translate into more sales for Google.  Having Motorola – which makes popular versions of the Android phones – should only add to that.

Should the loophole be closed?

No.

Rather, the entire Net Neutrality regulation should be thrown out.

The rule was never needed in the first instance – the market works pretty darned well.  And that’s because hardcore regulation is absent…until now.  The distortion in the new rule, however, encourages the placement of resources based not on economics, but instead on how the rule was gamed to competitive advantage.

Through lobbying instead of the marketplace.

Maybe wireless broadband is where we’re going.  Alright.  If so, then why need to have the loophole in the first place?  Why give added impetus to a proven path?

Of course, if the market isn’t headed in that direction, for whatever reason(s), companies like Google – as well as third parties in the ecosystem following Google – will have been incentivized into the wasteful allocation of their resources.

The public interest suffers as a result, too.

Google’s acquisition may well turn out OK for them and consumers.  One should hope.  The point here is that in an otherwise healthy market (which the Internet is) economic motivations, properly shorn of regulatory underbrush, tend to lead to more sustainable, flexible and politically in-corruptible growth.

Don’t we want that?

Serving the public interest can be achieved in a lot of ways.  It may shock many in Washington, but it can be done without a bureaucrat involved.  Over the past 10 years, we’ve seen the Internet explode for this very reason.

Like recent (yet unheeded) calls to flatten and broaden the tax code, removing needless distortions and subsidies – well, the same should happen in communications markets, especially where they are not “broken.”

Net Neutrality is a solution to a made-up problem.  Hasn’t America been hurt enough by these same “well-intentioned” policy “solutions”?

 

 

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