Why The Internet Should Be A Public Utility

Perhaps by now you’ve heard that the FCC in the US is planning to “roll back net neutrality”, that is, to give telecomms companies the right to charge you for visiting different websites. So think: $4.99 for Netflix, $5.99 for the news bundle, $9.99 for the sports package, $12.99 for the Platinum Social Media Experience Including Facebook and Twitter, and so on — on top of what you already pay. Sound crazy?

Let’s think about it all for a second.

You are going to pay more for what you already consume. So by definition, no real value is being created in this exchange — it is only what economists call rent-seeking, a transfer of value from you, to telecomms companies. Now, companies use their profits these days for two things, mostly: share buybacks, and CEO compensation. So the “rollback of net neutrality” is a long-winded way to say money leaves the pocket of the average American, to go to hedge funds and CEOs. Thus, inequality grows, dissatisfaction rises, and America is even less able to afford what it needs: education, healthcare, transport, and so on.

(And of course, all the while, whomever chooses what media people can enjoy in those packages and bundles will also be able to corrode democracy and civil rights from the top down, blocking freedom of speech a fundamental way, for example, not offering your favourite publication, artworks, websites, books at all, censoring them without anyone really knowing, for being too radical or too controversial or just too true, and favouring those with whatever views advance their personal motives and pursuits and profits. This is a genuine shift to kleptocracy, in which oligarchs control not just economics but societies using them as magic bags of endless cash to loot.)

But that’s only really the beginning. The way that American economics and law looks at regulation, and hence utilities, is simple — too simple. If something lowers prices, it’s a good thing. And so the argument against net neutrality is ultimately that somehow internet bills will come down. Of course, they won’t, because there is no real competition in the marketplace — so how could they? Monopolies don’t lower prices: they raise them.

Now. Where does this approach — lower prices leading to the greater good — leave America? Well, it leaves it unable to provide utilities well, or genuinely, really, at all. Lower prices are always thought to be provided by competition, hence, instead of utilities being things are provided by a working social contract to everyone, they are deregulated. The invisible hand, it is hoped, will provide them. The problem is that utilities are all natural monopolies: it’s always cheaper for there to be one energy or water or news provider than for a dozen, because laying those lines and pipes costs money. And precisely the same is true for the net: market competition cannot lead to lower prices, because the internet is a natural monopoly, hence, you have at most two choices of providers in most markets, if that. The invisible hand becomes a fist.

The result is that Americans don’t really enjoy utilities in the same way as the rest of the world at all: they are fleeced for the basics, by natural monopolies, who never lower prices, only raise them — and eviscerate the quality of what they are supposed to provide. Flint has no clean water. Puerto Rico has no power. California was sent into crisis by manipulated energy “markets”, which weren’t markets at all. America has no BBC or National Health Service, again because “competition will lower prices” — only there is no competition, and prices only rise, while quality falls. The invisible fist punches Americans over and over again, where it hurts most: for the most basic goods of life.

When we say “basic goods”, what do we mean? We mean the things that elevate our quality of life to the highest degree. Without water, power, sanitation, libraries, parks, and so on, the rest of your life would quickly take a nosedive. They get you eighty percent of the way to happiness — and the other twenty percent, to be honest, whether it’s iPhones or designer handbags, is almost irrelevant: we all have different preferences for those, but we don’t have different preferences for utilities — the utility we derive from them is precisely the same. The basic good in our lives, that which makes love and courage and wisdom and truth possible at all. The luxuries are only there to satisfy our appetites — utilities are there to allow us to live genuinely well.


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