Muddling through on net neutrality

If nothing else, the roiling debate over the FCC’s proposed new net neutrality rules has brought to the fore just how sui generis the internet is in American life.

It has become an enormously powerful platform for entrepreneurship and investment in its own right while ever-more sectors of the economy, from manufacturing to energy to retail, become critically dependent on internet access and connectivity. Yet no one owns the internet. Its basic protocols are no one’s intellectual property. No one is even directly responsible for it in the way that governments are responsible for other types of public infrastructure, like roads and bridges.

The internet is not, in and of itself, a profit-seeking venture or enterprise. On the contrary, it was intentionally designed, by academics and engineers, on principles of maximum openness and non-exclusion — more or less the opposite of traditional principles of property rights, where the right to exclude is the sine qua non — and its most characteristic habits, like settlement-free peering, reflect that heritage. Its constituent parts may be privately owned networks, but their value as “internet” assets derives largely from their compatibility with the internet’s open, non-exclusionary traditions and protocols.

We don’t have many institutions like that in our hyper-capitalized and commoditized culture, and the effort to integrate it with more familiar institutions, like traditional government and economic regulatory systems, is giving us fits.

As I discussed (at obnoxious length) in my last post, the internet is, in its design and operation, the closest thing we have in our economy to a classic commons. Its heritage of distributed, multi-stakeholder management is responsible for keeping it an open platform up to now, which has allowed entrepreneurship to blossom. As happened with many traditional agrarian commons, however, particularly in the West, the internet today is seeing an accelerating trend toward partition and enclosure in multiple realms.

It’s happening at the geopolitical level, as national governments seek to enclosure their domestic internet from the global commons. And it’s happening at the local level, as ISPs seek to extract rents by enclosing and partitioning the last mile.

Much of the passion aroused by the net neutrality debate can be attributed to (an often inchoate) rage at the disenfranchisement of other stakeholders that comes with enclosure, more than to coherent objections to particular provisions in the new rules. From a practical regulatory perspective, for instance, as FCC chairman Tom Wheeler has repeatedly stressed, the change in the language from the old, no “unreasonable discrimination” standard to permitting discrimination only where “commercially reasonable,” will have little real-world impact on what will be permitted and what will not. But it clangs in the ear because the notion that the private, commercial considerations of ISPs should be dispositive is anathema to the multi-stakeholder gestalt people have internalized about the internet.

Similarly, much of the uproar over SOPA (another thrust at enclosure) stemmed from the fact that it appeared to monkey with the DNS system, practically the archetype for non-proprietary, multi-stakeholder management.

As Wheeler has also emphasized, however, there currently are no legally enforceable rules to prevent further enclosure of the internet by commercial interests. And speed is of the essence.

The best way to preserve what most people seem to mean by “net neutrality” is to protect as much as possible the contours of the internet commons. Simply working backwards from distrust of Comcast and Verizon, however, is not necessarily to best course by which to get there.

That’s why I remain dubious of reclassification of broadband as a Title II common carrier. That might stop Comcast from extracting rents from Netflix. But converting the internet into a regulated public utility is not going to restore the commons. It’s simply a change in landlords.

Alas for net neutrality supporters (and chairman Wheeler), there are no readily available regulatory tools for restoring or protecting the commons because we haven’t really had to tackle that problem before so those tools were never developed.

Now would probably be a good time to start working on developing some. But in the meantime, Wheeler’s I’ll-know-it-when-I-see it plan to muddle through on a case-by-case basis might do the least amount of harm.