Richard Epstein on Net Neutrality

Richard Epstein, a member of FSF's Board of Academic Advisors, is widely acknowledged to be one of the nation's foremost law and economics scholars. Among many other positions, he is Distinguished Service Professor of Law at the University of Chicago, where he has taught since 1972. His impressive bio is here. Please peruse it.

But more importantly for the moment, please consider carefully the last paragraph (reproduced below) from Professor Epstein's chapter in the Free State Foundation's new book, New Directions in Communications Policy, published by Carolina Academic Press. Richard's chapter is titled, "What Broadcast Licenses Tell Us About Net Neutrality: Cosmopolitan Broadcasting Corporation v FCC." In it, he shows -- brilliantly, as usual – what one piece of the FCC's history of broadcasting regulation teaches us about the perils of net neutrality regulation.

In his summary and conclusion, Professor Epstein explains that we ought to be able to distinguish between regulations that strengthen markets and those that undermine them, but that there is a long-standing pattern of government's failure to do so. The regulators' proclivities to overreach are often driven by a denigration of property rights and systems of voluntary exchange. So here is how he concludes his chapter:

"A similar pattern is at work in the modern debates over net neutrality. The defense of that position starts out as a plea to end discrimination. Yet there is little evidence that the new dose of regulation will produce any gains in the short run. In the long run, we can expect a repetition of the sorry performance of the FCC (or, for that matter, Congress) with respect to broadcast rights to work its way through the law of net neutrality. The sad truth is that the parties who seek to develop sophisticated and sensible schemes for state control quickly lose control over the administrative process to persons whose ambitions for state control are not bound by any fine-grained rationale. The dangers for this predictable drift usually suffice to err on the side of caution. Stated otherwise, the expected rate of depreciation of sound public norms that rely on administrative discretion is high. There are too many pressure points to keep the rascals at bay. So the recommendation here is to follow classical liberal principles that treat all state intervention as a mistake until it is shown to be a good. More practically, and much to the point of the current public policy debate: Keep private control over broadband pipes by abandoning the siren call for net neutrality."

Having in mind even a bit of regulatory history, it is difficult to put more concisely the case against net neutrality mandates that FCC Chairman Genachowski intends to have the FCC impose.

I wish those FCC commissioners considering new Internet regulation would stop for a moment and think about Professor Epstein's warning:

"The sad truth is that the parties who seek to develop sophisticated and sensible schemes for state control quickly lose control over the administrative process to persons whose ambitions for state control are not bound by any fine-grained rationale."