Monday, November 29, 2010

Who Thinks the Post Office Is a Model for the Internet?

Net neutrality proponents, especially the most rabid, sometimes point to the U.S. Postal Service as a model for what the Internet should be.

So it was not entirely surprising, but nevertheless still disheartening, to see the recent statement from Tim Wu linking the Internet to the Post Office. In a November 24 New York Times article concerning Netflix's rapid rise as a humongous streamer of video on the Net, Wu stated:

“Netflix used an open-source network, the U.S. Postal Service, to launch an alternative distribution business without asking anyone for permission,” said Tim Wu, a Columbia University law professor and author of “The Master Switch: The Rise and Fall of Information Empires.” “Now they are using another open-source network, the Internet, to transform the business. It is much easier for Netflix to change, because they don’t have to undergo a kind of religious conversion like media companies will have to.”

Tim Wu, along with avowed Socialist professor Robert McChesney, is the intellectual godfather of the net neutrality movement. Wu is chair of the board of directors of Free Press, the most vociferous of the net neuters, and McChesney is the organization's co-founder.

Without in any way diminishing Ben Franklin's vision or achievement in establishing the early U.S. postal system, or the role the Post Office has played in the country's social and economic development, the suggestion, either explicit or implicit, that the U. S. Postal System ought to be a model for the way the Internet should be governed or regulated is extremely dubious.

While Professor McChesney has stated explicitly that the Internet should not remain private property, but rather a public utility closely controlled by the government, I suspect a very large majority of Americans do not want the Net to be converted, either all at once, or gradually through creeping regulation, into a government-run agency like the U. S Postal Service. Consider that the Postal Service lost $8.5 billion dollars in fiscal 2010, and it projects losses in the billions as far as the eye can see – despite continuing extensive cutbacks in service. With the Postal Service borrowing billions from the U. S. Treasury to fund its deficits, the Government Accountability Office has said the Post Office's business model is "not viable."

Contrast these ongoing billion dollar losses with over $250 billion in private investment over the past several years by Internet providers - Time Warner Cable, Verizon, Comcast, AT&T, and others - to build out and continually upgrade their broadband Internet networks.

While mail service is being curtailed in various ways, even as the Postal Service runs up huge Treasury debts subsidizing its losses, Internet service and speeds continue to improve. A recent survey by Democratic pollster Peter Hart indicated that 75% of Americans say the Internet is working well. And although the FCC strangely seemed embarrassed by the good news, its own recent survey showed that 91% of Americans are either very or somewhat satisfied with the speed of their home Internet service.

Again, without denigrating the Post Office's past achievements, there is little reason to think that Americans are inclined to want to remake the Internet in the Post Office's image as a government-controlled entity. Nor should they be. Indeed, I suspect American consumers are much more likely to believe the U.S. Postal Service would run a lot better if it had the freedom and flexibility to manage the system that – absent adoption of the proposed net neutrality restrictions – private Internet providers presently have.

It continues to baffle me why, with no sign of any present market failure or consumer harm, the FCC persists in wanting to take a real American success story and risk going postal.