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Harvard’s Yochai Benkler on Net Neutrality and Innovation

I’ve posted recently about Net Neutrality–see Net Neutrality Developments and A Libertarian Take on Net Neutrality. There’s an interesting discussion about this and related issues on the EconTalk podcast, between host Russ Roberts and Yochai Benkler of Harvard. Benkler really knows his stuff and it comes thru in this fascinating and informative discussion. As he explains, there is a debate about whether to impose “open access” as well as “net neutrality” regulations on the Internet-related companies. Open access means the state treats the physical communications infrastructure–fiber optic cables and so forth–that carry data signals for internet, cable TV, telephone communications, as a sort of regulated utility. Thus, it forces the owners of the physical “pipes” to sell capacity to competitors at regulated rates. This means the consumer can buy internet service from companies other than the owners of the physical networks. Net neutrality means that whoever whoever sells the service (whether it’s the fiber owner or some company that the fiber owner has to allow to use its networks to offer competing service) can’t discriminate between types of data packets, and can’t impose tiered pricing.

Now, as noted, Benkler knows his stuff, but he is clearly one of these mainstream interventionist types, talking about how “we” (the state) needs to intervene in the market to optimize outcomes, etc. etc. He is in favor of imposing open access, for example. As the podcast summary notes, “Benkler argues in favor of net neutrality and government support of broadband access.” The free market host, Russ Roberts (of Keynes-Hayek rap fame), is very diplomatic but pushes back one some of Benkler’s pro-regulatory assumptions (listen around 29:06-, 30:12-, 41:20-, where he makes the free-market case and argues against the pro-regulatory assumptions), but gets Benkler to admit explicitly that he favors the state intervening and forcing companies to use their property in certain ways (around 29:55-, ). Benkler’s paternalistic, state-trusting approach even carries through when it comes to the iPad and similar “closed” or proprietary products like the iPad (47:30-). As the summary notes, “He is skeptical of the virtues of new technology (such as the iPad) fearing that they will lead to less innovation.” He worries that consumers might like the iPad because it’s got a fantastic interface etc., but that this might be at the cost of the long-term value of “a more innovative platform” (open source) (49:50-). The typical omniscient planner mentality: there is market failure, and the state is needed to fix and tweak things, when the consumers get it wrong. Russ Roberts (48:10-) rightly interjects that all these products are great; he praises the first and second generation kindles; the progress of technology; the iPad; the diversity; the competition; Apple’s products; open-source; the Sony e-readers; the dynamism of the market.

Update: Peter Klein has some insightful comments on and criticisms of some of Benkler’s views in this review.

[Mises]

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