Taxi! -- How Net Neutrality Imitates New York Cabs

Of course, the guys mainly responsible for giving you Internet service don’t put the matter quite that way. Instead, they like to talk about what they get to do with *their* property and investment — the same way you’d talk about your roof or driveway or your storefront business, maybe — and they like to characterize net neutrality advocates as some kind of freeloaders.

Take Ed Whitacre, CEO of the phone company SBC, for example: “Now what [the Internet companies] would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes? The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!”

Leave aside the question of whether Google or Yahoo! or Vonage is using SBC’s Internet services for free (here’s a hint: they’re paying millions for the privilege). Let’s ask instead what happens when a carrier decides he wants to be able to pick whose traffic he carries, where it goes, and what price he charges.

For me, the helpful metaphor is to think about taxicabs in the Big Apple. Anyone who has frequently used taxicabs in New York City is aware that there are some kinds of tiered pricing in some of these services. For example, fares during peak commuting hours may be higher, and there may particular charges associated with using toll bridges and tunnels. But one can imagine what riding in taxicabs might be like if taxicab operators had freedom to discriminate based on where a passenger was going or what he or she planned to do after getting there. Taxicab companies might be tempted under such a circumstances to cut special deals — to provide better rates and/or service to someone traveling to Radio City Music Hall rather than to the Museum of Modern Art simply because the former had a commercial partnership with the taxicab company.

In this thought experiment, it is certain that a rational market in taxicab services would arise, but it is unclear that it would be market that would serve the public’s needs as well as the (somewhat) more regulated market that exists does. (Nor is it clear that one could always point to competition in this market — other taxicab companies, the subway system, livery drivers — as a fix for any distortions this kind of deal-making might result in. After all, those competitors might well be tempted to cut the same deals.)

It’s true, of course, that in the real world taxicabs in New York City are regulated, and perhaps more than they should be. We can argue about what the best taxicab regulations should look like, but most of us will agree that some baseline of … well, let’s call it “taxi neutrality” for lack of a better term … is a good idea.

And this shared idea about “neutral” carriers has been at the heart of how the telephone and mail systems have worked in this country for many, many years. It’s also central to how the Internet has been designed, to how it has functioned, and to how fast it has grown. Is there a way to balance the “pipe” owners’ property rights and the public benefits of having “net neutrality”? There almost certainly is, but we won’t reach that balance until the pipe owners take the shouting down a notch.

Currently a research fellow at Yale University, Mike Godwin once wrote something called “Godwin’s Law.” It was his shortest, but not his only, bit of writing. His book Cyber Rights: Defending Free Speech in the Digital Age is the definitive work on the subject. He has also written for Whole Earth Review, Quill, Index on Censorship, Internet World, WIRED & HotWired, and Playboy. He has been senior editor of E-Commerce Law Weekly, and chief correspondent of IP Worldwide. Most recently, he has been a senior policy fellow at the Center for Democracy and Technology, and he is a contributing editor at Reason.He was the first staff counsel for the Electronic Frontier Foundation.

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