19.7.17

THE INFORMATION RAILWAY.

Warren "Coyote Blog" Meyer takes a page from the Cafe Hayek menu to deconstruct the idea of net neutrality.  It's a bit of a stretch, and he's getting a lot of discussion in the bull session.  But perhaps "information highway" isn't quite the right metaphor.

Here's how he starts.
Let's consider two cities we will call Gotham and Metropolis.   One day a private road builder proposes the first major highway between the two cities.  The citizens cheer, but the government places one caveat on them -- the builders must be neutral to all traffic.  Every entity (individuals, corporations, public agencies) should each pay the same fixed amount each year for use of the road and everyone should get equal access to the road, no matter how much they use it.
That's already simplicity itself, contrasted with the real story of private internal improvements, which started with turnpikes, themselves common carriers, but enjoying freedom to charge different prices, e.g. for horse and rider, or wagon and team, or pedestrians, and perhaps persons walking to church were not charged, and then came the shunpikes, those ways people could bypass the toll gates.  (The word dates to 1804, or long before the current higher rates the Illinois Tollway impose on big rigs induced the wreckage of Illinois 38 and U.S. 30 by latter-day shun-pikers.)  And perhaps the Interstate Highways are net-neutral when it comes to use, as opposed to paying for them.  That might have begun with the National Road, perhaps the first major publicly funded turnpike in the United States.

But neutrality with respect to access is not the same thing as neutrality with respect to use.  That herd of sheep being driven along the National Road uses a lot more, er, bandwith, than the itinerant pedlar or the dispatch rider.
This new road and the faster transportation it allows spawns a number of entrepreneurs who find new uses for the road.  In particular, two companies create new logistics services that cause at first dozens, then hundreds, and then thousands of their trucks to hit the road between the two cities.  Soon, more than half the vehicles on the road are from these two companies, and another 25% of the vehicles on the road are from perhaps a dozen smaller imitators.  But each of these companies, despite using orders of magnitude more of the road's capacity than any other individual, still pay the same flat $10 for access to all their vehicles.   These trucking companies continue to add new services -- such as high demand logistics (HD for short) -- that put more and more trucks on the highway. Traffic explodes.  It turns out that these trucking companies have ways to compress their loads into fewer trucks with little loss to their quality of service, but why bother?  They are not paying for the capacity they are using, so why conserve?

But the resulting congestion from these few companies' trucks is slowing everyone else down.  Congestion reigns.  Instead of blaming the trucking companies, everyone demands the road company add more capacity, which they do.  They spend huge amounts of money to accommodate the traffic from these few companies, but due to neutrality rules the costs get paid by everyone, and the annual fee goes up to $15, $20, then $25.  Finally, a few people begin to observe that their access fees have doubled and tripled all to support vehicles from just a few entities.  Proposals come forward:  Can't these trucks be limited to certain lanes to keep them out of the way of other traffic?  Can't they be limited at certain times of day?  Can't the road company charge them per vehicle, rather than a flat fee, so they pay their fair share of the expansion costs?  Can't the road company give them incentives to compress their loads into fewer trucks?  Can't the trucking companies make a contribution to the capital fund to expand the road?

But nothing happens, because of road neutrality.  The trucking companies repeatedly shout "road neutrality" and conduct a successful campaign to convince everyone else that road neutrality is really in their interest.
It's in there that the analogy between road and broadband capacity breaks down, if I understand the comments correctly.  On the other hand, it's a pitch-perfect description of the rent-seeking behavior engaged in by the motor lobby, which has been living at the expense of everyone else for a long time.

Fortunately, in transportation, there are high-volume rights-of-way dedicated to moving large shipments.  We call them railroads.  And our political masters appear to lack the imagination to consider broadband versions of railroads, the way they are being compelled to consider actual railroads as net-neutrality on the government's roads comes apart.

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