Thom talks to John Lott and then riffs about net neutrality, 21 October 2009

Thom Hartmann: Net neutrality. I want to get into this whole issue of the Internet. And throughout the day, of course, we'll be covering a lot of other news as well.

But here’s, in a nutshell, the issue. If I never used the police department at all; I never had to call them to my house, I never get mugged, whatever. I never need the fire department. I still pay a fixed amount. If somebody else uses the police department a lot, they pay the same amount as me, or whatever their taxes are, the same amount. If I take a hundred books out of the library a year, or if I take one book out of the library, I pay the same. It’s paid for by my taxes. These are considered parts of the common. The newspaper, excuse me, the library, the fire department, the police department.

Now, there’s another model, and this is basically how the Internet is run, is regardless of how big you are, as a company, or as a consumer, basically, there’s one price for access to the Internet, and the speed by which data flows through it is the same.

Another model would be the electric company, for example. The electric company says. 'ok, you want super industrial electricity, you’re going to have to pay more for the wires coming into your house, and by the way, we’re going to charge you based on how much you use'. So, you know, these two variables.

And the debate right now about net neutrality, is whether we’re going to go with the police / fire / library model, or whether we’re going to go with the water/electric model, broadly speaking, I think. I’m on the side of the police / fire / library, what’s called net neutrality, that the companies in the middle can’t say, 'you know, we’re going to slow your website down because we made a deal with Disney. They’re slipping us an extra ten million bucks, and we’re going to make their website faster than everybody else's'. And I just don’t think that’s a good idea. I think that the Internet is part of our intellectual commons.

John Lott, who has a Ph.D. in Economics, the author of several books, including “Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't”. His website, Dr. John Lott is with us to take the other side. John, welcome to the show.

John Lott: Good to talk to you.

Thom Hartmann: Good talking with you. What’s wrong with treating the Internet as an intellectual commons, particularly now that more and more people are getting their news from the Internet, rather than newspapers, and even radio and television? What’s wrong with treating it as an intellectual commons, and dealing with it the same way that we deal with fire, police and library services? That is to say, one basic price, one basic size fits all. Outside of industrial usage.

John Lott: Well, right, sure, well. One of the big issues with the pricing is that it’s like a highway. If I go onto the highway,'m just taking into account the time that it’s going to take me to travel. I don’t take into account the fact that if it’s congested, I may be slowing down all the other cars behind me. But there’s a cost to having additional people doing it. One of the big battles that's occurring with this net neutrality is, the government wants it so that everyone just pays this basic flat fee, and it’s not related to the fact that I may be using it a lot if I’m downloading a lot of movies. If a lot of people are doing that, then it slows down the rate at which everyone else can go and use the Internet. And so, what a lot of the Internet providers would like to do, is to charge higher fees to those people who are hogging up a lot of the bandwidth, so that they take into account the cost that they are imposing on other users.

Thom Hartmann: But, that bandwidth is being paid for, John Lott. While the users were all buying into the Internet at the same flat rate more or less, although there are variations, depending on the speed. If you want low speed Internet access or high speed Internet access, there are different prices. But, that bandwidth is being paid for. I mean, I’ve got a website. I pay the company that hosts our website and our podcasts and things, and our live stream Internet, and video streaming for that matter, we pay based on the amount of stuff that we pump out into the Internet. So, it’s already being paid for. It’s being paid for by the providers. You know, why should we allow the companies that, you know, the Comcasts and Verizons and phone companies and Quests of the world, whatever it may be, the companies that are providing the local access into the Internet, why should we allow them to double charge?

John Lott: Well, because, first of all, the users themselves also use bandwidth. If I go and send large files, even though I’m a private individual there, it still adds to the congestion that occurs on the Internet. And the producers aren’t currently picking up all the costs of doing all that they do. If I go and download a movie, you know, it makes sense to go and charge them. If somebody is trying to charge twice as much as their costs, like charging two different people for the same service, somebody else can come in there and offer it more cheaply.

Thom Hartmann: But there’s already a natural limit on that. I mean, if you buy 1.5 meg downloads, 200K upload, which is kind of the basic, more or less, DSL service from a phone company, or the basic programme from a cable company, that’s like twenty bucks a month or thirty bucks a month, whatever it may be. If you want to go to twelve or twenty megs, you know, download speed, and two or three meg upload speed, that costs forty, fifty dollars. I was just pricing this stuff this weekend.

There’s already that pricing built into the consumer side, and as I said, there is absolute pricing built into the provider side. I think the big issue here with net neutrality is going to be speed. It’s going to be that the pipeline companies, the companies that are providing the Internet data ultimately to the users, want to be able to intentionally slow down some, and Comcast actually did this. They were identifying users, I believe it was Comcast, may have been Verizon, they were identifying users who were heavy users of peer to peer software, that were sharing movies and things, and they started slowing down the data going into their computers. And, you know, they stopped, as a consequence of negative public opinion. I don’t think that that should be allowed.

John Lott: Well, first of all, let’s go back to the commons example that you had. If you own a bigger house than somebody else, you pay more in property taxes. You pay more for fire services and police services than other people who are in smaller.

Thom Hartmann: Whether I use them or not. It’s not based on usage. It’s based on the potential for usage. And, we’re already paying for that. If I want twenty meg download speed, versus one meg download speed, I pay more for that right now. But it doesn’t have to do with how much I’m downloading. But speed is the big issue here. Are you suggesting that speed should be something that we should have to pay for too?

John Lott: Well, first of all, with the fire services, you are always getting those services, whether the guys are always there or not, because he's providing the option that if a fire occurs, he’ll be there. That’s the cost that that fire department is always having to bear. They just don’t bear the cost when you actually have a fire and have to show up. But you know, it’s not just the access that you have to the speed on the Internet, it’s the fact that you slow other people down.They have to go and build more wires, more carrying capacity, if more people……

Thom Hartmann: Right, and they do that, and they charge more for the Internet service. We’ve seen the price for Internet services go up.

John Lott: Well, that’s what net neutrality is trying to get rid of. It’s trying to make it so that if I go and download a bunch of movies, I’m not going to pay anymore than somebody else who is just surfing the Internet.

Thom Hartmann: Within certain limits. Within the limits of the service that you’re paying for. But as I said, I think that the speed is the bigger issue, but we currently haven;t had time to discuss that. John Lott, his website You can read his work over there, the author of “Freedomnomics”. John, thanks for dropping by today.

John Lott: Thanks, good talking to you.

Thom Hartmann: Good talking with you too. 15 minutes past the hour. Net neutrality. Is it doomed? Are the corporations going to ultimately even take over the web?


Anyway, here’s the big picture on this whole issue of net neutrality. And this, I think, really is the big picture. If I have a million dollar mansion, and I call the fire department, they show up as fast as they show up. If I have a five thousand dollar shack, and I call the fire department, they show up as fast as they show up. The holy grail of blowing up net neutrality, and Glenn Beck was going off on this yesterday, and frankly, I don’t think he understands the issue. And you’ve got Americans for Prosperity now trying to shoot down net neutrality. The holy grail for these corporations is having the ability to slow down the Internet. Not speed it up. Intentionally slow it down.

So, for example, if I want to get the news, and I go on and go to ThinkProgress or I got to Common Dreams or I go to or I go to, or, you know, there’s a whole variety, Crooks and Liars, Democratic Underground. If I go to one those web sites, and they load really, really slow, I mean, really slow, a lot of people are not going to wait for it to load. They’re not going to wait, two, three, four, five, six, seven seconds for a website to load. But, if I go to Drudge Report, and boom! It loads instantly, because Matt Drudge paid my Internet Service Provider an extra thousand bucks a month to make sure that his site would load fast, because everybody else's is slowed down. That’s what the guys who are opposing net neutrality want to have happen.

They want the big corporations all across this country to be the ones who can afford to pay for the distribution, for the rapid distribution of what I consider to be part of the intellectual commons of this country; the news. And that rapid distribution of "the news" is really what it’s all about. It should be as it is right now, that regardless of what website you have, regardless of whether it’s being served out of your basement or whether it’s being served out of a multimillion dollar server farm in Dallas, there will be some small differences because, you know, if you’re doing it out of your basement, your personal server may be slow. But assuming that you can get it onto the net at the same speed, then no matter what, who you are, no matter how big or how small you are, as a news source, or a commentary source, or anything else, no matter how big or small you are, your page is going to load at the same speed.

By blowing up net neutrality, the corporatists in this country want to make it so that the phone companies and the Internet providers, the cable companies, that they have, by and large, the phone companies the Internet, and the cable companies, they have by and large, become the brokers, the arbiters, the gatekeepers, of the Internet. And they want to be able to say, 'you know, we’re going to charge you sixteen ways to Sunday. We’re going to figure out all kinds of ways to make extra money on this. If you use a lot of the Internet, we’re going to charge you for more of that'. Now, they’re already doing that to a large extent. There is, as I said earlier, if you want you know, higher pass-through rates, higher speeds, download or upload, you pay more for that. The difference between DSL and cable and T1 and fiber and these kinds of things, and you pay more for more speed, and more capacity.

But the holy grail of this, and that’s download speed to your computer, but the holy grail of this is the pass-through speed. The ability to play the role of gatekeepers, and that’s why Americans for Prosperity and other corporate funded or rich guy funded think tanks are all over net neutrality, and they want to blow up net neutrality. It’s because they want to make sure that they can control the web, to the same extent that they’re trying to pretty much control everything else. I mean, you’ve got the “Washington Times” out there, losing over a billion dollars. Rev Moon’s lost over a billion dollars, to make sure that there’s right-wing news everywhere in Washington DC. You got Fox News that lost a hundred million dollars a year for five years, before Sean Hannity made his first penny for Fox News. Why? To make sure that everybody out there has access to right-wing news, 24/7. There’s no left-wing equivalent in television. There’s no 24/7 left-wing commercial network. Now there is a 24/7, you know, progressive I think you could say, Free Speech TV, but it’s only available on DISH Network, and it’s not ubiquitous like everything else. So the Conservatives want to maintain that lock that they have on the media. They want to extend that to the Internet.

And right now, what they’re seeing, is that progressive web sites on the media are actually out-performing Conservative web sites. If you look at Alexa, if you look at the stats, what you find is that, by and large, the progressive web sites, the Huffington Posts of the world, the OpEdNews's of the world, the Common Dreams of the world, the Buzzflashes of the world, the Democratic Underground of the world, you know, and on it goes. There a lot of great sites out there. The TPMs of the world. That they are actually out performing virtually all of the Conservative web sites.

So the Conservatives, they've got the cash, right, they've got the big corporations behind them. They've got the rich guys behind them. They want to be able to, they want the Internet Service Providers to basically slow down everything on the web, so any web page you go to is going to take two, three, four, five seconds to load, except for the ones that pay an extra fee. Because they’ve got the money, they can pay the extra fee, and this way they can make sure that if you want Conservative news, bang, it’s going to load just like that. If you want right-wing web sites, bang, they’re going to load just like that.

It’s the same thing that they do with books. If you’re a right-wing author, you are guaranteed you’re going to be on “The New York Times” best-seller list. Even if only a few thousand actual people buy your book. You know, one of the foundations run by Richard Mellon Scaife or one of the front groups for the right-wing, they’ll go out and buy ten, twenty, thirty, forty, fifty thousand copies of the book, right out of the gate, in order to get that book on to “The New York Times” best-seller list, so that every, so that it looks like it’s doing well, so that it will create it’s own momentum. They want to do the same thing on the web.


Let me just recap this thing, particularly with regard to net neutrality. There are technologies out there, and they are actually being employed in some places, like in China, that can be inserted between the sender and the receiver of Internet data, that slow down pretty much everything except what they intentionally let through to move through faster. And these technologies, many of the Internet Service Providers in the United States would love to be able use these technologies, because they could charge extra to say, 'ok, we will make sure that your web page loads faster than everybody else's, because everybody else is going to be slowed down'.

What we have right now is kind of not have government control of the Internet, content wise. And we do not have corporate control of the Internet, content wise. And blowing up net neutrality would give corporations control of the content. Now, Glenn Beck is trying to spin this like the government is trying to take control of the content of the Internet. Sorry Glenn, it’s not about that. Right now, what the government is saying, nobody has control over the content; all content is equal. And we’re going to make sure of that. We’re going to establish the rules for the game. By blowing up net neutrality, these large corporations will say no, we’re going to take control of the content; that is to say, we’re going to decide which web sites will load faster or slower on your web browser. And the ones that load faster are the ones that pay us extra money. It’s an extra revenue source for them. Not a good thing.

By the way, a tip of the hat to the chat room, I guess it was v82, I guess, in the chat room passed along this story: "Kudos to the Finnish government", this from TechCruch. "Kudos to the Finnish government", and by the way if you want to drop into our live chat room, just go to thomhartmann, it's free, and I hang out there during the breaks as you can tell, I just got this story from there.

Kudos to the Finnish government, which has just introduced laws guaranteeing broadband access to every person living in Finland... This is reportedly a worldwide first. Starting July 2010, every person in Finland will have the right", the right, "to a one-megabit broadband connection as an intermediate step, says the Ministry of Transport and Communications. By the end of 2015, the legal right will be extended to an impressive 100 Mb broadband connection for everyone in the country."

You know, there’s a bunch of countries that are way ahead of us in Internet connectivity. South Korea’s at the top of the pile. Japan’s right up there. We’re really falling behind in this, and it’s not a good thing. It’s not a good thing for freedom and democracy because, as I pointed out, and we're going to get into this in our third hour as well, you know, newspapers are fading in part because of the debt crisis, because of the cancer stage of capitalism, in part because people are moving over to the web. They’re getting more and more of their news from the web. This has become our information commons.

And we’re now faced with the same kind of choice and decision that we have to make now, that the Founders made in the 1780’s. And they chose in the 1780’s, after the American Revolution, they chose to subsidize the cost of the production of newspapers, by subsiding, by underwriting the cost, by artificially lowering the cost of newsprint. So pretty much anybody, not just the big newspaper producers, not just the politically connected newspapers producers, anybody could buy newsprint, at a substantial discount, subsidized by the taxpayers, and anybody could deliver it to people's homes via the US Post, for a fraction of what it actually cost the Post Office to deliver newspapers. That latter law survives to this day.

We’re confronting the same choice the Founders confronted. Here we have this information commons. Do we make sure that everybody has access to that Internet commons, not just to the receiving end of it, but to the sending end of it, with equal ease, shall we say.

Transcribed by Gerard Aukstiejus.

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