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Kudos to new Phoenix study; shows how NN skews market against consumers

For those looking for hefty substance in understanding the economic impacts of net regulation, I strongly recommend the Phoenix Center's new Policy Paper No. 28, Network Neutrality and Foreclosing Market Exchange: a Transaction Cost Analysis."

  • It is the best serious economic analysis I have seen to date in explaining how government interference in the broadband marketplace would backfire on the consumer in many harmful ways.
  • While NN has been an effective bumper sticker campaign, it is embarassingly devoid of analysis or justification that the legislative language will actually deliver what it's proponents claim it will deliver.

Why the Phoenix paper is so useful in this debate is it substantively explains how net regulation prohibitions on commerce negatively affect consumer prices, benefits and choices.

  • In laymans terms, this policy paper explains that when the law interferes with the free market and tilts the playing field to advantage one side, the online giants, it enables the online giants to shift their costs onto the backs of the consumer, while also prohibiting the market from dynamically responding in ways that would benefit the consumer with innovation or lower prices -- a classic double whammy on consumers. 
  • The big take away from this paper is that net regulation of the type in proposed legislation, economically favors the online giants at the expense of consumers.

This paper also helps expose the biggest scam in the Net Neutrality debate, that net regulation benefits consumers.

  • The "moveon-atons" that call themselves the grass roots or net roots on this issue -- have been had -- and they don't even know it -- or seem to care to find out.
  • If they thought for themselves, they would see the obvious economic problems with the net neutrality legislation as drafted.
    • It is extremely regressive, forcing the vast majority of Internet users (who are relatively low bandwidth users) to subsidize the small Internet minority of bandwidth hogs: the online giants and peer2peer pirates:
    • It is also highly counter productive for getting all Americans universal broadband quickly -- an important goal the net roots clearly want to encourage.
  • Think. Use common sense.