Look! The Market Acts In An Utterly Predictable Fashion.
And yet, it does not
lead us unto that good land flowing with milk and honey promised by Coase and Friedman. Instead, it rather predictably leads right where I and other bad progressives in favor of the evil of regulating net neutrality predicted it would lead -- into an arms race Armageddon between deregulated network providers and unregulated application providers.
Two weeks ago, the Canadian Radio-Television Commission (CRTC), Canada's equivalent of the FCC, rejected the Canadian equivalent of the Comcast complaint against Bell Canada. CRTC held that Bell Canada could throttle traffic for its own customers and for customers on the networks of rival ISPs purchasing wholesale access from Bell Canada and reselling retail services. Not surprisingly, those opposed to regulation of network operators cheered this decision.
Now, BitTorrent has released a version of its file sharing protocol that routes around Bell Canada's traffic management technology and may create some serious instability issues for networks globally because it could lead to widespread abandonment of the existing protocol for traffic management (TCP) for a protocol usually reserved for latency intolerant traffic (UDP).
Those who cheered the CRTC seem quite indignant over this predictable response. They seem to think application providers should not react like free market actors.
Those who trust the market to behave in predictable ways, but do not worship it, are experiencing some serious Cassandrafruede.
My blog entry providing greater explanation, with relevant links:http://www.wetmachine.com/totsf/item/1402