Wall Street Journal Upset That Wall Street Isn't Upset About Net Neutrality

from the isn't-the-market-always-right? dept

The permissionless Internet, which allows anyone to introduce a website, app or device without government review, ends this week.

Bureaucrats can review the fairness of Google's search results, Facebook's news feeds and news sites' links to one another and to advertisers. BlackBerry is already lobbying the FCC to force Apple and Netflix to offer apps for BlackBerry’s unpopular phones. Bureaucrats will oversee peering, content-delivery networks and other parts of the interconnected network that enables everything from Netflix and YouTube to security drones and online surgery.

Investors actually seemed to breathe a sigh of relief when FCC Chairman Tom Wheeler unveiled his proposal on Feb. 4, sending cable stocks higher. Investors were cheering the chairman’s assurance that the commission wouldn’t invoke the Title II power to regulate prices.



But investors, beware: Broadband’s new status opens the door to the possibility of a future that is far less lucrative and more uncertain for the companies that provide it.

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A few weeks ago, after it was more or less confirmed that the FCC was going forward with full Title II reclassification of broadband, we noted that the stocks of the big broadband companies actually went up suggesting that Wall Street actually knows that reclassification won't really impact broadband companies, despite what they've been saying publicly. Perhaps this is partly because those same companies have been telling Wall Street that the rule change won't have an impact.However, for the Wall Street Journal -- which has become weirdly, obsessively, anti-net neutrality -- this is an abomination. The newspaper has spent months trying to whip everyone into a frenzy about how evil net neutrality is, using some of the most blatantlyarguments around. Just a few days ago, the WSJ turned to its former publisher, now columnist, L. Gordon Crovitz to spread as much misinformation as possible . This is the same L. Gordon Crovitz who a few years ago wrote such a ridiculouslyarticle on the history of the internet that basically everyone shoved each other aside to detail how he mangled the history. He, bizarrely, insisted that the government had no role in the creation of the internet. Crovitz also has a history of being wrong (and woefully uninformed) about surveillance and encryption . It's difficult to understand why the WSJ allows him to continue writing pieces that are so frequently factually challenged.In this latest piece, Crovitz suggests that Ted Cruz didn't go far enough in comparing Obamacare to net neutrality, arguing that net neutrality is even "worse."Um, no, actually, the reverse. The rules say that no website or app needs to get permission. The government isn't going to be reviewing anything, other than anti-consumer practices by the large ISPs.None of this is true. The BlackBerry thing isn't real . It's a stupid political stunt cooked up by the telcos to try to make the new rules look bad. But the rules do not, in any way, apply to Google's search results or Facebook's news feed or any other content online. It covers, and all it does is put in place some straightforward rules against discrimination.Still, all this fear mongering isn't working. Following yesterday's decision by the FCC, the folks over at Quartz noticed that the big broadband stocks have actually had a pretty damn good month Which brings us back around to the Wall Street Journal. The paper of record for Wall Street, whichlikes to suggest that markets are "right" about everything, is absolutely positive that the markets are wrong about this. And it's furious. It has an article demanding that broadband investors need to "wake up" to what's happening with net neutrality:Bullshit. Frankly, things can always change in the future, in either direction, so claiming that things might change is meaningless FUD. At the end of the article, the WSJ pretends that maybe the reason why stocks are up is because investors expect that the broadband players will win an eventual court battle, but that seems like wishful thinking on multiple levels. Let's go with Occam's Razor on this one. The market is up because everyone knows that Title II won't make a huge difference at all for the prospects of broadband companies. Multiple Wall St. analysts have been saying this for months, as have the big broadband companies to the analysts themselves.The Wall Street Journal should take a page from its own playbook: maybe the markets do know best.

Filed Under: gordon crovitz, investors, market, net neutrality, title ii, wall street, wall street journal