Mike Godwin has a post comparing the NYC taxi system to net neutrality. I think the comparison is an apt one, but not for the reasons he cites.
Mike's argument is that measured regulation of the sort applied to NYC cabs makes a good model for the Internet:
But one can imagine what riding in taxicabs might be like if taxicab operators had freedom to discriminate based on where a passenger was going or what he or she planned to do after getting there. Taxicab companies might be tempted under such a circumstances to cut special deals — to provide better rates and/or service to someone traveling to Radio City Music Hall rather than to the Museum of Modern Art simply because the former had a commercial partnership with the taxicab company.
Actually, I can imagine what would happen if taxis were allowed to set their own prices and define their own services. There would be much more variety in the market, more costs would shift away from the consumer (his Radio City example above) and more cabs would be on the road.
Think about the markets where this is true: automobiles, clothing, PCs, food. In each of those markets, the producers have the freedom to decide what they will produce, how they will price it and to whom they will sell it. And in each case, these markets provide an embarrassment of riches, reaching from urban centers to the hinterland, and across the income spectrum.
By comparison, the NYC taxicab market is successful only on a 12 mile by 2 mile ellipse of land on our East Coast, with a population density of over 66,000 people per sq. mile. You read that right. It's also a fair bet that folks in Manhattan earn pretty good coin, yet the cost of owning one's own car is prohibitive.
New York's regulated taxicab model serves a very small, geographically specific, high-income, densely populated area, where the primary competition (the personal automobile) has been priced out of the market. There is a reason that cab service is not available in the other 99% of the country. This is a vision for the Internet?
And guess what? Even with that perfect storm of demography, cabs are scarce too often. Hailing a cab is a pretty good possibility below 72nd Street, so long as there is not a lot of demand. Like other regulated markets, taxi supply does not scale. And that's just Manhattan -- ever try hailing a cab in one of the outer boroughs?
Mike's neutrality analogy is a good one. It shows us what happens when we try to regulate markets: scarcity, inconsistent service, benefits focused on urban elites. And we still end up sitting in traffic on the Van Wyck.
The Internet deserves better.™
h/t Glenn
More background here.
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