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

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

Fri, Feb 27th 2015 10:34am — Mike Masnick

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 blatantly wrong arguments 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 ridiculously wrong article 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."

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

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.

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.

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 internet access services, 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, which normally likes 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:

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.

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.

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

34 Comments

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Spaceman Spiff (profile), 27 Feb 2015 @ 10:07am

Time to change the name
Instead of the Wall Street Journal, it should be the Rupert Murdoch Journal. He can't tell the truth to save his soul, and now the WSJ cannot either...
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Ninja (profile), 27 Feb 2015 @ 10:10am

Meanwhile Jack Valenti's spirit nods in approval from somewhere in the afterlife.
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ChurchHatesTucker (profile), 27 Feb 2015 @ 10:47am

My guess
Mirriam Gottfried must have shorted Comcast.
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That One Guy (profile), 27 Feb 2015 @ 11:06am

'I told you to start freaking out, why are you still calm?!'
This has just got to be driving them nuts, they spend so much time and energy trying to cause as much panic as possible, and yet people and companies refuse to panic.

Why, it's almost as though people were able to see through their fearmongering, and in fact are better informed about the matter than they seem to think.
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Anonymous Coward, 27 Feb 2015 @ 11:26am

Simple rule
> However, for the Wall Street Journal -- which has become weirdly, obsessively, anti-net neutrality...

Not weird at all. Obama was for it, so they're against it. It's a simple rule that saves a lot of time when writing editorials.
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Chris Foleen, 27 Feb 2015 @ 11:33am

I'm curious
How is it that you _know_ that "Um, no, it's actually the reverse" and "None of this is true"? I thought you said earlier that the actual rules haven't been released and no member of the public has been able to read them?

I am undecided on this controversy and have looked to Techdirt for unbiased, factual information but your assertions in this article make me doubt your objectivity.
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Mason Wheeler (profile), 27 Feb 2015 @ 11:35am

With all due credit to Ronald Reagan, it's not what the Wall Street Journal doesn't know that makes them dangerous, it's all the things they do know that just ain't so!
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Arkiel, 27 Feb 2015 @ 11:38am

Nice to see Charter at the top. Damn shame Verizon isn't at the bottom.
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Anonymous Coward, 27 Feb 2015 @ 11:50am

Re: Time to change the name
I'm pretty sure he sold his soul a long time ago.
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michael, 27 Feb 2015 @ 11:52am

Re: I'm curious
> How is it that you _know_ that "Um, no, it's actually the
> reverse" and "None of this is true"? I thought you said
> earlier that the actual rules haven't been released and no
> member of the public has been able to read them?"

The rules were released yesterday, genius. Maybe you saw the headline in every paper and every news website on earth. And they say what we already knew -- that "none of this is true" and "it's actually the reverse."
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PRMan, 27 Feb 2015 @ 12:17pm

Re: 'I told you to start freaking out, why are you still calm?!'
Why, it's almost as though people were able to see through their fearmongering, and in fact are better informed about the matter than they are.

FTFY
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Chris Foleen, 27 Feb 2015 @ 12:19pm

Re: Re: I'm curious
Actually, it was the vote that happened yesterday, not the release of the rules.
In yesterday's Techdirt article "The FCC's Historic Day: Voting Yes For Net Neutrality, Voting No On Protectionist State Telecom Law" he states "it's important to note that despite a 3-2 vote approving the Title II-based rules, we won't get to see the actual rules today. Despite claims by neutrality opponents that this is some secret cabal specific to net neutrality, the agency historically has never released rules it votes on (pdf) until well after the actual vote."
So, my question still stands.
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nasch (profile), 27 Feb 2015 @ 12:44pm

Re:

With all due credit to Ronald Reagan, it's not what the Wall Street Journal doesn't know that makes them dangerous, it's all the things they do know that just ain't so!

Neither Ronald Reagan nor his speech writer deserve the credit for that line, though it's not clear who does.

http://wellnowbob.blogspot.com/2008/07/it-aint-what-you-dont-know.html
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Anonymous Coward, 27 Feb 2015 @ 1:58pm

Re: I'm curious
curious clueless
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That One Guy, 27 Feb 2015 @ 2:45pm

He's doing his job
"It's difficult to understand why the WSJ allows him to continue writing pieces that are so frequently factually challenged." Because they know the BelowAverageJoe will never turn off the TeeVee to fact check.
Repeat the lie and repeat it often. Propaganda at its finest.
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Mike Masnick (profile), 27 Feb 2015 @ 3:05pm

Re: I'm curious
How is it that you _know_ that "Um, no, it's actually the reverse" and "None of this is true"? I thought you said earlier that the actual rules haven't been released and no member of the public has been able to read them?

The overall concept behind the rules has been released, which shows those claims are not true.

I'm still concerned about the details *on the margins* which may have some bad or worrisome stuff in there, but nothing like what the WSJ was talking about. Enough people have seen the rules to know what the overall issues are.
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mmmwok (profile), 27 Feb 2015 @ 3:07pm

Re: Re: I'm curious
The rules' language wasn't released yet though...

If the language has been released maybe you could link me some articles, you know, the things beneath the headlines, that have the language. Thanks.
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mmmwok (profile), 27 Feb 2015 @ 3:13pm

Re: Re: I'm curious
Yeah, Crovitz is a dummy and spreading misinformation.

But placing the internet under the regulatory umbrella of the Communications Act does give the government power over ISPs and the internet that previously didn't exist. The current rules more than likely won't have anything problematic, and net neutrality is probably for the best, but who knows what some future bureaucrat will push for in the future using this as the framework (but that's a slippery slope and it's a small worry compared to current problems).
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ken (profile), 27 Feb 2015 @ 3:25pm

Government takeover was unnecessary
Obama was all gung-ho and used the full force of his administration to get ISPs to police copyrights but had no interest at all in doing the same thing to get ISPs to voluntarily adopt net neutrality. Rather he went the government takeover route. Hmmm wonder why?
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ken (profile), 27 Feb 2015 @ 3:28pm

Re: Government takeover was unnecessary
It is interesting that the RIAA/MPAA strong armed ISPs with the help of the Obama Administration into becoming copyright cops but we could not have used some pressure the ISPs into voluntarily adopting net neutrality principles.
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Anonymous Coward, 27 Feb 2015 @ 3:54pm

Re: Time to change the name
A shame too, used to be you could get a pro-business perspective from WSJ that wasn't completely psychotic.
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Zonker, 27 Feb 2015 @ 4:59pm

Re: Re: Time to change the name
I'm pretty sure he sold his soul to prevent himself from damning it.
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Anonymous Coward, 27 Feb 2015 @ 5:00pm

Re: Government takeover was unnecessary
Isn't it obvious? The lizard men are about to emerge from their vast cave complexes inside our hollow earth. Now that free speech has been completely destroyed by the FCC (I'm not actually even typing this) and the FEMA camps are finally filling up with god-fearing Americans, the Antichrist can finally step out of the mortal shell that is Obama and bellow his bowel-shaking roar, that sound that signals the end times. Only Jesus can save us now!!!1!1!
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Pixelation, 27 Feb 2015 @ 5:19pm

"It's difficult to understand why the WSJ allows him to continue writing pieces that are so frequently factually challenged. "

Simple, they have an agenda and are willing to let him lie to help it. Follow the money and you'll find out why, I'm sure.
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XL493, 27 Feb 2015 @ 5:20pm

The problem is Murdoch
WSJ is owned by News Corp, one of Rupert Murdoch's companies.

In Australia most of the media is owned by News Corp and the reporting is constently ultra-right wing, unhinged propaganda for special interests and the tea party wing of domestic politics. This is entirely consistent with the views held by the demented old bloodsucker Murdoch himself.

Our current tea party government only got in because of a sustained campaign by Murdoch media. The first thing that the new government when it got in was to "refund" $900,000,000 in taxes to Murdoch and begin demolishing a major infrastructure project that was underway called the NBN (National Broadband Network). Murdoch is anti-internet for a variety of reasons. Some to do with his business interests, other more to do with him simply being a ****.

The sooner the cancer of the Murdoch media is struck from this earth the better.
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That One Guy (profile), 27 Feb 2015 @ 5:21pm

Re: Government takeover was unnecessary
And by 'strong armed' you mean the single letter of support he sent them I'm guessing?

Indeed, Obama certainly brought overwhelming force to the matter, it's a wonder they didn't cave to his might before now.
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Zonker, 27 Feb 2015 @ 5:37pm

Re: Government takeover was unnecessary
The ISPs had voluntarily adopted net neutrality with the FCC to some degree under Section 706.

Then Verizon sued against the agreement and got the courts to rule that the FCC could only enforce net neutrality rules on "telecommunications services" (Title II), not "information services" (Section 706).

Since the Ninth Circuit previously ruled that cable internet services are both, the FCC is just doing what courts said they have to do to enforce the net neutrality rules similar to those previously agreed to by using Title II instead of Section 706.

Oh, and the FCC is not Obama. Two out of their five commissioners disagreed with him. Obama didn't even have a vote in the matter. You appear to be demonstrating what Anonymous Coward's comment above claims forms the basis for Wall Street Journal's editorial decisions.

If you base your opinion so much on anything Obama is in favor of you must be against, why would you put so much stock in what Obama thinks to let him make your decisions on what to hate for you?
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Anonymous Coward, 28 Feb 2015 @ 12:53am

It seems like most people have weighed in on broadband and pro net neutrality is probably a majority. I don't think they'll reverse it in the long term.
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Jake, 28 Feb 2015 @ 7:15am

This should surprise absolutely nobody. Financial services, particularly high-frequency trading, is totally dependent on the Internet and uses a huge amount of data. You think the status quo's benefiting them?
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Padpaw (profile), 28 Feb 2015 @ 10:52am

How is Crovitz not a politician already? he has the most basic tenant down, always lie to support whatever your argument is. Never let true facts get in your way and always assume the people that watch and listen to you are idiots.
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Padpaw (profile), 28 Feb 2015 @ 10:55am

Re: I'm curious
lets hope for the best. Though I would not be surprised if this has all been a smokescreen and what people said they would do, they instead did what they were paid off to do.
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Sheogorath (profile), 28 Feb 2015 @ 1:16pm

BlackBerry is already lobbying the FCC to force Apple and Netflix to offer apps for BlackBerry’s unpopular phones.
Why do people feel the need to make up this shit? Maybe I should inform the Wall Street Journal that the reason BlackBerry devices are 'unpopular' is because they're unavailable. Seriously, the last time I saw one for sale, it was pre-owned, and I didn't want it because if it terminally glitched in the fourth month of ownership, there'd be nothing I could do unless I could find the receipt.
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Pragmatic, 2 Mar 2015 @ 4:53am

Re: Time to change the name
That invisible hand trope has always been a red herring. The truth is, "the free market" does not and indeed can not exist because incumbents won't allow it. The last thing your free market enthusiasts want is a market that is actually free because that means they'd have to compete, which means profits might drop.

What Title II does is prevent incumbents from monopolizing the last mile, i.e. it helps to free the market up a bit, which is probably why WSJ is freaking out.

I'm glad the government did its job last week; serving the public interest, not that of the corporations.
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nasch (profile), 2 Mar 2015 @ 7:21am

Re: Re: Time to change the name

What Title II does is prevent incumbents from monopolizing the last mile,

No, it doesn't do that. It just prevents some abuses of that monopoly.
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