What Net 'Neutrality' and the Federal Reserve Have in Common

The recent vote in which the Federal Communications Commission (FCC) gave itself more power over the Internet reminds me very much of the Federal Reserve Act of 1913. You know – the legislation that created an institution so egregious that nearly 100 years later, Satoshi Nakamoto was compelled to completely reinvent money so that we could finally be rid of it.

How are the Fed and the notion of net “neutrality” similar, you ask? Actually, a better question would be, how are they not similar?

The History of Banking “Neutrality”

In 1910, Americans were fed up with big banks (though not as much as they're fed up with them now). And why were the big banks such royal pains in the ass? For the same reason that ISPs are a pain in the ass today: they didn't have very much competition. Consumers didn't have many choices because state regulations had kept most banking competition out.

So in 1913, the U.S. federal government proposed a system – the Federal Reserve system – which would reign in those unruly banks. Make them serve consumers instead of themselves. Use the good hand of government to stop the chaos that had been unleashed by a “free market.”

Federal Reserve Conspiracy

In other words, the federal government proposed a kind of “banking neutrality” to the people of America. And after some of the big bankers put on a show of opposing the Federal Reserve Act (just like many ISPs have pretended to oppose net “neutrality”), enough Americans latched on to the idea that the Federal Reserve was born.

Trading in Oligopoly for Monopoly

The banks in 1910 had an oligopoly on money. An oligopoly results when a few state-protected business collude together to reduce competition and charge higher prices.

And today, ISPs have an oligopoly on the Internet cable system, too. Everyone knows it, and an LA comedy troupe garnered 5 million views just explaining it on YouTube:

With 1913's Federal Reserve Act, people chose to swap out the banking oligopoly for a banking monopoly instead. And with net “neutrality,” people are now doing the same with the Internet.

The U.S. Federal Reserve's own website states that their goal is:

“Supervising and regulating banks and other important financial institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers.”

Swap out a few words, and the Federal Reserve's mission statement follows the same general creed as the FCC's net “neutrality.” Check it out:

“Supervising and regulating Internet Service Providers (ISPs) to ensure the safety and soundness of the nation's Internet system and to protect the communication rights of consumers.”

Would it be too trite to now mention how history repeats itself?

Why It Doesn't Matter

Before we despair about the short-sightedness of people who support centralized control of the Internet, let's take a step back and ask ourselves: does it really matter in the long run?

Because I think it doesn't. In time, I predict we won't even be using ISPs. Instead, we'll each be our own ISP. I'm confident of this because of Bitcoin. Peer-to-peer currency made you your own bank – wouldn't peer-to-peer Internet make you your own ISP? There's already a term for it: a mesh net.

(Hell, before we achieve a full mesh net, a cool stepping stone might look like Elon Musk's satellite-powered global Internet.)

Trustless, decentralized solutions are the way of the future. Net “neutrality” will serve as just another horrible chapter in history, to be overcome by later innovations.

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