Burger King Has It Its Way
By David Henderson
Clemson University economist, and expert on the FCC and net neutrality, Thomas W. Hazlett, wrote the following on Facebook yesterday (he gave me permission to quote) about Burger King’s now-famous (infamous) exposition of net neutrality:
Is this The Onion? A Burger King video attempts to explain Net Neutrality regulation. A quick service Whopper costing $25.99 is delivered fast, while a meal you wait for costs $4.99. Oops! Perfectly wrong. Burger King is under no “common carrier” mandate, and is perfectly free to price that way. It would be stupid, and customers would be offended (as in the video, that’s the point of the script). So it doesn’t happen. No regulation needed. Burger King misunderstands their own explainer video.
By the way, Burger King does discriminate among customers. For an extra fee, BK Delivers will take your order to your home. Call it a “fast lane” for the Whopper. Of course, promotional discounts do not apply. And the service varies by area. Don’t be offended: not all differential pricing is stupid or anti-consumer. But Burger King should be. On its script, it’s violating cheeseburger neutrality.
I’ll add two other points:
1. Notice in the video that Burger King employees purposely slow down service to people even though the burger is ready. So Burger King’s video makes it look as if the slowness has nothing to do with a capacity constraint. That’s not what’s happening on the Internet. The reason for low speeds is a capacity constraint.
2. If Burger King really wanted to use its own restaurant as a way to illustrate net neutrality, it would show the employees selling two hamburgers to one customer at the same price as it sells one hamburger to another customer. But then, of course, everyone would see the absurdity in this pricing scheme. Burger King doesn’t want them to see. An alternative explanation is that whoever at Burger King wrote the script for its together doesn’t understand the issue. Which explanation do you prefer? Have it your way.