Regulatory Reform

The Net Neutrality Day of Action Was A Flop

Companies large and small across the United States participated in yesterday’s day of action to protest the Federal Communications Commission’s (FCC) proposed reversal of Chairman Wheeler’s Title II reclassification of the internet as a common carrier. Although Title II, and the independent but related topic of Net Neutrality, may be obscure topics, high-profile companies like Google, Amazon and Reddit all joined. Despite these organizations’ concerted efforts, the protest has largely fallen flat.

The issue at hand is whether the FCC should repeal the Open Internet Order of 2015 (OIO) and return to the light-touch regulations that came before it. The 2015 Order reclassified broadband providers so they fall under Title II of the Communications Act of 1934, a set of rules designed for rotary phones and Ma Bell’s telephone monopoly in the 1930s. The FCC should return to the regulations that helped the internet grow to be what it is today, not cling to an outdated understanding of telecommunications.

The Telecommunications Act of 1996 codified the light-touch regulations that governed internet service providers until the 2015 Order. During that time, the internet went from being a little-used government project to the vibrant, open system it is today. Users demanded better technology, and companies were willing to make investments in research that drove an exponential increase in connectivity and computing power.

Before the Open Internet Order, consumers drove the growth of the internet. Innovative products like fiber optic networks and mobile broadband brought faster and more reliable internet service to more and more of the population. Broadband was offered in an open, competitive market with strong consumer protections at the state and federal levels. Informed customers were able to decide which level of service they required and pushed for faster and more reliable connections as internet companies came to be an essential part of their daily lives. In this kind of competitive market, the consumer is a better regulator than the FCC. If one company sets policies that hurt customers, they will switch to another that offers a better alternative.

The modern internet economy grew up without heavy-handed government intervention. Light-touch regulation fostered the innovation and investment boom that defined the 1990s and 2000s. Under the previous rules, companies were willing to develop and deploy new products at great cost because customers were asking for them and the government wasn’t getting in the way.

Since 1996, United States telecommunications companies have invested $1.5 trillion in network infrastructure deployment to reach as many customers with as high-quality service as possible. If those same companies have to worry about utility-style regulation under Title II, they will give up ambitious projects like those that have accelerated American innovation in recent decades. New technologies like 5G mobile internet will be rolled out slowly if investment declines because of the OIO. Put simply, Title II regulations are a poor fit for a rapidly evolving internet market.

Technology has advanced so rapidly in past decades that observers might not have noticed why it was happening. History has proven that the internet flourishes when the companies contributing to it are allowed to “move fast and break things”. The Restoring Internet Freedom rules under consideration by the FCC will return internet service providers to the light-touch regulations that allowed them to flourish.


In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and …

+ Regulatory Reform In Depth