The Federal Communications Commission (FCC) voted today in a 3-2 partisan split to revive Obama-style “net neutrality” rules, which would classify broadband internet as a telecommunications service under Title II of the Communications Act. This would give the FCC more authority to regulate internet service providers (ISPs) and would empower the FCC to regulate the way that ISPs manage data on their networks. Title II regulatory proponents claim that it’s about ensuring ISPs do not throttle or prioritize certain websites or content. . The FCC claims that this move is necessary to protect consumers and promote a fast, fair, safe, and secure internet, despite the fact that the market is already working well and increasing broadband speed, access and affordability. Commissioner Brendan Carr deserves credit for standing up with a strong dissent against this harmful measure.
This plan has been proven in the past to reduce investment in internet services by imposing burdensome regulations on internet service providers (ISPs). Georgetown University research found that the 2015 Title II reclassification led to “17.8% reduction in nominal and 19.8% reduction in real dollars,” in terms of investment. This means fewer jobs, lower productivity, and lost opportunity, especially in rural areas where broadband access is needed the most.
Title II regulation advocates argue that ISPs have no incentive to invest in their networks anyway, because they face little or no competition in many markets. This is not true. Research suggests that 74 percent of U.S. households have access to at least two providers with 100/20 mbps speeds. Broadband competition has increased significantly over the years, with more than ever having access to at least two wired broadband providers. Moreover, new technologies such as 5G, satellite, and fixed wireless are emerging as viable alternatives to traditional broadband services.
Title II rules would also ignore the fact that ISPs have different business models and preferences when it comes to investing in their networks. Some ISPs may focus on expanding their coverage and reaching new customers, while others may focus on enhancing their speed and reliability. Net neutrality rules would force all ISPs to adopt a one-size-fits-all approach that may not suit their specific needs or goals. This would reduce their flexibility and efficiency, and ultimately harm consumers.
Another disproven talking point for net neutrality is that without it, internet speeds will be slower. This has been disproven by speed tests since 2017, which demonstrate average speeds have increased 260% since the rollback of Title II. The internet is not a homogeneous entity; it consists of various types of content and applications that have different bandwidth requirements and latency sensitivities. For example, streaming video or online gaming requires more bandwidth and lower latency than browsing text or sending emails. Therefore, ISPs should be able to prioritize some traffic over others to ensure optimal performance and user experience.
Advocates for this measure argue that ISPs should treat all traffic equally, regardless of its type or source. However, this would create congestion and bottlenecks on the network, especially during peak hours or high-demand events. This would result in slower speeds, lower quality, and more buffering for all users. Moreover, net neutrality rules would prevent ISPs from offering specialized services or features that could enhance the delivery of certain content or applications. For example, ISPs could not offer faster speeds or lower latency for telemedicine, online education, cloud computing, or virtual reality services.
The Title II regime would also ignore the fact that consumers have different preferences and needs when it comes to internet speeds. Some consumers may value speed over quality, while others may value quality over speed. Some consumers may be willing to pay more for faster or better service, while others may be satisfied with slower or cheaper service. Title II rules would eliminate these choices and options for consumers, and force them to accept a uniform level of service that may not suit their specific needs or goals. This would reduce their satisfaction and welfare.
This push for Title II reclassification opens the door for more government intervention and regulation of the internet, which could undermine its openness and innovation. The FCC’s proposal would give the agency broad and vague authority to oversee and regulate any aspect of the internet that it deems to be in the public interest. This could lead to arbitrary and capricious decisions, excessive and unnecessary regulations, political interference, rent-seeking behavior, or regulatory capture. Today’s Notice of Proposed Rulemaking also explicitly puts rate regulation on the table, which will certainly lead to inefficiencies and harm investment and innovation. In turn, this could harm the internet’s growth and development, and threaten its freedom and diversity. The rule will also face scrutiny under the “major questions” doctrine by the U.S. Supreme Court.
The FCC’s revived Title II regulations are a disproven idea that will have negative consequences for the internet and its users. It would reduce investment and innovation in the broadband industry, slow down internet speeds and degrade service quality for many online applications and services, create legal uncertainty, and invite more government interference in the internet ecosystem. The FCC should abandon this proposal and instead adopt a light-touch approach that preserves the flexibility and efficiency of ISPs, respects the preferences and choices of consumers, and promotes competition and innovation in the internet market.