JRelentless efforts to impose utility regulation on broadband Internet service providers under the guise of “net neutrality” are as regular as Groundhog Day and just as predictable. The difference is that Punxsutawney Phil – playing his assigned role – is cuddly and cute, while the tireless push to impose utility regulation on broadband providers is damaging and destructive.
Nevertheless, here is the groundhog of net neutrality again!
With the Federal Communications Commission deadlocked 2-2, it cannot reinstate the common carrier regime for Internet service providers, or ISPs, dumped by the agency in January 2018. But on July 28, the senses. Ed Markey (D-MA) and Ron Wyden (D-OR) and Rep. Doris Matsui (D-CA) introduced the “Net Neutrality and Broadband Justice Act” in the Senate and House. The bill would categorize ISPs as common carriers and restore inflexible prohibitions of non-discrimination that, like the
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, would have “massive implications” for the tech industry and the rest of the economy. According to Posts
the bill “would change how aggressively the FCC can regulate issues such as Internet pricing, consumer privacy, and competition in the broadband marketplace.”
Stripped of much of its hyperbolic rhetoric, “net neutrality” regulation essentially means that broadband ISPs, such as AT&T, Charter, Verizon, Comcast, T-Mobile and hundreds of others, who were once classified as common carriers, would be regulated in much the same way as the old telephone and telegraph operators in the monopoly environment of the analog era of the last century.
Perhaps the mantra of “net neutrality” might sound appealing in the abstract. But in today’s world of competitive market realities, adopting yet another Biden-era, heavy-handed regulatory approach won’t protect consumers — it will hurt them. There are several reasons why imposing utility-type regulation on Internet service providers will hurt more than it helps.
Here are a few.
First, there is no current evidence, and there hasn’t been in years, that ISPs have engaged in deliberate discriminatory conduct. Almost all ISP terms of service contain legally enforceable commitments not to block or limit subscribers’ access to lawful content. To the extent that a few old incidents are cited which, in theory, would violate strict anti-discrimination prohibitions, they have been isolated and quickly corrected. This is why net neutrality advocates must speculate on what “might”, “could” or “may” happen in the absence of new regulation, rather than identifying any existing problems that warrant costly new regulatory mandates.
Second, the market for broadband Internet services is already effectively competitive in most of the United States and is becoming more competitive in areas where it is not already. FCC data indicates that as of December 31, 2020, approximately 99% of the US population already had access to two competing broadband providers. Since then, consumer choices for broadband services have expanded dramatically, including in rural areas. RVA studies indicate fiber broadband availability to US homes increased 12% in 2021 and fiber was already available to 60.5 million homes, or 43% of all homes, in January 2022.
Consumers have also benefited from the rapid rollout of ultra-fast 5G wireless broadband services in 2021 and 2022. AT&T, T-Mobile, and Verizon have nationwide 5G network footprints. Over the past year, subscriptions to 5G fixed wireless access broadband services have increased sharply. Cowen predicted that fixed wireless service providers will add nearly 2.3 million new broadband subscribers in 2022. Meanwhile, satellite broadband services, such as Elon Musk’s Starlink, are being rolled out. deployment and provide additional choices.
Third, imposing utility regulation will stifle investment and innovation. Price controls, which inevitably accompany utility-type regulation in one form or another, undermine the ability of ISPs to generate revenue and invest in new or upgraded networks. Recent experience confirms this anti-investment effect. After the Obama-era FCC imposed utility regulations on ISPs in 2015, investment in private networks declined in each of the following two years. But after the Trump FCC repeal of the utility regulatory regime in January 2018, annual ISP investment increased and it remains high to this day.
According to data from USTelecom, capital expenditures by U.S. broadband providers totaled $79.4 billion in 2020 and $86.1 billion in 2021. And significantly, as ISPs invest dozens of billion each year in the deployment of new networks, the price of the most popular broadband providers the level of speed has fallen by 14.7% compared to 2021-2022 – despite the general surge in inflation. New price controls would almost certainly upset the current favorable investment climate.
In addition, the inflexible non-discrimination requirement of utility regulation hampers the ability of ISPs to experiment with new business models that respond to differentiated consumer demands.
In summary, re-imposing utility-style net neutrality regulation on Internet service providers would be detrimental to consumers and the economy at a time when dark economic clouds are looming. It might be possible for Congress to craft a lean regulatory approach to “net neutrality” that benefits consumers rather than harms them — and it should try to do so after two decades of ongoing neutrality controversy. from the net. But bills like the one introduced by Sens. Markey and Wyden and Rep. Matsui should be chess.
The groundhog in net neutrality gear should return to its burrow – and stay there.
Randolph May is president of the Free State Foundation, a think tank in Rockville, Maryland, and Seth Cooper is director of policy studies and senior fellow. They are co-editors of the book, A reader on net neutrality and the restoration of internet freedom.