It was one year ago this week that the Federal Communications Commission (FCC) implemented its reversal of the Obama-era regulations of the Internet, known as “net neutrality.” The positive results over the past year tell a powerful story about why government should not be in the business of regulating the Internet.
President Donald Trump’s nominee to the FCC, Chairman Ajit Pai, recently explained what “net neutrality” is. The term, he says, is a “very seductive marketing slogan,” but “ultimately what it means is government regulation of the Internet.”
“Neutrality,” like the word “fairness” and other liberal shibboleths, has a nice ring to it, but the true aims of net neutrality are a far cry from the benign-sounding name. Tim Wu, the Columbia Law School professor who coined the term “net neutrality,” explained to members of Congress the purpose of the policy. The regulations that comprise net neutrality exist to give the FCC the ability to shape “media policy, social policy, oversight of the political process, [and] issues of free speech.”
It’s probably safe to assume that when most Americans hear the words “net neutrality,” they don’t associate the term with government heavy-handedness in Internet regulations to push a social agenda or to seize greater oversight of the political process.
Net neutrality was borne from an Obama campaign promise in the 2008 election. Following through on that campaign promise in 2014, he urged the FCC to pursue “the strongest possible” rules to implement a net neutrality policy. The FCC, responding to Obama’s urgings a few months later, voted in favor of net neutrality rules.
The FCC, however, lacked the legal authority to regulate the Internet. Not to be deterred, the agency simply reclassified Internet service providers as “common carriers” under Title II of the Telecommunications Act, effectively making the companies public utilities.
The Internet thus became part of FDR’s 1934 telecommunications regulatory regime.
Placing the Internet under the Telecommunications Act gave the FCC the authority to regulate the rates Internet Service Providers (ISPs) could charge, to review and even block business models in the ISP space, and even to create a tax on Internet use.
That was then, in the Obama FCC. The picture today is much brighter with Ajit Pai’s policies for an open and competitive Internet.
The FCC last month produced a report on broadband usage around the country. The report documents broadband use and access in each state, focusing especially on rural access. The results couldn’t be clearer: Internet speeds in the United States are faster than they have ever been (up nearly 40 percent). The so-called “digital divide,” which measures the percentage of Americans without access to high-speed Internet, is down by almost 20 percent. The United States is the leader in 5G, with the world’s largest commercial use of 5G.
Speaking about the report, Chairman Pai said the FCC’s new policy is working. He is right, of course, and the exhaustive study proves that. But the study also proves something just as important — the failure of government interference in this area. One of the report’s more shocking facts is that broadband Internet access in the United States fell from 2016 to 2017. The number of Americans with access to broadband dropped 18 percent (to 21.3 million) in 2017 from 26.1 million in 2016.
When you stop to think about it, is it any wonder? Forcing modern-day technology into decades-old regulatory regimes is the definition of a retrograde policy. Competition and infrastructure investments declined in response, and the result was that fewer Americans had access to broadband connections.
As Ajit Pai has guided the FCC toward a more open and pro-competition Internet policy, the response from liberal activists has been high-pitched hysteria. Democrats on Capitol Hill joined the activists, predicting that Pai’s policies would be the “end of the Internet.” Please. As the report shows, ending the anti-competitive net neutrality policy has resulted in a better, faster, and more accessible Internet for Americans.
The results of Chairman Pai’s policies prove the well-established economic fact: When government gets out of the way, the free market is able to foster greater competition and lower prices, and, thus, wider use. Millions more Americans today enjoy high-speed broadband because the free market has been able to achieve the exact opposite effect of the heavy-handed net neutrality regulations.
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