By Phil Kerpen
For two years, starting in 2015, the FCC regulated Internet service providers as public utilities in the name of net neutrality. When the Trump FCC under Chairman Ajit Pai proposed to repeal those Obama-era regulations, the media and other Democrats unleashed a series of apocalyptic predictions.
“End of the Internet as We Know It,” headlined the CNN home page.
“The Internet Is Dying. Repealing Net Neutrality Hastens That Death,” was the New York Times version.
“The repeal of Net Neutrality is an assault on our digital civil rights. This is an issue that will define our times,” was the statement from Senator Ed Markey, typical of Senate Democrats.
Pai followed through on his proposal and made those predictions look ridiculous. The lightly regulated, free-market approach passed the lockdown-era Zoom-boom test with flying colors, with hardly a hiccup as vast amounts of offline activity moved online in stark contrast to regulated Europe.
A CNN headline read: “Netflix and YouTube are slowing down in Europe to keep the Internet from breaking.”
Unfortunately, one of the only places in the United States where the Internet was not working well during lockdowns was at FCC chair Jessica Rosenworcel’s house – and, shockingly, it is possible to rise that position without understanding the difference between your local area network and the Internet.
Last week, Rosenworcel announced a new proposed rule almost identical to the short-lived Obama rule, and her whole speech was framed by the problems with her router:
“We were told to stay home, hunker down, and move life online. So I grabbed what I thought was important at work and moved my office to my dining room table. At home, I kept changing the location of the Wi-Fi router, feverishly trying to identify the sweet spot where the signal would reach everyone in my family. We had two parents, two kids, a too-crowded house, and all of us on the internet, all the time. It was a lot.”
The United States, contrary to liberal predictions of doom, enjoyed a boom in investment, a decline in consumer prices, and rapid increases in Internet speed since Pai repealed the Obama regulations. But Rosenworcel had a janky router, so ignore all that, right?
It would be easy to disregard this latest round of net neutrality as a non-issue, with overheated rhetoric on both sides but no real consequences. That would be a mistake. If we follow the path of heavy-handed regulations we will get less private investment, as we did last time.
The new proposal even explicitly reserves the right to engage in ex-post rate regulation, deciding after the fact that a company charged too much for a service. Who can invest with that threat hanging over their heads?
The FCC argues that it doesn’t matter because of the billions of taxpayer dollars from Biden’s infrastructure bill set to subsidize broadband, but companies will not accept tax dollars to build out networks if they are concerned that regulations will prevent them from reaching break-even on an ongoing basis after the subsidized build-out is complete.
Regulation will therefore result in many places where federal tax dollars flow to government entities to build government-owned networks, despite the fact these have historically been poorly run and racked up huge operating losses.
Worse, there is a real risk of slipping from taxpayer funding and economic regulation to content regulation, with the rationale that public networks must be regulated and managed in the public interest. Some net neutrality advocates have been open about that goal, such as Alex Lockwood, who argued for public-utility regulation of the Internet as a predicate for censoring “climate disinformation.”
The free-market approach that held sway from the commercialization of the Internet in the 1996 Telecom Act to the 2015 imposition of public-utility regulation under the banner of net neutrality was an overwhelming success, and its restoration after two years of the Obama rules resulted in another five years of success.
FCC Chair Rosenworcel should buy herself a good mesh router to deal with her Wi-Fi issues and leave the rest of us alone.