February 26, 2015

Net Neutrality Rules Represent a Giant Step Backwards

Brent Skorup

Senior Research Fellow
Summary

The Federal Communications Commission today voted, 3-2, that the Internet will be subject to many of the Title II regulatory provisions of the 1934 Communications Act. Applying Title II laws to broadband means regulating the Internet as a common carrier, akin to the telephone network, and gives significant control of the Internet to the FCC, lobbyists, and industry players.

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The Federal Communications Commission today voted, 3-2, that the Internet will be subject to many of the Title II regulatory provisions of the 1934 Communications Act. Applying Title II laws to broadband means regulating the Internet as a common carrier, akin to the telephone network, and gives significant control of the Internet to the FCC, lobbyists, and industry players.

The Title II order and new net neutrality rules have not been released yet, but the thrust of the regulations is clear from commissioners’ statements and media reports. In short, the FCC’s rules represent a giant step backwards to the days of command-and-control of markets.

The FCC’s actions derive in part from the myth that the Internet is neutral. In the evolving online world, the Internet gets less neutral—and better for consumers—every day. Through a hands-off approach from policymakers, the U.S. communications and technology sector has thrived as a supplier of innovation, but Title II rules effectively throw sand in the gears.

If the FCC’s rules are not overturned by the courts, the days of permissionless innovation online come to a close. The application of Title II means new broadband services must receive approval from this federal agency. Companies in Silicon Valley will therefore rely increasingly on their regulatory compliance officers, not their engineers and designers.

If courts do strike down the FCC’s net neutrality rules for a third time, the FCC should abandon its campaign to regulate the Internet. Instead the Commission should focus on increasing broadband competition across the nation, thereby reducing prices and increasing the availability of new broadband services. There is plenty of work to be done on this front, but pursuing Title II net neutrality rules distract the Commission and Congress from spearheading a pro-consumer innovation agenda.