May 15, 2019

Net Neutrality: “Hands Off” the Internet


KEY TAKEAWAYS

  • Contrary to the doomsday predictions from many Democrats, the internet has continued to thrive since the FCC’s 2017 Order to Restore Internet Freedom.
  • Broadband speeds are up, the private sector is investing in building the infrastructure to power the next generation of high-speed internet, and more Americans are gaining access to high-speed internet.
  • Consumers remain protected by the Federal Trade Commission, the nation’s main privacy and consumer protection agency. 

When Republicans moved in 2017 to restore common sense to regulation of the internet, many Democrats predicted the end of the internet as we know it. Not only has that not happened, internet service and access have improved. The argument has boiled down to which section of the law should govern internet service – and consequently whether it should be done with the heavy hand favored by Democrats or the lighter touch that Republicans say has successfully allowed the industry to innovate from the beginning.

Democrats’ Scare Tactics Flop

Schumer Tweet

Title I vs. Title II

The term “net neutrality” refers to the general principle that owners of the networks that provide access to the internet should not control how consumers lawfully use or access that network, and they should not be able to block or otherwise discriminate against consumers accessing lawful content. Access should be fair and neutral. Net neutrality has been a part of telecommunications reform discussions since at least 2002, when the Federal Communications Commission chose to apply a light-touch regulatory framework to the internet under Title I of the Communications Act of 1934. This built upon the Clinton administration’s general policy to take a “hands-off” approach to regulating the internet.  

Title I of the Communications Act applies to information services. It employs a light-touch regulatory approach intended to encourage innovation and investment. Much of the oversight power rests with the Federal Trade Commission and the Department of Justice, not the FCC. In contrast, Title II of the act applies to common carrier services. These service providers are much more rigorously regulated and are held to standards similar to utility providers due to the nature of their industries. Written in the 1930s and modeled on railroad regulations, many of Title II’s rules are written for the old “Ma Bell” telephone service and are hopelessly outdated and unworkable when applied to the internet.

2015 “Open Internet” Order: an fcc power grab

In November 2014, President Obama urged the FCC to issue rules that would “reclassify consumer broadband service under Title II.” Three months later, in February 2015, the FCC voted 3-2 along party lines to reclassify broadband internet access under Title II of the Communications Act. The decision was a reversal of nearly 20 years of bipartisan policy success.

In addition, the FCC gave itself the power to regulate conduct not specified under the rules, using a “general conduct” standard. The standard would allow the FCC to create new rules and regulations well beyond Congress’ original intent.

Combined, Title II classification and the vague “general conduct” standard are a regulator’s dream. For everyone else, including consumers, investors, innovators, and tech startups, they are a big-government nightmare.

republicans Restore Internet Freedom

In December 2017, the FCC, now under Republican control, voted to adopt a new regulatory framework for broadband internet services. It largely reversed the 2015 framework and shifted much of the oversight from the FCC back to the FTC and the Justice Department. The new policy removed broadband internet services from the more stringent Title II and returned them to the lighter-touch Title I approach that had been so successful. It also expanded and enhanced the existing transparency provisions.

The FCC found that “transparency, combined with market forces as well as antitrust and consumer protection laws, achieve benefits comparable to those of the 2015 ‘bright line’ rules at lesser costs.” More than 20 states responded by filing a joint lawsuit against the FCC. That litigation is ongoing.

Democrats preDict the sky is falling

Democrats and many on the left predicted dire consequences would follow the FCCs 2017 order, including that service providers would throttle or slow traffic.

  • “Without net neutrality when a couple is streaming their favorite Netflix show but it keeps lagging and killing the mood, who will be to blame?” – Minority Leader Chuck Schumer

  • “If we don’t save net neutrality, you’ll get the Internet one word at a time.” – Senate Democrats

  • “This is an egregious attack on our democracy. With this decision the internet and its free exchange of information as we have come to know it will cease to exist. The end of net neutrality protections means that the internet will be for sale to the highest bidder.” – Senator Bernie Sanders

PREDICTIONS WILDLY INACCURATE

Despite Democrats’ outrageous predictions, the internet has thrived since the FCC voted to back away from overregulation.

Speed – Fixed broadband download speeds in the United States rose 36 percent in 2018, and upload speeds increased 22 percent.

Access – The number of Americans with access to high-speed broadband with download speeds of at least 250 megabytes per second and uploads of 25 Mbps grew in 2017 by more than 36 percent, to 191.5 million. The number of rural Americans with access to such broadband increased by 85 percent in 2017. 

Jobs – One study predicted the 2015 order would have put as many as 174,000 broadband jobs at risk by the end of 2019.

Open internet – The major internet service providers have publicly committed to transparency, no blocking of legal content, no throttling, and no unfair discrimination.

Investment – After ISPs reduced new investments in 2015 and 2016, broadband investment increased in 2017 by $1.5 billion. In 2018, capital spending for the six largest broadband providers increased by another $2.3 billion.

Investment Rebounds

Net Neutrality

Source: U.S. Telecom

Achieving the generally agreed upon principles of net neutrality through top-down government regulation of the internet is a classic example of a solution in search of a problem. The internet thrived and grew under the Clinton administration’s general “hands-off” policy. This continued under the Bush administration in the years the internet was regulated under Title I. This bipartisan approach worked, and it will continue to do so.

Issue Tag: Technology