Throughout the relatively short history of the internet, the guiding philosophy of the government has been mostly to keep its hands off. Regulation of internet service providers has been practically nonexistent, and thatap worked pretty well so far.
Some might say spectacularly well, in fact.
But if last week’s ruling by a federal appeals court stands, those days are over. Internet service providers will be regulated like a public utility — like phone companies or power utilities.
This change comes as part of a years-long effort by the Federal Communications Commission to put in place rules enforcing “net neutrality,” forcing broadband service providers to grant equal access to customers and content providers regardless of the amount of bandwidth they use.
Legitimate concerns animate net neutrality proponents — broadband providers could block access to competitors, silence voices that disagree with them and slow access speeds in a way that hampers new businesses trying to make inroads online. But, as Judge Stephen Williams noted in his lengthy dissent in the 2-1 ruling, there’s little evidence that the problems net neutrality purports to solve have actually been experienced by anyone.
In fact, the judge warns that enforcing net neutrality could stifle innovations by broadband service providers. Increased regulations could “replace the virtuous cycle with a vicious cycle, in which regulatory overreach reduces the number and quality of services available, reducing demand for broadband, and in turn reducing the content and services available owing to the reduced number of users.”
The point that net neutrality proponents overlook is this: Bandwidth is neither unlimited nor free. If demand by Netflix and its users strain the existing infrastructure, someone must pay to add more capacity.
If federal regulators decide broadband providers can’t charge Netflix or its users for paid prioritization, then the cost of keeping up with demand is spread unfairly — or the demand won’t be increased and everyone’s experience will suffer.
And although the FCC insists it doesn’t intend to institute overall price regulation, the political pressures over time to do so could be irresistible.
The FCC’s decision upheld in this case is drastic. It could have plentiful unforeseen consequences that might hamper innovation, degrade service and reduce investment in an industry that has become vital in commerce and other important areas of American life.
The FCC has taken this step in the absence of demonstrable need and without a full consideration of the potential costs. If broadband providers are treated and regulated as utilities, they will be far more cautious in how they do business, knowing that a federal agency can second-guess them.
The courtap ruling is unfortunate and should be appealed. It would be far better for Congress to look into updating the Telecommunications Act of 1996 to address the legitimate concerns of net neutrality proponents without saddling internet providers with a regulatory scheme designed for an entirely different era.
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