Federal Communications Commission Chairman Ajit Pai's announcement that he will soon begin the process of rolling back the 2015 Title II Order, which exposed the Internet to a vast regime of regulations, was a welcome response to an all-too-typical exercise in regulatory overreach: Instead of addressing actual harms and real market failures, regulatory schemes are invented to prevent hypothetical harms that could happen, maybe, one day.
Chairman Pai released his plan for public comment on repealing the so-called net neutrality rule, which reclassified internet service providers as common carriers well ahead of the May 18 hearing and has committed to an open process.
The FCC claimed broad authorities under Title II to dictate the appropriate network management practices for Internet service providers. That federal overreach placed the Internet into a vast and archaic regulatory regime designed in the 1930s for telephone monopolies. The move signified a massive swing in the government’s approach to Internet regulation.
Dating back to the Clinton administration, the federal government had taken a “light-touch” approach to Internet regulation, and the net flourished. In the span of a mere 20 years, hugely successful companies such as Google and Facebook developed and American consumers benefited from incredible innovations. Unencumbered, the private sector made more than $1 trillion in investments and gave us high-speed and wireless Internet access.
But things changed in 2015. As Chairman Pai noted in his announcement, net neutrality rules “put the federal government at the center of the Internet.” Rather than ensuring an open and competitive market, the government’s heavy hand would pick winners and losers and subject Internet service providers to a bevy of regulations and fees.
Title II’s ban on paid prioritization, which prevents service providers from charging different rates for different types of content delivery, makes about as much sense as declaring that all packages must be delivered on the same schedule, even if you’re willing to pay more to get it there faster. The ban stifles innovation. Perhaps worse, it’s not even applied equally, since specialized services are exempted from it.
As the certainty and freedom of the light-touch approach disappeared, investments in network infrastructure declined for the first time (outside of a recession) ever. Not surprisingly, competition weakened and the consumer suffered.
Title II regulations have come at the expense of consumer benefits. Until earlier this year, under the guise of net neutrality, the FCC was investigating wireless companies for providing service plans that allowed unlimited streaming using certain platforms. The practice is sometimes called “zero rating” and it allows consumers to get some data, such as music and videos, without it counting toward their data caps. Most consumers would call that a benefit.
Chairman Pai ended the investigation, and predictably major carriers began announcing new unlimited data plans. When the government stops meddling, freedom and competition abound and the consumer benefits.
To top it all off, the disruption caused by Title II was completely unnecessary. The rules were premised not on actual harms or market failures, but on potential harms that might materialize.
This mindset of preemption plays on fear. It is the opposite of permissionless innovation and highlights federal bureaucrats’ tendency to overreach. In this case, they believe regulations developed for 1930s monopolies are appropriate to rule the technology of the future.
Those who truly care about an open internet and increasing broadband deployment, innovative technologies and services, competition and consumer choice, will be happy to see the end of Title II.
Paige Agostin is a senior policy analyst at Americans for Prosperity.
The views expressed by contributors are their own and are not the views of The Hill.