Heavy-handed Internet regulation is suspect

See Why Download Europe’s Lousy Broadband Policy?: Treating the Internet like a utility has been tried, with deleterious effects on innovation and costs in the WSJ. Mr. Boucher, a former Democratic congressman from Virginia, is a partner at Sidley Austin LLP and honorary chairman of the Internet Innovation Alliance. Mr. Campbell, formerly chief of the Federal Communications Commission’s Wireless Bureau, is the author of the study discussed in this op-ed.

Excerpts:

"Europe has been experimenting with heavy-handed Internet regulation since 2002, and the results are a warning of what the U.S. can expect."

"Over the past two decades, the U.S. has benefited from a bipartisan, light-touch broadband regulatory regime that has spurred more capital investment, more competition and—perhaps most important—more broadband capacity than in the European Union, which has a larger population and similar economy."

"Fixed-broadband operators in the U.S. invested $137 billion in 2011 and 2012, more than four times Europe’s $31 billion over the same time period. U.S. mobile operators, at $55 billion, invested twice as much as their European counterparts’ $29 billion. Even when the comparison is made as a percentage of industry revenue, the U.S. investment advantage persists.

Europe’s “wholesale-access” regulatory regime, under which fixed operators must make their networks available to competitors at a regulated price, was ostensibly designed to promote competition. Yet in Europe, powerful incumbent carriers hold 65% of the local telephone market, while in the U.S. 59% of the local telephone market is served by new competitors. More than 90% of U.S. households can choose from among 10 or more providers."

"While 76% of American households have access to three or more fixed-broadband providers, in Europe less than 50% do. This is in large part because European investment has been so weak."

"82% of U.S. households have access to high-speed broadband, compared with 63% in the European Union."

"the highest-speed, so-called LTE networks. In 2012 only 30% of European households had access to LTE, while 79% of American households did."

"European regulatory example suggests that such an outcome is far from certain. It is more likely that imposing regulations crafted for last century’s monopoly telephone service will have a crippling and chilling effect on broadband investment."

"The European Union has wisely decided to pull back, recommending in 2013 that member-state regulators not impose wholesale-access prices on the deployment of next-generation networks,"