Net Neutrality: Market Competition or Political Control?

B Jessica Melugin of CEI.

"If net neutrality advocates are successful in their efforts to give government ever more control over broadband Internet access, they will be surprised to find you cannot regulate the world into perfection.

Supporters of various versions of net neutrality imply a false choice between a censored and curtailed Internet, controlled by unregulated broadband companies, and an ideal Internet utopia, flourishing thanks to federal regulations.

The real alternative to the light regulatory touch the Internet enjoyed during its first twenty years—one that admittedly left executives at Verizon, Comcast, and AT&T to figure out what consumers wanted—is an Internet experience controlled by unelected government bureaucrats and elderly politicians (the average age of a Representative is 57 and the average of a Senator is 61).

Does that sort of big government control strike anyone as a recipe for unfettered free speech and torrents of innovation? It shouldn’t.

Certainly, markets don’t deliver everything to everyone perfectly at all times. But as flawed as your broadband provider’s customer service or variable connectivity speed can be, it’s still better than dealing with the post office or the IRS.

That’s largely because, if it gets maddening enough, you can quit your broadband provider and switch to another one. Or at least most of us can: FCC data shows that 97 percent of census blocks had more than one provider offering at minimum 10 Mbps as of 2016. You don’t get the option to take your business elsewhere at the DMV.

It’s that consumer power in a relatively unfettered marketplace that’s driven the striking growth and improvement in broadband speeds and availability. Current Federal Communications Commission Chairman Ajit Pai noted in his 2015 dissent to the Open Internet Order that the United State’s light regulatory approach resulted in much faster speeds for consumers and more industry investment in wireline deployment than the utility-style regulation in Europe has produced.

Laying net neutrality regulations and restrictions on this dynamic industry will reduce the rate of returns for these broadband providers and, all else being equal, will lower investment, as Duke University Professor Michelle Connolly recently explained at an economist’s roundtable.

The Internet is no exception to the rule that markets work better than the federal government does. That should give everyone pause in the net neutrality debate."