The Biden FCC Brakes the Internet With Net Neutrality

The agency revives Obama’s Title II regulation that slowed investment and kept broadband prices high

WSJ editorial. 

"Remember when progressives said the Trump Administration’s rollback of net neutrality would break the internet? Federal Communications Commission Chair Jessica Rosenworcel now concedes this was wrong, yet she plans to reclaim political control over the internet anyway to stop a parade of new and highly doubtful horribles. 

The FCC on Thursday is expected to vote to reclassify broadband providers as common carriers under Title II of the 1934 Communications Act. This will let the commission regulate providers like AT&T, including by fixing prices and micro-managing network investment. Why does the FCC need this power?

She concedes that providers don’t block, throttle or charge more to speed up sites. Yet this was the justification for the Obama FCC’s Title II power grab. Ms. Rosenworcel’s new justification is that “loopholes” in FCC oversight have left the internet vulnerable to national-security, cyber-security and privacy threats. This is ridiculous, and she knows it.

The Biden Administration notes in an FCC filing that U.S. security agencies already have and “exercise substantial authorities with respect to the information and communications sectors.” The FCC draft order lists the numerous authorities the FCC has to restrict the equipment of such foreign-controlled companies as Huawei in broadband networks.

Title II doesn’t grant the commission new national-security authority. Nor does it grant new tools to bolster cyber-security, which is the purview of the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency.

Reimposing Title II would ironically create a privacy loophole for broadband providers by stripping the Federal Trade Commission of oversight. A 2017 Congressional Review Act resolution overturned the Obama FCC’s broadband privacy regulation, which prevents the commission from re-imposing such rules.

The draft order doesn’t argue that the FCC needs Title II to protect Americans, only that it “furthers” and “enhances” the FCC’s existing power with “a broad grant of rulemaking authority to ‘prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this chapter.’”

In other words, Ms. Rosenworcel is reimposing Title II because she wants sweeping political control over the internet. The draft order even floats the possibility that the FCC could use Title II to ensure “residents of apartment buildings can choose their own broadband providers.” Does she plan to intervene in condo disputes? The draft order says the agency will “forebear” from applying most of the hundreds of Title II authorities for now. Yet it leaves the door open to applying them in the future.

Provider practices that interfere with the government’s “digital equity” goals could be deemed unlawful. The order reinstates a vague “no-unreasonable interference or disadvantage standard” that lets the FCC “prohibit practices that unreasonably interfere” with and cause “harm to the open Internet.”

What are such unreasonable practices? Carriers will find out when the FCC prohibits them using a “case-by-case review” and “multi-faceted enforcement framework comprised of advisory opinions.” In other words, the decisions will be up to bureaucratic whim. To minimize legal risks, providers will have to ask FCC permission to do almost anything. This will create enormous regulatory uncertainty that will slow innovation and investment. After the Obama FCC imposed Title II, broadband investment fell for the first time outside of a recession.

That changed after the Trump FCC scrapped the Obama rule. Investment and access to high-speed Internet surged. By the end of 2019, 94% of Americans had access to high-speed fixed and mobile broadband, up from 77% in 2015. In 2022 broadband builders laid more than 400,000 route miles of fiber, more than 50% more than in 2016.

Prices fell with more competition. A study by Casey Mulligan and Phil Kerpen for the Committee to Unleash Prosperity found that, from September 2017 to September 2023, the price index for wired internet services fell 11% compared to the overall consumer-price index. The CPI for wireless fell 21% in real terms. The biggest winners from this price decline were low-income households, which pay a higher share of their earnings on broadband.

There’s no legal, economic or equity justification for Ms. Rosenworcel’s pending power grab. It will slow the spread of 5G access. This diktat is all about asserting political control over more of the private economy—no matter the consequences."