WHY DEREGULATING INTERNET SERVICE MAKES SENSE
Everyone enjoys watching cat videos on Facebook, but hardly anyone understands Title II of the Communications Act of 1934. That’s the challenge in assessing the Trump administration’s pending decision to deregulate internet service. It’s a very important step involving complex technology questions, arcane rules and a jargony phrase that’s tossed around a lot but isn’t easy to interpret: net neutrality.
Yes, animal videos are more fun to think about. But like all major government efforts to deregulate industries, from telephones to airlines, the Federal Communications Commission’s move to do away with net neutrality is destined to have a major impact. We think consumers will benefit because increased competition is a greater spur to technological innovation than government fiat. In other words, you’re not still using an avocado-colored 1970s telephone, right?
This is not to minimize the uncertainty of cutting the cord on net neutrality. There’s a lot of concern, especially among Democrats, that deregulating internet communications is going to hurt consumers. The fear: Internet providers (cable companies and wireless carriers) will usurp control of bandwidth for their own benefit. They’ll speed up and improve the transmission quality of websites they control and charge more to guarantee high speeds, while slowing down everything else. So pay up or enjoy the buffering. To conclude the argument in favor of net neutrality, what’s vital to citizens and key to innovation is the digital services everyone accesses via computers, phones and other networks. By this thinking, the actual piping is akin to a regulated water or electric company. It should be maintained as neutral territory.
We guess that would make sense if we believed we’ve reached a point of maximum progress and our main concern, as with an electric utility, is keeping the lights on. But that doesn’t strike us as anything near the reality. Digital technology is still a new, evolving industry, more like robotics or bitcoins than water service. Think about driverless vehicles, wearable health monitors and other internet-abled innovations coming to fruition. The emphasis needs to be on encouraging scientific discovery and commercial discovery, while incorporating safeguards against exploitation.
How to do that?
FCC Chairman Ajit Pai says CEOs, investors and entrepreneurs are in the best position to invent and give consumers what they want, so they should be allowed to compete. “The No. 1 issue that I hear about is that people want better, faster, cheaper internet access,” Pai told The Wall Street Journal earlier this year. “They want access, period. To me at least, that’s the question the FCC should be squarely focused on: What is the regulatory framework that will maximize the incentives of every company to deploy the next generation of networks?”
The FCC is scheduled to vote on internet regulation Dec. 14. With two other Republicans also on the commission, it appears Pai’s decision to end net neutrality will carry the day. This means internet providers will be able to negotiate payment from larger bandwidth users such as Netflix or Hulu, and offer different price and speed packages to consumers. Competition will spur investment and innovation while offering more choice, just as in airlines and other industries.
Two important points to keep in mind: First, deregulation will not usher in a digital chaos. The FCC and Federal Trade Commission will still have oversight responsibilities. Second, net neutrality is a new concept promulgated by the Obama administration. The internet operated without these restrictions previously without adverse effects. If deregulation doesn’t work, it can be modified or reversed. Congress also can weigh in.
But let’s give innovation and competition a chance. Anyone who claims to know exactly how this proposal plays out, and who’ll win and lose, is relying on preconception. Deregulation could be the best thing since cat videos.