Net neutrality is important, but regulating internet as utility is too high a price

Federal Communications Commission (FCC) Chairman Ajit Pai took up one of the most consequential and far-reaching public policy fights in decades this May when he began rolling back a 2015 FCC order regulating the modern internet as a “Title II” service in the same manner as the telephone monopoly of the 1930s.

Title II rules were put in place as the legal framework by which net neutrality rules could be enforced. And while net neutrality or the “open internet”— where all online content is treated equally and not blocked or degraded—is critical to maintaining an equal and competitive internet landscape, Title II regulations do more harm than good. That is why reversing the Title II regulatory structure is critical to continue the evolution and expansion of internet networks and foster an environment where all Internet companies — regardless of their size or background — can thrive.

With more than two decades of experience designing and manufacturing consumer products that improve the Internet experience, Actiontec has witnessed firsthand that the best way to build a 21st century innovation-driven economy is by creating a public policy environment that fosters marketplace diversity among tech entrepreneurs.

However, when regulatory policies make it more difficult for entrepreneurs to succeed, it’s time to rethink them.

Seven years ago, investors rightly expressed concerns when the FCC began considering reclassification of broadband internet services as a public utility under Title II of the Communications Act. Title II shackles the internet with rules and regulations designed for the bygone era of the black rotary phone — rules that made sense in 1934 but not today.

In only a short time the rules slowed network investment. One report theorizes between $150 billion and $200 billion since 2010. Another by the Progressive Policy Institute estimates a 5.5 percent reduction of investment among the 12 largest ISPs in 2016.

These economic consequences confirm a clear reality: The internet is a competitive, dynamic industry. And unlike public utilities including water, electricity, and natural gas, it rewards innovation, forward thinking, and risk-taking.

This debate is relevant to entrepreneurs including certified Minority Business Enterprises (MBEs) like Actiontec because investments in the internet flow downstream. Less overall investment in internet networks negatively impacts small and medium-sized suppliers of internet software and hardware, and when that happens, entrepreneurs are hit particularly hard.

One group of 22 small ISPs confirmed this in a letter to the FCC in April stating that Title II, “affected their ability to obtain financing” and “slowed, if not halted, the development and deployment of innovative new offerings which would benefit our customers.”

Title II doesn’t impact just businesses and the economy; it also hurts consumers. Actiontec was founded to connect people to the internet, because the unfortunate reality is that communities with internet access enjoy disproportionately higher levels of success compared to their internet-void counterparts. But if investments go down, network buildout slows and keeps us from implementing additional internet access.

It’s important to remember that this heated debate is not actually about net neutrality. Net neutrality is a good concept with few opponents, and net neutrality violations are nearly impossible to find in the marketplace. Net neutrality can — and has —existed without Title II regulation.

The tech sector is full of disruptors with innovative ideas to change not only what consumers get online but how they get it. A large portion of those forward thinkers work for minorityowned enterprises like Actiontec. The best way to help them succeed is by creating an internet economy that continues to attract investment for years to come.