REGS ALSO HURT CONSUMERS

‘Net neutrality’ debate is not a David vs. Goliath situation

THE Federal Communications Commission has voted to roll back Obama-era “net neutrality” rules that declared internet service providers to be public utilities subject to Title II of the federal Communications Act of 1934, even though that law was designed to address phone monopolies and was based on the even more antiquated Interstate Commerce Act of 1887 that regulated railroads.

Opponents of this move often suggest big online businesses will now run roughshod over the little guy. That’s ironic, since the Obama rule was supported by some of the nation’s largest companies for reasons far removed from altruism.

For example, the Internet Association supported the Obama administration’s rules. Its membership includes Facebook, Google, Amazon, Microsoft, Netflix and Uber. Those aren’t exactly “mom and pop” shops.

While business officials can and do offer useful critiques of proposed regulations, one shouldn’t automatically assume large businesses are always taking a proregulation position out of concern for the public good.

In 2014, Netflix CEO Reed Hastings gave the game away when he called for federal officials to subject internet service providers to heavier regulation that would “prevent ISPs from charging a toll for interconnection to services like Netflix.” And he went so far as to say the FCC should require ISPs to provide Netflix “sufficient access to their network without charge.” Without charge.

In short, much of the debate over net neutrality was the desire of some large companies to use the federal government to inflate their profit margin at the expense of other large companies.

As Andrea O’Sullivan, program manager for the Technology Policy Program at the Mercatus Center at George Mason University, noted in Reason magazine, “By encouraging harsh regulation of ISPs that effectively controls the rates that major tech companies can be charged for bandwidth, these companies are engaging in a kind of regulatory capture.”

The problem with letting Peter rob Paul in this fashion is that Paul has less money to put to good use. That proved true of ISPs under net neutrality rules. The country’s 12 largest internet service providers decreased domestic broadband capital expenditures by 5.6 percent, or $3.6 billion, from 2014 to 2016. Prior to net neutrality, such decreases had only occurred during recessions.

In 2015, officials warned the House Judiciary Committee that net neutrality would reduce investments to expand high-speed internet service in rural areas.

The “mother may I” regulations also had adverse impact on consumers. After passage of the net neutrality regulation, the Obama FCC sought to prohibit things like free-data programs that allow unlimited streaming, a service especially popular with lowerincome citizens. In 2014, the left-leaning Progressive Policy Institute warned that imposing cumbersome Title II regulations on internet providers would mean that “U.S. consumers will have to dig deeper into their pockets to pay for both residential fixed and wireless broadband services.”

Of the many falsehoods aired in the “net neutrality” debate, the claim that this is a purely “David vs. Goliath” fight may be one of the biggest.