What is Wrong With Net Neutrality?

Net neutrality. It sounds harmless enough, right? Wrong. Net neutrality is the Federal Communications Commission’s (FCC) misguided and misunderstood attempt to regulate the Internet. Net neutrality has taken many chameleon-like shades in the evolution to its current state, but its inherent dangers to the future of the Internet remain. Because of a recent Washington DC District Court decision concluding the FCC did not have the authority to regulate the Internet as it exists today, the FCC has embarked on a quest to reclassify broadband Internet service as it is today and classify it under an outdated monopoly era statute know as “Title II” of the Communications Act in which the FCC does have express authority over Title II services.

The FCC is concerned that broadband service providers will discriminate against content from competitors in order to more readily provide applications that would benefit them. Despite no evidence to this end, the FCC has been successful in generating the fear that without regulation, the Internet will change for the worse. The entire idea of introducing new regulations to preserve the already free and open nature of the Internet is paradoxical. Remember the old adage, “if it ain’t broke, don’t fix it?” The Internet is certainly not broken; in fact, it may be the “least broken” sector of our economy, with service providers investing billions of dollars into network infrastructure and innovations in the face of a recessive economy.

Investment, from both providers and private investors, is absolutely essential to the success and job creation of broadband Internet. If the FCC is successful, they would seek to introduce heavy handed government regulation into the best example of non-regulatory success that we know today, if ever. The introduction of abrupt and comprehensive regulation inevitably creates uncertainty, a cancer to investment. Doing anything to inhibit or deter investment is something we simply cannot afford in a recovering economy.

Furthermore, the road to Title II will be riddled with expensive litigations lasting for years. The legal mess from reclassification would push more important goals like bridging the digital divide and the National Broadband Plan back by years. Not to mention, I am not even sure that the FCC has the legal footing to accomplish reclassification. In fact, it was the FCC in the first place who wanted to cement the Internet as a Title I service in the Supreme Court’s Brand X decision (2005).

In the unlikely event that they are successful, legally, at proving this fact’s irrelevance, the Internet is inherently an “information service”. As outlined in the Brand X decision, “information services” generate, store, transform, process, retrieve, and provide information. Sounds like the Internet to me. Changing it to a Title II “telecommunications service” would mean classifying one of, if not the, most dynamic industries alive under the same regulations as the common carrier telephone regulation of the turn of the nineteenth century.

Frankly, network neutrality is really network over-regulation. Service providers already innately regulate themselves, otherwise consumers would go elsewhere. In as competitive an industry as broadband Internet service, it would be business suicide to discriminate against any content, applications, or devices demanded by customers. Heavy-handed regulation is not the answer. The answer is a rewrite of the Communications Act of 1996 with an additional section pertaining to the Internet. And this is the job of the U.S. Congress, not the FCC.

In 1996, cell phones were the size of bricks and computers were bigger than most New York studio apartments; I think it’s safe to say that things have changed for the better under the current regime. To proceed in the most responsible fashion, the FCC must concede the issue to Congress so that they can establish a new and relevant legislative framework that is hospitable to the dynamic growth of the broadband Internet sector of the economy.

David McClure is the president & CEO of the US Internet Industry Association (www.usiia.org), of which the Pennsylvania Telephone Association is a member. David has testified before the Pennsylvania General Assembly on broadband issues. Founded in 1994, USIIA advocates effective public policy for the Internet and provides its members with essential business news, information, support and services.