Repealing Net Neutrality Is Actually Good for the Internet


Repealing Net Neutrality Is Actually Good for the Internet

Jan 4, 2018 2 min read

Former Senior Research Fellow in Regulatory Policy

James Gattuso handled regulatory and telecommunications issues for The Heritage Foundation.
The real world danger to the internet is too much government interference, not too little. iStock

A post widely circulated on social media purports to show the prices various internet content providers will charge consumers now that the FCC’s network neutrality rules have been repealed.

The text is quite specific: A Google search will now set you back $1.99 per query; Twitter will cost $14.99 per month; Netflix will cost $9.99 per movie, and so on.

The charges would be an outrage if true — but they are not. The “price list” is fabricated out of whole cloth, a complete fantasy.

The fictional price list, however, is only the most obvious of untruths being spread in the backlash to the Federal Communications Commission’s repeal of its 2015 network neutrality rules. These rules barred internet service providers — companies such as Verizon, Comcast, and T-Mobile — from offering different service levels to the content providers using their networks.

Regulating this activity via the FCC is one of those ideas that sounds good in the dorm late at night, but makes no sense in the light of day. For instance, the rules specifically ban “paid prioritization,” which means charging more for better services, or less for service that is more limited. But what’s wrong with that? Most every market in America uses discounts and premiums. Try buying an airline ticket, gas for your car or even new clothes, and you will find this kind of “discrimination.”

In the case of net neutrality, the rules make consumer prices more — not less — likely to rise. That’s because the rules apply only to the backend connection between ISPs and content providers. That makes it harder to make content companies pay for the costs they impose — leaving the consumer to carry the load.

But, the defenders of regulation assert, without FCC restrictions the big corporations would be able to do whatever they want, driving the little guys out of business.

Another fantasy.

First, the neutrality rules make no distinction between “big” and “little” companies. Some of the largest firms in economic history — Google, Amazon, Facebook — are longtime supporters of the restrictions. Conversely, smallish challengers like T-Mobile and Sprint find themselves subject to the full force of the rule. This makes no sense.

Moreover, the idea that the big companies will — without the constraints of FCC regulation — ride roughshod over the broadband market is simply one more fantasy. Network neutrality — despite the pinkie swears of its eager supporters — is not a long-standing rule of the internet. It was imposed only two years ago. The explosion of creativity, innovation, access and choice on the web did not begin suddenly since 2015. In occurred not — as the fantasists would have you believe — as a result of FCC ISP restrictions — but in their absence.

At any rate, with or without neutrality rules, there have been virtually no cases of abuse by the internet service providers. Despite years of scrutiny, the only clear case of market impropriety involved a small, rural telephone company, which blocked internet traffic for a few days in 2004. And the FCC stopped the blocking almost immediately. Other claimed violations — such as Comcast’s slowing of “bandwidth hogs” and T-Mobile’s plan to offer to waive data caps for content from certain content providers — are not abuses of consumers, but benefits for them.

If problems should arise in the future, antitrust regulators will be able to address them — as they do in almost every other industry. Bizarrely, the just-repealed FCC rules took the antitrust regulators out of the picture. With the rules now gone, these competition cops are back on the beat.

Proponents of network neutrality are taking the public on the policy equivalent of Mr. Toads Wild Ride. But the internet — while fantastic in so many ways — is not Fantasyland.

The real world danger to the internet is too much government interference, not too little. The FCC’s repeal of these ill-conceived rules is a welcome step.

This piece originally appeared in The Orange County Register