To Boost Innovation, FCC Should Roll Back Net Neutrality Regulations


This week, Federal Communications Commission Chairman Ajit Pai is expected to discuss plans for rolling back Obama-era rules on net neutrality, alleviating the Internet landscape from unneeded regulations that hamper innovation and competition.

The Competitive Enterprise Institute’s Ryan Radia said the following about the possible announcement:

Over the past decade, the FCC has sought to transform itself into the Internet’s regulator in spite of a clear directive to the contrary from Congress. Now, under Chairman Pai, the agency is poised to finally follow the law by reversing its 2015 decision to regulate broadband providers as public utilities. The rigid rules that now govern Internet providers forbid an array of business models that could benefit consumers, from prioritizing time-sensitive Internet traffic to cutting deals with Web startups to exempt them from data caps. Some established companies that rely on the infrastructure built by broadband providers would prefer that the government maintain the status quo—but freezing today’s Internet in place, with all its shortcomings, will preclude the experimentation and bargaining among companies that causes markets to progress.
Defenders of the FCC’s 2015 rules lament that there’s too little competition among broadband firms. But to the extent that such choice is limited, overregulation is the cause of the problem, not the antidote to it. Moreover, if a broadband provider were to block a popular website or platform, its customers would seek out rivals in droves—and investors would follow suit. And despite the FCC’s recent excesses, wireless providers are closing in the cable and phone companies through which consumers have traditionally accessed the Internet at home.
Unfortunately these possible moves will not end the fight over net neutrality. A never-ending game of regulatory ping pong where the winner changes every four or eight years serves no one. Resolving this battle will require Congress to rewrite the nation’s telecom laws, phasing out the FCC’s many functions that can be better sorted out by markets or courts. Otherwise, broadband providers will soon look and act like the old Ma Bell telephone monopoly: stagnant, entrenched, and anything but innovative.

For more on net neutrality see the Technology and Telecommunications chapter in CEI’s Agenda for the 115th Congress.