Will Obama and the FCC Break the Internet with Net Neutrality and Title II?
Last week, President Obama came out in favor of reclassifying the Internet under Title II of the Telecommunications Act. That's a tighter level of regulation than the current Title I and the switch is one of the rallying cry of many who are calling for Net Neutrality. Proponents of Net Neutrality and Title II reclassification contend that more regulation of companies such as Comcast and Time Warner is the only to keep the Internet as free and wide open as it has been…without such rules. Net Neutrality advocates are especially worried about "fast lanes" or "paid prioritization" in which some Internet services or customers would be forced to pay ISPs in order to make sure streaming video and other services get to users smoothly.
In a Time piece from last week, I argue that such fears are overblown. Snippets:
Let's leave aside the inconvenient fact that reclassification under Title II wouldn't actually prevent "paid prioritization" deals, that ISPs are constantly managing online traffic in all sorts of ways to keep users happy, and that the FCC's legal standing to regulate the internet is far from a settled matter. The real question is whether experiments in delivering content and services would necessarily be bad for the rest of us (I write as a Netflix subscriber, the editor of web and video sites, and an Internet junkie)….
The answer is no. Clemson University economic historian Thomas W. Hazlett defines Net Neutrality as "a set of rules…regulating the business model of your local ISP." The definition gets to the heart of the matter. There are specific interests who are doing well by the current system and they want to maintain the status quo via government regulations. That's understandable but the idea that the government will do a good job of regulating the Internet (whether by blanket decrees or on a case-by-case basis) is unconvincing, to say the least. The most likely outcome is that regulators will freeze in place today's business models, thereby slowing innovation and change….
According to the FCC's own findings, the speed and variety of American Internet connections are growing substantially every year. Despite claims that monopolistic ISPs don't have to listen to customers, 80% of households have at least two providers that can deliver the internet at 10Mbps or faster, which is FCC's top rating. It's in the increasingly intense battle over customers that a thousand flowers will bloom; all sorts of interesting, stupid, and dumb innovations will be tried; users will be empowered; and tomorrow's Internet will look radically different from today's.