Jimmy Kimmel, Net Neutrality, and Why the FCC’s Control of Speech and Broadband Must End

The murder of conservative political activist and author Charlie Kirk sent shockwaves through the United States because it showed how fragile freedom of speech is in the United States. A few days after Kirk's murder, comedian Jimmy Kimmel joked on his late-night show that Trump supporters were trying to paint Kirk's murderer as liberal to score political points. It does not matter that Kirk's murderer was indeed on the Far Left. The Trump administration did not appreciate Kimmel's jab. Federal Communications Commission (FCC) Commissioner Brendan Carr threatened ABC's network broadcasting license. One could argue that this move is hypocritical considering that in 2019, Carr said that "the FCC does not have a roving mandate to police speech in the name of the 'public interest.'"

A day later, ABC suspended Kimmel. The suspension was lifted a few days later. Kimmel came back on the air to talk about using anti-American tactics to suppress freedom of speech. While I do not appreciate threats from the FCC, I also have to question Kimmel's sincerity about freedom of speech when he cheered on the cancellations of President Trump from Twitter, Roseanne Barr, or Tucker Carlson. Whether Kimmel came around on the First Amendment and realizes that he took it for granted or his passion for freedom of speech only extends to himself and those who agree with him remains to be seen. Irrespective of whether Kimmel became a free speech advocate after being suspended, this suspension debacle brings up a question about freedom of speech and the FCC's role in broadcasting regulation. 

For those of you who think that FCC censorship is some unprecedented move with President Trump, it truly is not. The government has exerted its top-down control of the airwaves since the 1927 Radio Act, which predates the creation of the Federal Communications Commission in 1934. Shortly after the FCC's founding, President Franklin Roosevelt used the FCC to target and silence conservative broadcasters who opposed his New Deal. That is one of the many reasons I dislike what FDR did during his presidency. If the modern Left cannot tolerate Trump criticizing journalist or using the FCC to imply ABC loses its license, then surely they cannot ignore how FDR wielded the FCC in an authoritarian manner. Regardless, the FCC's abuse did not stop with FDR.

In 1943, the Supreme Court ruled in NBC v. United States that the government can regulate network broadcasting practices to prevent monopolies and ensure that they served the "public interest, convenience, or necessity." We would never allow for the government to monitor our phone calls to determine if our conversations are fair, balanced, or responsible. Yet that is exactly what this court case allows the FCC to do with public communication. 

While the "Fairness Doctrine" started in 1949, it was particularly used by Presidents Johnson and Nixon to target critics of their policies. Nixon was the most blatant abuser by using license challenges as leverage to get broadcasters to back off on criticizing Nixon. This Doctrine remained in place until Reagan eliminated it in 1987. These examples show that politicization of the FCC is not a recent phenomenon, but rather a recurring feature in FCC history. Because NBC v. United States has not been overturned, the FCC still retains those broad powers to this very day. 

The same 20th-century mindset of media being scarce and the public needing gatekeepers also underlies what I discussed last month with taxpayer funding for such outlets as NPR and PBS. When airwaves were limited and national programming was costly, public media had a stronger case relative to now. However, in a world of podcasts, YouTube, and livestreams, the idea that the government should bankroll a certain media outlet is outdated. We did not need a state-approved version of "quality content" then, and we sure do not need it now. Regardless of whether it is through regulation or subsidy, the belief that speech needs Big Government to guide it is both misguided and dangerous, even more so in a digital age. 

What makes the FCC more onerous is not simply what is being said, but it seeks to control how information flows in the digital age. The net neutrality debate is a prime example of the FCC exerting that control. What net neutrality ends up being is a one-size-fits-all mandate that degrades broadband quality, reduces innovation, and undermines the very decentralization that made the internet a haven for free expression. 

Net neutrality is a government mandate requiring internet service providers (ISPs) to treat all online content equally, regardless of source, type of bandwidth demand. While presented as a way to level the playing field, it is a backdoor for the FCC to control online discourse. By dictating internet traffic be treated equal, the FCC statutorily places itself as the arbiter of what constitutes "fair" access. This is because the FCC has used "reasonable network management" in its 2010, 2015, and 2024 Open Internet Orders. Combined with vague definitions of what constitutes as "reasonable" with the precedent NBC v. United States ruling, it would give regulators the legal ambiguity and institutional cover to micromanage internet traffic under the guise of neutrality. Similar to how the FCC has suppressed dissenting voices on the radio and television, net neutrality opens the door for similar abuses on the internet. 

If it was not enough that net neutrality has implications for the First Amendment, its impact on broadband service is equally disconcerting. This was something I explored in further detail last year. Net neutrality does not level the playing field or improve broadband services. Because it operates under the outdated Title II regulations, it wrongfully treats the internet as a public utility, which I argued in 2017. As a result, it discourages private investment in broadband and stifles innovation. Ultimately, net neutrality translates into slower and less reliable internet. Instead of government heavy-handedness, the internet needs a market-centric approach if we want faster and more accessible internet for all. Thankfully, the Sixth Circuit court reversed the Biden administration's most recent attempt at net neutrality. The fact that these court cases need to be have due to these power grabs show how much power has been granted to the FCC.

The FCC was created for a different world. We do not live with a media landscape that has limited bandwidth, top-down broadcasting, and government-engineered fairness. Our information ecosystem is fast, global, decentralized, and wildly abundant. Yet the FCC operates with a mindset that there are only three main television stations and Franklin D. Roosevelt still sits in the White House. Whether it is censoring content, dictating how ISPs route traffic, or overseeing digital speech, the agency treats the flow of information as something to be managed in a top-down fashion. This approach is a threat to both liberty and innovation.

This is not merely a matter of outdated bureaucracy using frameworks and regulations that no longer fit today's ever-evolving media landscape. It is a more profound issue on how government shapes speech. It does not matter if you agree with Kimmel or not. Political disagreements should be settled with speech and in the intellectual marketplace, not through state intimidation or licensing threats. While I have criticized Left-wing cancel culture extensively (see here, here, here, and here), this is a disturbing trend in the political Right adopting that same authoritarian impulse. Using the FCC to silent dissent is the exact sort of tactic that Charlie Kirk would have opposed and is probably having him roll over in his grave as we speak. The Right should not succumb to these tactics because free speech is one of those core values that we should uphold in a modern, democratic society. 

It is not simply because the government is prone to abusing its power to regulate freedom of speech. The government has set the dangerous precedent that our freedoms, including the freedom of speech, is something that the government gives us, rather than being something they have no right to take away in the first place. Both the Left and Right need to remember that the power to silence your political opponents today could be used against their side in the future, and often more aggressively and with fewer restraints. The fact that speech has had this much oversight from the FCC is surreal. The FCC does not merely need reform. Whether it is because of freedom of speech concerns or practical ones, it needs to meet its demise to make speech free again and make sure everyone has high-quality access to broadband services. 

The FCC Restoring Net Neutrality Is More Unnecessary Than Ever

The Biden administration continues its quest of reviving subpar, useless policy ideas. Earlier this month, it was student loan "forgiveness." Last week, the Federal Communications Commission (FCC) restored net neutrality by reclassifying the internet as a Title II telecommunications services. 

Net neutrality is the idea that internet service providers (ISP) should treat all internet traffic equally. It entails the prohibition of charging different rates or offering different service levels for those using services that require more data (e.g., YouTube, Netflix). Looking at the economics of net neutrality, net neutrality is another form of price regulation that mistakenly treats broadband internet as if it were a monopoly. Price differentiation exists in multiple markets, including gasoline, clothing, and airline tickets. Why should internet be any different?

There were dire predictions that ended up not coming true with repealing Title II classification, including the creation of an ISP cartel, as well as rampant censorship and loss of privacy.  Repealing net neutrality did not mean the end of internet as we know it. Here are some examples of what happened during the implementation of Title II in 2015 and after its 2017 repeal:

• Improved broadband access. By the FCC's own admission, the pace of providing Americans with access to fixed terrestrial broadband and mobile broadband was nearly three times slower under Title II. 
• Improved broadband services ranking. According to the consortium M-Lab and its global broadband ranking, U.S. broadband went from being ranked 20th in 2017-18 to being ranked 12th now. If repealing net neutrality were that horrid, U.S. broadband would not have risen on the global stage. 
• During the pandemic, streaming service usage surged. In the United States, streaming services fared well and actually stayed stable in spite of growing demand (Kovacs, 2020). Contrast that with the European Union, which has had its own version of net neutrality. During the pandemic, the European Union had to ask Netflix and YouTube had to downgrade their streaming quality so the internet did not collapse in Europe. 
• Broadband innovation. Those in favor of net neutrality thought that net neutrality would kill innovation, even though the American Enterprise Institute examined 53 countries to find that net neutrality does not spur innovation (Layton, 2017).
• Increased broadband investment without net neutrality. A study of 32 OECD countries found that net neutrality regulations slow down the investment and development of new fiber-based broadband connections (Briglauer et al., 2023).
• Faster download speeds in the United States and effects on throttling. There was no statistically significant impact on throttling of internet services in the United States within a year. If anything, FCC data show that download speed increased between 2018 and 2021. 

• Fast download and upload speeds in comparison to other countries. A 2022 Phoenix Center study shows that the United States has faster download than other countries, as well as comparable upload speeds to other developed nations (Ford, 2022). 

Postscript: It is not simply the irony that the administration pushing for net neutrality is the same administration being accused of coercing social media platforms to remove what the administration deemed unfavorable content that I find frustrating. It was little wonder that I was happy when the Title II classification was removed in 2017. Net neutrality does nothing to spur innovation or protect consumers while slowing internet speed. I can only hope that either the next administration overturns Title II classification or that the federal courts overturn it. 

Repealing Title II Classification: Scaling Back Net Neutrality As a Right Step Towards Internet Freedom

Last week, the Federal Communications Commission (FCC) took a swing at the net neutrality laws by releasing its draft order entitled Restoring Internet Freedom. If the FCC successfully votes on this next month, this Order will roll back the net neutrality laws that were enacted in 2015 under President Obama. Net neutrality proponents are bemoaning the possible end of the Internet, whereas opponents are cheering for Internet freedom. Since we live in a world prone to polarization and hyperbole, it's nice to revisit and refine arguments, so here are some points to consider as we approach the FCC's vote:

1. Title II is not the same as net neutrality. Although defining net neutrality is seemingly elusive, the best definition I found was "the government and Internet service providers providing equal treatment of all data contents, and Internet sites." You can read the piece I wrote on net neutrality three years ago here for further details and analysis. What was done during the Obama administration went beyond this definition of net neutrality. In 2015, the FCC decided to classify Internet under Title II classification. Title II is a classification per the Communications Act of 1934 that categorizes a service as a public utility. The current FCC is looking to repeal this Title II classification and return it to pre-2015 laws. I wrote on Title II classification in early 2015. I thought back then that is was a bad idea to treat the Internet like a public utility, least of all because the Internet is not a public utility nor does it function in a monopolistic market. In its policy brief on Title II (Mayo et al., 2017), the McDonough School of Business at Georgetown University illustrates how Title II makes the Internet less competitive. As the American Enterprise Institute explains in its article on net neutrality versus Title II, repealing Title II does not mean the end of net neutrality, let alone the Internet. The Internet was evolving well before the Title II classification came along in mid-2015. 
2. Net neutrality is basically a solution in search of a problem. The Internet "as we know it" was built without the Title II regulations, and did well without Title II. This is not to say that there has never been anticompetitive behavior. However, the instances of blocking or slowing down service are few and far in between. When attempting to justify net neutrality back in 2010, the FCC was only able cite four examples of anticompetitive behavior, all relatively minor (FCC, 2010, p. 17925). As the Heritage Foundation illustrates in detail, many of these cases involved challengers introducing practices that could have lowered prices for consumers. 
3. The government still has ample oversight. Net neutrality proponents provide a scary hypothetical in which ISPs block content from its competitors. Think of it as a "Wild West of the Internet" scenario. As elucidated upon in the previous point, net neutrality violations are rare. Even if the FCC stepped aside completely from regulating the Internet, the Federal Trade Commission has both the authority and knowhow to stop unfair practices (see 15 U.S. Code §45). State-level Attorney Generals also can enact their own antitrust and other consumer protection laws. 
4. Influence on telecom infrastructure investment. Research suggests that in anticipation of classifying the Internet under Title II, telecommunications companies did not invest as much capital expenditure (Ford, 2017). George Washington University economist Hal Singer estimated that ISP capital expenditures declined by $3.5B since Title II became law. Assuming that Title II had an adverse impact, removing should incentivize telecommunications companies to invest more. 
5. Price Discrimination versus Price Differentiation: Increasing Competitiveness. California Representative Ro Kahanna tweeted an infographic to illustrate the importance of net neutrality. Ironically enough, he showed how repealing net neutrality would help. Why? Because it undermines the pro-net neutrality argument. The proponents complain because charging separately will drive up prices. Let's say that I don't want to have to pay for gaming services. Instead of paying for all services, I can opt not to pay for gaming services, thereby decreasing my Internet bill. By allowing for separate charges, broadband providers can provide customers with more personalized offerings and packages. We have already seen this price differentiation play out in the mobile phone market (Greenstein and Mazzeo, 2006). 

Postscript: The FCC is more than justified in repealing Title II classification. This repeal does not mean the end of net neutrality. Even if it did, there is more than ample reason to believe that net neutrality makes for unsound economics (also see here, here, and here) that does not help the consumer (Gans and Katz, 2016; Melugin and Radia, 2017). Based on the lack of anticompetitive behavior from ISPs and broadband companies, there is a lack of ex ante justification for net neutrality (Struble and Kane, 2017).

What will help out many of the issues brought up by net neutrality proponents is more broadband competition. Instead of supporting local broadband monopolies, the government should get out of the way and allow for more broadband deployment. When compared to the European market, the light-touch approach to broadband regulation has worked well in the United States (see Harvard Business Review article here). The Title II regulations are a major barrier to Internet competitiveness and freedom, and I hope the FCC repeals Title II classification for the Internet next month.

The Folly & Futility of Classifying Internet as a Utility Under Title II

The Federal Communications Commission (FCC) recently confirmed that it was going to vote on net neutrality rules later this month on February 26. The chairman of the FCC wants to use Title II of the Communications Act of 1934 to protect the Internet. For clarification's sake, Title II classification is not the same thing as net neutrality. As I had explained a few months ago, net neutrality is the idea that all data, platforms, and sites be treated equally by the government and Internet service providers (ISPs). This is about as close as a consensus definition to which one can reach. Title II classification, I'm afraid, is much more overreaching than that. Title II classification would categorize the Internet as  a telecommunication service provider instead of a broadband service provider. Aside from using a 81-year old piece of legislation initially intended for the telephone industry to regulate something as non-analogous as the Internet, why do I have an issue with Title II classification?

If I had to summarize up my annoyance, it would be that the Internet is not a public utility, nor should it be treated as such. A public utility is based on the idea that a certain good falls under a natural monopoly. A natural monopoly is when it makes more economic sense, at least in terms of long-term cost, to have one company managing a certain market than it is to have a competitive market structure. Although there are some economists who think that natural monopoly theory is bunk,  it is a general economic consensus that there are at least a few industries that fall under this categorization. Since the capital costs are gigantic, like we see in water or electricity, it makes more sense for those goods to act as a natural monopoly.

However, we see no such issue in broadband Internet because there is competition in the market. Neither the scope of the market nor the economies of scale result in this market being a natural monopoly. Wireless networks have lower capital costs over time. As opposed to water or gas, broadband service can be delivered in a variety of ways, whether it's with metal wires, optic cables, or wireless connection. Many physical mediums and technologies can be used interchangeably to deliver the service, whereas utilities are based on single-use-facility economics. Plus, the vast majority of Americans have choices in providers, services, speeds, and other features on their Internet service, which is more than can be said for water or electricity.

It makes zero sense to regulate the Internet as a natural monopoly when there is still a competitive market by economic definition. Looking at the economics behind a natural monopoly, it's a good thing that it's not a natural monopoly. I went back to my public policy textbook, Policy Analysis by David Weimer and Aidan Vining (p. 98), and I actually found that it's considered a market failure because it creates allocative inefficiency (e.g., see diagram below).

From an economic welfare standpoint, deadweight loss is bad, especially for the consumer. Rather than pay the price at the equilibrium point under a competitive market (Pc), consumers now pay a higher cost at Pm. The economic theory makes sense. Back in December, the Progressive Policy Institute released a study saying that Title II classification would increase federal fees per household by $17 per annum, and that doesn't even include $67 in state fees or $72 in local fees per annum. Although that might not sound like much, when it all adds up, it will cost America over $15B per annum. If you need to think about it further, just think about how poorly actual utilities are handled, and ask if you want that low quality for your Internet. After all, are public utilities well known for quality customer service, upgrades, or technological innovation?

Let's not get into how Title II regulation wouldn't prevent paid prioritization or some of the other finer points that would translate into further government overreach. Broadband Internet does not possess the most basic characteristics of a public utility, and there is no reason to treat it as such. It is a variable service (unlike an actual utility), a constantly changing technology, and needs to be [relatively] free of regulation if it is to continue proliferating. The cry for net neutrality dates back to the 1990s, yet we haven't seen the Internet die. If anything, we went from stationary dial-up to the wide array of satellite, cable, mobile, and WiFi products with greater speed and less cost in less than two decades because the government has by and large stayed out of the way. As a result, America has enjoyed better broadband quality than its European counterparts (Yoo, 2014). It's Moore's Law at its finest! If you want to have some sort of regulation, use antitrust and consumer protection laws that are common in many other markets. Otherwise, remove the red tape, deregulate the local bureaucracy, and watch the market expand even further.


6-22-2017 Addendum: Here is some nice coverage from FreedomWorks on why repealing Title II won't lead to a broadband monopoly.

7-15-2017 Addendum: The American Enterprise Institute came up with a nice report on how Title II harms consumers and innovators.

How Neutral Is Net Neutrality?: Keep the Government Out of Internet Regulation

Net neutrality has been making the news a lot lately. Both sides make is seem like if things do not go their way, it will be the end of the Internet as we know it. A couple of weeks ago, President Obama reaffirmed his support for net neutrality. Ted Cruz replied that net neutrality is like Obamacare for the Internet. In his rather amusing video below from a few months back, comedian John Oliver humorously called protecting net neutrality "preventing cable company fuckery." What is it about net neutrality that has people so worked up?

Net neutrality is the idea that both Internet service providers (ISPs) and governments should treat all data, content, platforms, and sites on the internet equally. For proponents of net neutrality, no net neutrality means that cable companies act as "content gatekeepers" and essentially gouge consumers by demanding a toll for an "Internet fast lane." I'm no fan of Big Business, and a lot of that has to do with its collusion and rent-seeking with Big Government, but if we're griping about companies like Comcast have such monopolistic power because monopolies are inefficient, why should we entrust the government with the same monopolistic power? Do we think that the Federal Communications Commission (FCC), the agency that censors expletives on television and hardly has a history for impartiality, is going to permit unfettered access to the Internet? Whether it is health care or education, any sector with heavy government regulation has only resulted in stifling failure. A University of Michigan economics professor conducted a study with one of his graduate students, and found that franchising reform to allow for deregulation of the cable industry resulted in lower service prices (Bagchi and Sivadasan, 2013).

Looking at the economics of net neutrality (also see here), net neutrality is tantamount to price regulation. Whether we're discussing price floors, price ceilings, or subsidies, not allowing for price discrimination via price regulation has a way of distorting the market for the worst, as is shown by a study conducted by the New York Law School (Davidson and Swanson, 2010). For instance, net neutrality can impose costs from any where between $10-55 per mensem per client (Stratecast, 2010).

A tiered Internet system seems to goes against the idea of those who view Internet access as a right. Rather than view Internet as a right, how about viewing it as a good that is paid for based on the amount of bandwidth used or number of megabytes consumed? Since the Internet does not transmit data in generic "bits," all data on the Internet are not created equal. Netflix or Hulu should be charged more because they're transferring larger amounts of data. It's hardly unfair to pay for a good or service based on the quantity or quality consumed. After all, that is how markets work.



Advocates of net neutrality present such dire hypotheticals, like less services, higher costs, limited choices, network discrimination, or the end of the Internet as we know it. The problem is that they are just that: hypotheticals. Even if ISPs have the technological capability to block certain websites, they don't because because it's bad business. Blocking certain websites would mean driving current customers to competitors. As for less competition, the FCC provides data (see Figures 1, 5b, Maps 2-3) showing not only that Internet connectivity is improving, but that most counties have access to multiple providers. When looking at Internet download speed by country, America's ranking is still above many developed nations, and even for the countries ranked above the United States, the OECD points out that they have virtually have no open access rules. Plus, we also need to keep in mind that speed is hardly the only metric for determining quality of broadband consumption. There is also internet affordability in terms of access to entry-level high-speed broadband, mobile accessibility, jitter, and latency.  

The Internet is not a monolithic entity, but rather a decentralized network of networks. To adapt to the ever-evolving technology, the Internet needs to remain as competitive as possible. For there to be sensible regulation of any kind, one would need to point out the market failure, such as restricting customer access to certain sites so they can increase their profit margin. Considering that there is a lack of a consensus of whether such a market failure exists (Hazlett and Wright, 2012), there is no need to implement net neutrality. Freezing in place the business models of today with net neutrality regulation would stifle Internet innovation. The deregulated approach for the Internet has served and would continue to serve the Internet well. We don't need further regulations; we need to maintain a competitive market. Repeal local franchising regulations so that they don't act as a barrier to entry to the market. Create the right climate for businesses to invest and the broadband market will expand even more. America needs to get off the net neutrality bandwagon if it wants to still have a thriving Internet.


5-17-2017 Addendum: The Competitive Enterprise Institute provides a nice primer on net neutrality.

8-23-2017 Addendum: The American Enterprise Institute (AEI) released a paper examining net neutrality rules in 53 countries, and found that net neutrality does not spur Internet innovation.