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 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 Supreme Court overturns it.