Markets > Micromanagement
The FCC has voted 3-2 along party lines to repeal the 2015 Net Neutrality rules enacted during former President Barack Obama’s administration.
You know what’s going to happen? NOTHING.
The way people have behaved, even threatening FCC Commissioner Ajit Pai and his family, you’d think there’d be chaos in the streets. In fact, a security threat interrupted the proceedings:
— POLITICO (@politico) December 14, 2017
2015 Net Neutrality
Okay, so the first question is what are the rules that Obama’s administration passed? Back in 2014, Obama pushed the agency “to impose upon internet service providers a creaky regulatory framework called ‘Title II,’ which was designed in the 1930s to tame the Ma Bell telephone monopoly.” This meant that broadband providers had to treat all traffic equally so they could not block or slow content or provide better speeds for certain websites.
FCC Commissioner Ajit Pai sat on the board at the time and he voted no. He was disappointed that the board “chose micromanagement over markets.” He was correct as he points out in his Wall Street Journal op-ed:
This burdensome regulation has failed consumers and businesses alike. In the two years after the FCC’s decision, broadband network investment dropped more than 5.6%—the first time a decline has happened outside of a recession. If the current rules are left in place, millions of Americans who are on the wrong side of the digital divide would have to wait years to get more broadband.
The effect has been particularly serious for smaller internet service providers. They don’t have the time, money or lawyers to cut through a thicket of complex rules. The Wireless Internet Service Providers Association, which represents small fixed wireless companies that generally operate in rural America, found that more than 80% of its members “incurred additional expense in complying with the Title II rules, had delayed or reduced network expansion, had delayed or reduced services and had allocated budget to comply with the rules.” They aren’t alone. Other small companies have told the FCC that these regulations have forced them to cancel, delay or curtail upgrades to their fiber networks.
The rules also slowed a company from introducing new services due to fear of non-compliance. A major company shelved an idea for “its out-of-home Wi-Fi network” because those in charge did not know if the FCC would approve. Last May, Pai heard from 19 municipal internet service providers (city-owned nonprofits) that had to “often delay or hold off from rolling out a new feature or service because we cannot afford to deal with a potential complaint and enforcement action.”
The burden on people and companies, the market overall, led Pai to develop new rules that concentrate on transparency. The way that people have acted online today you’d think that Pai just ordered the end of the world. He did not (emphasis mine):
This is why I’m proposing today that my colleagues at the Federal Communications Commission repeal President Obama’s heavy-handed internet regulations. Instead the FCC simply would require internet service providers to be transparent so that consumers can buy the plan that’s best for them. And entrepreneurs and other small businesses would have the technical information they need to innovate. The Federal Trade Commission would police ISPs, protect consumers and promote competition, just as it did before 2015. Instead of being flyspecked by lawyers and bureaucrats, the internet would once again thrive under engineers and entrepreneurs.
You know what’s so great about the free market? Competition. Power of the consumer. This means those companies have to tell you if they plan on throttling Netflix or make you pay for certain sites. The companies HAVE to tell you everything you’re signing up for.
Jon Leibowitz, a former employee at the FTC, wrote in WSJ:
That’s because the FCC plan would restore power to police the internet to the Federal Trade Commission. The FTC, my former agency, is an experienced cop on the beat in this area. It protected internet users from unfair, deceptive and anticompetitive practices for the two decades before the FCC’s 2015 rule, which removed its jurisdiction.
Consider the core principles of net neutrality, which I have long supported: unfettered access of the entire (lawful) internet and transparency about broadband providers’ practices. The FTC worked on those issues for years. In 2000, it conditioned AOL’s acquisition of Time Warner on the combined company’s commitment to treat competing internet providers operating on its network fairly.
Leibowitz continued (emphasis mine):
With its authority restored—and assuming the agency prevails in a challenge to its power pending in a federal appellate court, as is likely—the FTC can hold internet providers to their public promises to maintain an open internet. Every major broadband provider has committed not to block, throttle or unfairly discriminate against lawful content. The FCC’s plan would compel providers to give customers clear and detailed information about their practices—commitments both the FTC and state attorneys general will be able to enforce, since false public disclosures violate the law.
In other words, you can still do everything you did before!DONATE
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