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President Biden Sadly Wants to Revive 'Net Neutrality'

Legal Fellow, Center for the Economics of the Internet
Senior Fellow and Director, Center for the Economics of the Internet

Much has been made about “the big lie” in contemporary politics.  But what about tech policy?

Remember when the FCC’s 2017 repeal of “net neutrality” rules was going to make the Internet load “one word at a time?”  When it was going to “destroy everything that makes the internet [sic] great?”  When it was on a path to hasten the death of the Internet?

These and more were the prognostications of countless “net neutrality” proponents at the time.

But as the millions of Americans who have been attending Zoom meetings, composing emails, gaming, and streaming countless movies and TV shows from home for the past year-plus well know by now, none of the parade of horrors promised by the repeal of net neutrality actually happened.

Instead, the opposite occurred.  While broadband investment declined in the U.S. in 2015 and 2016 following the imposition of net neutrality rules—for the first time in U.S. history outside of a recession—investment rose in 2017 and 2018 following their repeal.  Throughout the COVID crisis, American broadband companies, absent “net neutrality,” provided customers with significantly higher speeds than Europe or elsewhere that had net neutrality rules.  This was due in part to the fact that investments per capita by U.S. telecom companies, which don’t face net neutrality rules, dwarf their highly-regulated counterparts in the EU and comparable nations.

But what about the other major net neutrality concern—namely, “gatekeeping?”  That is, the notion that Internet providers have “the economic incentives and technical ability” to restrict customers’ access to certain websites and services, to the benefit of their own offerings.  For example, a cable operator, acting monopolistically, could theoretically seek to throttle customers’ access to Netflix or other streaming video options that compete with their own cable TV offering.  Ditto access to FaceTime or Skype, to steer customers towards cable providers’ own VoIP offerings.

That didn’t happen either.  Instead of cutting off access to their online competitors, AT&T and Sling launched “AT&T Now” and  “Sling TV” skinny bundles to compete with the likes of Netflix.  In turn, YouTube and Hulu launched their own skinny bundles.  Disney also entered the streaming fray with Disney+.  And as for VoIP, Zoom and Teams have become the undisputed kings of work-from-home teleconferencing since their rise in March 2020.  Ironically, it’s these so-called “edge providers”—Facebook, Twitter, YouTube, and the like—and not Internet providers, that have been recently criticized for their content gatekeeping decisions.

Net neutrality proponents’ fears haven’t panned out because their foundational assumption—that only net neutrality rules keep broadband providers from harming consumers —has proven false. Absent net neutrality rules, broadband providers have done nothing to stop American consumers from reaching the content of their choice without blocking, throttling, or harmful paid prioritization. And Americans today face more, not fewer, choices for broadband Internet service than ever before. 5G services, both fixed and mobile, are poised to offer even more broadband choices to American consumers, even in hard-to-reach rural areas.

Nevertheless, America is poised to, once again, reverse course on this issue.  President Biden’s administration fervently supports restoring the 2015 rules in some fashion.  And at the state level, California has already enacted its own net neutrality law.

We’re already experiencing the negative effects of new net neutrality rules—particularly in California.  Prior to California’s new law, AT&T allowed customers who subscribed to both its mobile broadband and streaming video services unfettered mobile access to the streaming video service, without this use counting against the customer’s mobile data cap.  But no longer.  AT&T’s synergistic use of this practice, known as “zero rating,” is now explicitly illegal in California.

California’s prohibition of zero rating doesn’t just affect streaming video fans.  Since 2019, wireless carriers have unanimously agreed to zero-rate—exempt from data caps—U.S. veterans’ access to a key telehealth app, called VA Video Connect.  But save for a new exemption, this too now seems illegal under California’s net neutrality law.

Tim Wu, the widely-recognized father of net neutrality and a current advisor to President Biden, is said to be on the case, seeking a “work around.”  Good luck.  How many other pro-consumer services will need similar “work arounds” thanks to the legal morass created by California’s new law?  Only time will tell.

America would be wise to learn the lessons of Europe.  Net neutrality has not helped consumers there, or anywhere else.  At the peak of the COVID crisis, it was European consumers, not Americans, whose access to Internet services was throttled—at the behest of the government, no less.  Europe also lags the U.S. in 5G.  Europe’s broadband problem, as is often the case, is the result of government mismanagement.

Over the past few years, tech policy’s “big lie” has been exposed—hopefully for good this time. Light-touch regulations allowed America’s Internet infrastructure not just to grow, but to thrive for over a quarter century. American regulators and legislators would be wise to return to this historically-proven approach.

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