By Mark Jamison

Net neutrality is an idea whose time has passed. Well actually, that’s not quite correct: Its time
never came, because the potpourri of policy ideas referred to as “net
neutrality” (e.g., all bits should be treated the same — no fast lanes — and companies may not pay for customers’ data
use — no zero rating) were never good for consumers.

It is thus difficult to understand why some members of Congress and President Joe Biden’s appointees to the Federal Communications Commission (FCC) —
now-Chair Jessica Rosenworcel and Gigi Sohn, who was appointed to fill the
empty commissioner seat — seemingly want the FCC to resurrect net neutrality
regulations. Those regulations were adopted under Chairman Tom Wheeler (with
Sohn on his staff), then dropped under Chairman Ajit Pai.

The evidence against net neutrality regulations is quite
strong. My 2018 review of the relevant economics literature concluded that
the research almost always finds such regulations harmful for consumers. One
exception where net neutrality regulations could protect consumers would be a
broadband provider blocking them from accessing websites they want to view. The
research finds that this practice (“blocking”) would in fact hurt consumers.
But there are ironies in net neutrality advocates using the possibility of
blocking as an argument for regulation. One irony is that such blocking almost
never happens. Another is that these advocates are often strong supporters of blocking certain content at other layers of the internet
stack.

Since 2018, new empirical research has emerged confirming
that the FCC’s current, light-handed approach is best for consumers. A group of
economists in Europe examined the effects of net neutrality regulations across
Organisation for Economic Co-operation and Development economies, and found:

Net neutrality regulations exert a direct negative impact on fiber investments and an indirect negative impact on fiber subscriptions. Our results, which are in line with our theoretical propositions, strongly suggest that policymakers should refrain from imposing strict net neutrality regulations.

Other studies compare the performance of US broadband
networks during the pandemic to their more regulated peers abroad. George Ford found that fixed broadband in “54 of 108 countries
experienced a speed reduction. . . . Download speeds in the United States were
stable.” For mobile networks, he found that download speeds in the US increased
in both absolute terms and relative to peer countries. Anna-Maria Kovacs’ study
concluded that “U.S. networks generally outperformed their
peers” during the pandemic. For example, according to her estimations, “The
U.S. mean download speed during the pandemic period was 138 megabits per second
(mbps) while the weighted mean download speeds of the EU, EU-4, and OECD were
102 mbps, 106 mbps, and 89 mbps, respectively.” (The EU-4 are the largest
countries in the EU: France, Germany, Italy, and Spain.)

With so much scholarly research showing that net neutrality
regulations are harmful, why do so many in Congress and the Biden
administration push for them? Perhaps Sohn let the answer slip during her confirmation hearing:

The net neutrality debate, which I have been [in] now for 20 years, is really more about whether there is going to be oversight. . . . It’s really much broader than the no blocking and throttling. . . . We cannot leave an essential service such as broadband without oversight.

There are at least two problems with Sohn’s statement.
First, it’s a non sequitur: It doesn’t follow that everything important should
be under government control. In fact, given the political and bureaucratic
incentives inherent in regulation, an argument could be made that the opposite
is often true. Second, Sohn’s unstated premise — that absent the FCC imposing
net neutrality regulations, there is no regulatory oversight — is false. The
Federal Trade Commission provides consumer protection oversight along with
privacy and competition regulations for broadband. Moreover, states also have
consumer protection regulations, and the FCC maintains light-handed oversight
under the rules established during Chairman Pai’s tenure.

It must be that regulatory advocates seek to treat broadband
as a public utility regardless of the consequences for customers. A public
utility framework would give the FCC broad control over broadband providers, as
Sohn explained, including determining what services would be provided and
where, where investments would be made, what innovations could be adopted and
when, who can compete with whom, what prices would be charged, and how much
money providers would be allowed to make (although Sohn implied she is uninterested in regulating prices).

What would be the consequences of utility-style regulation
of broadband? Because the FCC could determine each provider’s present and
future, broadband providers’ eyes would naturally turn away from their
customers and toward Washington, DC. That would be very profitable for those
involved in regulation, but customers would pay for it.

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