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Net Neutrality: Regulation for Ideology's Sake

Well, that didn’t take long. After the Biden administration finally secured the necessary commissioners to form an operating 3-2 Democrat majority, the Federal Communications Commission (FCC) announced Wednesday that it will hold a vote to again reclassify broadband networks under Title II of the Communications Act of 1934.
A brief history. Activists have been calling for federal regulation of the internet since the 1990s, but the Clinton and Bush administrations wisely took a light-touch approach, understanding that regulation would impose unintended consequences on this nascent technology.
As the broadband revolution began in the 2000s, the FCC chose to classify broadband networks as Title I information services rather than as Title II common carrier services. The difference was significant, because under Title II the FCC would have almost unlimited regulatory power over broadband.
We’ve all seen how broadband networks have thrived under a light-touch Title I regulatory authority, with the growth of ecommerce, streaming entertainment services, social media, and the smartphone revolution.
But that innovation and economic growth has not deterred activists who simply believe in federal control for the sake of federal control. And in 2015 the Obama FCC, absent any compelling data, voted to dramatically change course and reclassify broadband networks as Title II common carriers.
The ominous threat of heavy regulation had the consequence of discouraging private investment in broadband networks, which the FCC found to have declined by around $1 billion between 2014 and 2015.
Over the 20+-year history, broadband network were only classified as Title II common carriers for a brief two years, from 2015 until 2017. The Trump administration’s FCC returned broadband services to their original Title I classification.

Since then, broadband speeds have increased, and real broadband prices adjusted for inflation have fallen 12 percent since 2017.  In fact, broadband prices have remained mostly flat during a time when inflation has been driving up the cost of almost every other consumer service.

In other words, there is evidence that Title II classification caused a harmful drop in infrastructure investment, but not a single piece of evidence of any benefit from Title II, much less any evidence that consumers have been harmed since that two-year experiment was wisely reversed.

But now, here we go again. For purely ideological reasons, and without data or examples of harm, the Biden FCC is reasserting its power to regulate broadband networks under Title II.

Not only is such a move unnecessary and in fact contrary to evidence, but these major policy pendulum swings every time the White House changes hands cause uncertainty for broadband companies and investors, which prevents the kind of long-term planning and financing necessary for major infrastructure investments.

So, net neutrality is back. But the Institute for Policy Innovation (IPI) will be there pushing back against harmful regulation of the internet, just as we have since the internet was being called the “information superhighway.