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The Sky Didn't Fall

It was one year ago today that the Federal Communications Commission’s (FCC) Restoring Internet Freedom Order took effect, which reversed the Obama administration’s late 2015 reclassification of broadband providers as Title II regulated entities.

And the sky didn’t fall.

Progressive activists, who hate the fact that the internet infrastructure (the means of production) is largely owned by capitalists, had been demanding broadband regulation for years. After a disappointing 2014 election, to appease their base, the Obama administration decided to apply regulations written in the 1930s for the analog telephone monopoly to the internet. Well, actually, not to the whole internet—just to internet providers.

Many experts, including IPI, warned that not only were these regulations completely unnecessary—they would likely have a harmful impact on broadband investment.

And they did.

While many factors affect broadband investment, the imposition of heavy federal regulations is certainly a major one, and broadband investment dropped by around $5 billion in the two years after the Obama administration imposed its heavy-handed internet regulations.

But elections matter, and change at the FCC after the 2016 election resulted in changes in policy, and especially the reversal of the Title II reclassification.

Reversing the Obama administration’s internet regulations would “put the internet in crisis,” according to net neutrality proponents. But not only did no harm result, we now have broadband investment figures for 2018, the year the Obama internet regulations were reversed.

The data show that broadband investment grew by $3 billion in 2018, according to US Telecom, rising substantially after the elimination of regulation.

Broadband investment matters because broadband companies are among the biggest investors in our economy. According to the Progressive Policy Institute, four of the top six companies by capital expenditures in 2018 were broadband companies AT&T (#1), Verizon (#2), Comcast (#4), and Charter (#6). This investment creates jobs, builds infrastructure, and helps to eliminate the “digital divide,” bringing high-speed internet access to more and more Americans.

The Obama administration’s experiment with heavy-handed internet regulation was an unforced error, and it is one of the major policy successes of the Trump administration that regulations were reversed and the internet economy was put back on a stronger footing. In 2018, fiber was deployed to more new homes than in any year in history, average broadband speeds increased substantially, and wireless small cell deployment was quadrupled.

The sky didn’t fall, and we’re back on the right track.