WASHINGTON, November 22, 2017 — The Trump administration plans to repeal net neutrality regulations the FCC imposed in 2015. These rules meant that internet providers could no longer freely choose which services to offer individual consumers. Rather, the regulations aimed to “level the playing field” to give every internet subscriber equal access to all services and internet speeds.
Government regulation of Net Neutrality
Proponents of net neutrality argue that repeal will let internet providers charge different prices for different services. Low-income subscribers would have fewer services available to them than high-income subscribers.
They argue that the internet should be a public utility, hence regulated. That would ensure equal access to the internet for all consumers.
Without regulation, big internet providers will practice more extreme price discrimination. This will ultimately price the lower end of the market out of faster internet services. Low-income internet subscribers might be unable to access services like Netflix.
They argue further that many entertainers have gotten their start by posting videos that have gone viral. If providers can limit access for some, the struggling actor may lose access to millions of people. Lindsay Stirling is one such performer who could not find commercial success but became an internet sensation:
Kamau Bell, a comedian and host of the CNN documentary series “United States of America” recently said the chance for a video to go viral is slim without net neutrality laws. These laws were designed to “ensure that anyone who puts something on the internet has a fair shot at finding a life-changing audience.”
Opponents of net neutrality regulations argue that different bundles of services with different prices is a standard business practice. Cars have widely ranging prices based on different features. Even with cable service, consumers can buy different bundles of regular and premium channels, paying different prices for the services they buy.
Should everyone drive exactly the same car with exactly the same features?
But perhaps the internet is different. Perhaps the internet is a public utility. Perhaps regulation is appropriate.
The definition of a public utility centers around the concept of an essential public service, like water, electricity and natural gas. These are services that people cannot do without while maintaining a basic standard of living.
In the mid-1990s, the Clinton Administration set the initial rules for the internet. The FCC then reasoned that the internet was not a public utility; people were living well and the internet was not yet generally\ available.
President Clinton’s Internet Rules
The Clinton Administration set rules similar to the rules set for broadcast media. Just as cable TV providers could charge different prices for different bundles of services in different locations, internet providers could provide people the products they wanted at prices they were willing to pay.
That is the formula for success. Within 20 years, the internet boomed. Total investment exceeded $1.5 trillion. As FCC chair Ajit Pai says, this resulted in “an internet economy that became the envy of the world.”
Senator Steve Daines, D-Mont., recently said,
“Some of America’s greatest companies were born on the internet. By dismantling harmful internet regulations, American companies will have an open internet that allows their business and our economy, to grow.”
It appears that the proposed rule changes will likely pass. Three of the five commissioners have already voiced support. Pai says that this will be good for all Americans.
“I would just say that the past is going to be prologue, that we had a free and open internet before these regulations were imposed in 2015. We will have a free and open internet along with massive investment in infrastructure, more innovation, and just better, faster, and cheaper services going forward. So, I think it’s a win for everybody. … Facebook and Amazon and Netflix and Google, those are now globally known names and brands. But they didn’t exist 20 years ago. And they developed precisely because we had a free-market approach.”
We will soon see if he is right.