The Federal Communications Commission recently released a draft net-neutrality order that it will soon vote on (April 25th). Unfortunately, the 434-page proposal appears just as flawed as previous versions.
Similar to the initial proposal, this draft order would reclassify broadband services from a Title I information service to a Title II telecommunications service under the Communications Act of 1934. The draft order would also reinstate strict rules that prohibit “blocking, throttling and paid prioritization,” re-establish a general conduct standard that prohibits “unreasonable interference,” and make other significant changes. The commission believes reclassification is necessary to “safeguard the fair and open internet” and protect consumers.
However, the internet is already “fair and open,” and consumers increasingly enjoy a wide range of services available at reasonable and even declining prices. It is also better and faster than ever, with the U.S. consistently outperforming Europe on crucial performance measures despite the latter being far more regulated.
The reclassification of broadband services is unnecessary and represents a radical departure from the light-touch approach to internet regulation that has served the county well. In practice, reclassification would subject broadband services to a regulatory framework initially designed to address a 1930s telephone monopoly, not the vastly more competitive broadband market.
Unsurprisingly, this order is sure to lead to significant unintended consequences for investment, deployment and access within the broadband market, as well as for consumers who will experience higher broadband prices due to increased tax exposure traditionally experienced only by telecommunication services.
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Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.