Five Reasons Why Title II Net Neutrality Is No Longer Relevant In Tech Policy

Here are five reasons why it is no longer relevant and is unlikely to be realized as advocates want.

1.      Things have worked out well without Title II.

The repeal of Title II net neutrality has been in place for some 3 years, and broadband internet speeds, investment, and competition have improved. Regulatory proponents made prophesies of doom about the repeal, but they never happened. Internet Freedom, the light-touch free market broadband policy we have today, works well.

Title II refers to a chapter in the 1934 Communications Act to regulate the Ma Bell telephone network. It is an utterly inappropriate framework for the internet, which is a network of networks. The goal of Title II is to create a government monopoly of broadband by adding a fee to the price of broadband and using the money to fund a government provider.

The European Union, which has had net neutrality rules since 2015, has a moribund broadband market which shrinks every year as a share of the world total.  Countries with so called hard net neutrality do not report greater investment, innovation, or competition. In fact, Big Tech has grown in the EU despite regulation. See my PhD thesis comparing the net neutrality policy data across 53 countries.

2.      Americans prefer market competition over price controls

Americans generally want to solve problems through innovation, not regulation. 5G is making the promise of a ubiquitous, universal, high speed network a reality. Americans are excited about 5G and want to win the global race. They want to see new wireless networks deployed, rather than government exert more power over traditional wireline facilities.

The 5G FAST Plan, a signature FCC achievement, is a comprehensive policy for 5G spectrum, infrastructure rollout, and modernizing regulation. Under FCC Chair Ajit Pai, the FCC has increased spectrum availability, reduced and removed burdensome, outdated regulation, and developed policies to fast-track infrastructure development, building on earlier 4G bipartisan success. If Dems come to power, expect them to adopt these policies and call them their own.

3.      Big Tech is the demonstrated gatekeeper, not broadband providers.

Net neutrality was always a theory of potential harms. The FCC can count only a handful of violations in two decades, all of which were resolved without regulation. Big Tech on the other hand has demonstrated set of behaviors called out by antitrust authorities around the world: blocking, censorship, discrimination, and throttling in the form of de-prioritization, de-monetization, and shadow banning.

Unsurprisingly, big tech companies have been called out by lawmakers on both sides and are now subject to multiple antitrust lawsuits. As Mark Jamison explains, prosecuting big tech is likely to suck up regulatory resources, starving political bandwidth for other regulation.

From an economics perspective, net neutrality means that consumers pay 100 percent of the cost of broadband while Silicon Valley pays zero. It is a price control in favor of large corporations like Netflix, YouTube, Hulu, Xbox Live, Disney+, and Amazon Prime, the video providers which comprise three-quarters of US downstream internet traffic. A free market telecom policy allows the costs to shared fairly.

The only reason that a digital divide remains in the US today is that Silicon Valley has not paid for its use of broadband networks, creating a loss of some $30-100 billion annually. As such, Brookings Institute Nicol Turner Lee in her forthcoming book calls for Big Tech to contribute to the Universal Service Fund (USF).

4.      Advocates priorities have changed.

Big Tech has been a lead player to impose net neutrality and realize the financial benefit. It is possible that such corporate welfare has increased its dominance, adding to antitrust concerns.  Now that the tables have turned, talking about neutrality impugns the discriminatory behavior of big tech companies

During normal election cycles, net neutrality advocacy organizations recycle campaigns to “save the internet.” Those messages don’t play well during the pandemic when everyone is using the internet already for work, school, and health care. Instead advocacy organizations parlayed their messages into critical race theory declarations in support of Joe Biden’s presidency. It’s likely that such messaging will need to be retooled going forward as it is undertheorized in telecom policy.  

5.      Title II would depress investment at a time when the US government is in fiscal crisis.

The FCC documented an investment decline of $3-6 billion in while Title II net neutrality was in place, a cost falling hardest on small and rural providers. Broadband taxes are regressive as they force the poor to pay a greater percentage of their income on an essential service. People don’t want any more government fees on communications services which already devour a quarter of the bill price. Moreover, Title II net neutrality depresses network operators’ ability to buy spectrum, monies which to the Treasury needs desperately now. If the government wants more money, it should make Big Tech pay its use of spectrum, which today it gets for free.

Originally published in Forbes.