By Nate Scherer, American Consumer Institute
In a scathing rebuke of the Federal Communication Commission’s (FCC) recently announced draft Notice of Proposed Rulemaking (NPRM) on network neutrality, FCC commissioner Brendan Carr penned a statement earlier this month arguing it would be a “serious mistake” for America to imitate Europe’s disastrous approach to internet regulation. Commissioner Carr is correct.
Unlike America, which has historically relied upon a light-touch approach to internet regulation (with the notable exception of Obama-era regulations), Europe has taken a much different approach that applies “utility-style controls” to network infrastructure. As a result, America’s networks have blossomed while Europe’s have stagnated, frequently struggling to keep pace with consumer demand. The free and open nature of the U.S. networks, made possible by an absence of heavy-handed government interventions, has encouraged Internet Service Providers (ISPs) to make significant investments in America’s communications infrastructure over the last few years. These investments are primarily responsible for America’s considerable lead over Europe.
Since 1996 alone, private ISPs have invested over two trillion in U.S. networks, helping drive network innovation. European ISP investment pales in comparison. A USTelecom study measuring U.S. and EU broadband trends found that between 2012 and 2018, American ISPs invested 75 percent more in telecom infrastructure than their European counterparts. They also invested 208 percent more per household, despite a customer base that was 43 percent smaller. The study attributed these disparities to a U.S. policy framework “that encourages investment in facilitates-based competition rather than heavy government regulation of services.”
These substantial disparities in private investment are evident in the level and quality of coverage, adoption, speed, and competition available to American and European consumers. For example, the U.S. continues to lead Europe in network coverage. At the end of 2022, about 95 percent of Americans had access to 5G networks while it was available for only 73 percent of Europeans. The U.S. also holds a significant lead over Europe regarding adoption, with 92 percent of American households having a broadband connection at any speed as opposed to just 77 percent of European households.
A similar gap exists regarding the speed of broadband networks. According to Ookla’s Speedtest Global Index, America enjoys fixed broadband download speeds of 210.40 Megabits per second (Mbps) and mobile download speeds of 85.32 Mbps. In contrast, Germany, Europe’s most populous country, enjoys fixed broadband download speeds of 85 Mbps and mobile download speeds of 56.59 Mbps. In terms of global performance and fixed broadband, no European country ranks above America, and only a handful of small Scandinavian countries do for mobile broadband.
Competition is another point of divergence between the U.S. and Europe, and it is perhaps even more noteworthy considering that American network neutrality advocates often complain that competition is lacking within U.S. networks, leading to fewer quality choices for consumers. Yet, competition is thriving and the total number of broadband providers continues to climb. In 2013, just 17 percent of consumers couldn’t access to fixed 25 Mbps/3 Mbps broadband services. Today, that percentage is minuscule, with the vast majority of Americans having access to multiple choices of providers and technology platforms ranging from wireless and fixed wireless to fiber, or some hybrid combination of these. No longer are Americans limited to just cable and DSL.
There is also a growing assortment of satellite internet options like HughesNet and Starlink. Each is busy expanding their networks by launching dozens of new low-orbiting satellites so that customers can access high-speed internet from anywhere in the world. The reality is that consumers have numerous options to choose from and competition is only becoming fiercer.
Yet, despite these facts, the FCC is preparing to advance an NPRM, that if adopted, would remake American internet regulations in Europe’s image by erecting a utility-style regime that reclassifies internet access under Title II of the Communications Act of 1934. Such a move would not only subject ISPs to more government regulation, but also open the door to future abuses like rate regulation, despite FCC claims to the contrary. The result would be an American regulatory environment that discourages innovation and investment and sets the country back for years. This is an unacceptable outcome.
Rather than seeking to copy Europe’s failed network governance structure, America should chart its path forward, separate from Europe. America’s networks are thriving and outperforming Europe on nearly every conceivable metric. That’s not something that should be quickly ignored.
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 atwww.TheAmericanConsumer.Org or follow us on Twitter (X) @ConsumerPal.