By Nate Scherer, American Consumer Institute
Big changes could soon be on the way for broadband high-speed internet if the Federal Communications Commission (FCC) has anything to say about it. Last month, FCC Chairwoman Jessica Rosenworcel announced that the Commission plans to vote October 19th on a new draft Notice of Proposed Rulemaking (NPRM) that seeks to reinstate net neutrality regulations governing Internet Service Providers (ISPs). A vote in favor would open a docket for comments and replies regarding the potential rulemaking.
That announcement comes on the heels of the Senate’s recent confirmation of Biden nominee and telecom attorney Anna Gomez to the FCC, giving Democrats a decisive 3-2 advantage on the Commission and the numbers needed to tackle net neutrality.
Progressives have lobbied the FCC for years to return the U.S. to the network neutrality framework known as the Open Internet Order that briefly existed between 2015 and 2017 under the Obama administration. That framework, net neutrality, reclassified internet access under Title II of the Communications Act of 1934, making ISPs subject to more government regulations.
Advocates of net neutrality insist that these regulations are needed to prevent ISPs from slowing and blocking internet service for specific users and content providers. Yet, there is no evidence that ISPs commit such abuses. Nevertheless, democratic leaders recently repeated many of these falsehoods in a letter to Rosenworcel, where they urged the FCC to use its “rightful authority over broadband internet access” and “full slate of commissioners” to reclassify broadband as a telecommunications service.
Unfortunately, the FCC appears to have heeded this call to action. In her announcement, Rosenworcel chastised previous FCC leadership for their decision to “abdicate authority” by repealing net neutrality regulations. However, the “authority” that Rosenworcel believes the FCC possesses does not exist.
For starters, serious questions exist about whether the FCC has the legal authority to reimpose net neutrality regulations. Recently, the Supreme Court has expressed deep skepticism toward the ability of federal agencies to issue new regulations without specific direction by Congress. In West Virginia v. EPA, SCOTUS, for the first time, relied on the “major questions doctrine” to invalidate a federal rule, noting that regulations of this nature require “clear congressional authorization.” Yet, the FCC is seeking to restore net neutrality regulations without this clear authorization, despite protests from Congress. Even former Obama’s Solicitors General have concluded that Title II regulation of the internet “would be struck down by the Supreme Court.”
Even if the FCC possessed the authority to reclassify internet access, typically a market intervention of the scale that Rosenworcel is advocating for would require proof that a market failure has occurred. Yet, there is no evidence that there is such a failure. In fact, the broadband marketplace is a success story, a success story that Rosenworcel herself has, at times, acknowledged.
For instance, Rosenworcel notes that the Covid-19 pandemic taught us that broadband is no longer just a “nice-to-have” service or “luxury.” Instead, it is a modern necessity that enables people to participate in the digital economy. Specifically, she praises the internet’s open design as “revolutionary,” explaining that this open design is responsible for allowing consumers to “build community beyond geography” and enjoy content anytime and anywhere they want it.
Rosenworcel also praises the enormous progress the nation has made toward making broadband more affordable and accessible to all Americans. Specifically, she notes that Congress has “invested billions of dollars” in building network infrastructure and making broadband “more accessible and equitable.” This includes spending $65 billion on broadband deployment and affordability, with funding going to programs like the Affordability Connectivity Program (ACP), which was designed to close the gap and provide affordable broadband access.
Yet, despite these praises, Rosenworcel also argues that the 2017 repeal of neutrality regulations has opened the door to “downstream consequences” for consumers. However, few, if any, of these downstream consequences are true.
For instance, Rosenworcel laments that the “high cost of entry makes competition a challenge in many places,” noting that some Americans still lack access to more than one provider and fast download speeds. Yet, broadband competition is widespread and increasing rapidly. According to USTelecom data, 87% Americans now have access to two or more fixed internet providers. In addition, the internet is better and faster than ever, with 9 out of 10 American households now possessing access to download speeds of 100 megabits per second (Mbps) and upload speeds of 20 Mbps.
None of these advancements would have been possible without the two trillion worth of investment that ISPs have made since 1996. Sadly, future investments may quickly disappear if ISPs lose the ability to manage data traffic and charge different service prices. Control over such matters gives ISPs a critical incentive to continue investing and innovating.
The FCC’s case for imposing network neutrality is extremely weak. The Commission lacks both the authority to do so and cannot point to legitimate market failures that necessitate reclassifying broadband as a Title II service. Whatever shortcomings still exist within the broadband market can be resolved without the government’s heavy-handed internet takeover. On October 19th, the FCC should do the right thing and vote against advancing this deeply flawed NPRM.
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.