In a landmark announcement, the FCC announced this morning that the Internet would be reclassified under Title II, and moving forward it will be regulated as a public utility. The announcement was delivered via a five page document publicly available on the FCC website.
Immediately following the announcement, people opposed to Title II regulation started trotting out scary talking points, Chicken Little predictions of sky-falling doom to befall the broadband industry.
Unfortunately, for those opposed to these new rules, reality is very much at odds with the predictions coming from doomsayers. The FCC’s rule proposal is a very simple and easy to read document which draws on the lessons we’ve learned from other industries making this transition. Let’s address some of the more common talking points designed to scare the public.
This will stifle innovation!
The telecommunications industry here in the United States has been lagging behind most first world nations in delivering competitive data infrastructure to the diverse and spread out population found within our borders. About the only examples we can find where pricing or broadband speeds have quickly improved, are in areas where we can find more competition. Areas served by Fiber providers like Google Fiber or communities that elect to build their own publicly funded networks, suddenly we see faster speeds and better pricing from the entrenched traditional broadband providers.
Over the next several years, an Internet regulated under Title II might be more hospitable to smaller regional players to enter this market and compete against the big players.
Consumers will be hit with higher bills!
If they are, it won’t be because of the FCC. The new rules detail quite clearly that very little will change with how carriers and Internet Service Providers interact with their customers. It’s an industry notorious for “lobster pot” incremental bill increases and fees, so rate hikes are pretty much inevitable. However, the FCC clearly indicates that they will not enforce any kind of pricing regulations on ISP’s.
Rate regulation: the Order makes clear that broadband providers shall not be subject to utility-style rate regulation, including rate regulation, tariffs, and last-mile unbundling.
TAXES!!!! AHHHH TAXES!!! BOOO!!!
Nope. Sorry. Like the fears over public utility rate regulation, this talking point is also directly addressed.
Broadband service will remain exempt from state and local taxation under the Internet Tax Freedom Act. This law, recently renewed by Congress and signed by the President, bans state and local taxation on Internet access regardless of its FCC regulatory classification.
Again, it would seem that when a customer’s bill is inevitably increased, the FCC will not be to blame.
Why regulate a 21st Century communications tool with legislation from the 1930’s???
Legislation from the 1930’s isn’t still relevant? Tell me how you feel about the Bill of Rights then…
This one is often trotted out as some kind of colloquial “gotcha”. It’s a pithy witticism which manages to successfully ignore the enormous amount of precedent formed since the Communications Act was instituted. Not the least of which is how beneficial competition is for a market (remember our first point).
In 1993, mobile phone networks were reclassified under this exact same process. What was a stagnant market with only two major players quickly exploded with more competition. Without this regulation we would not have carriers like T-Mobile and Sprint. Nor would smaller MVNO companies like Boost and StraightTalk exist in the same way they do today either. We’re not regulating the internet with “typewriter” era tools. We have far more recent experiences to draw from.
Laws are living, breathing entities that adapt over time as successive generations of people interpret them.
So what should we look forward to from the FCC? Actually, very little will change in the day to day lives of consumers. The FCC’s main regulatory functions seem focused on preventing abuse, stopping companies like Verizon and Comcast from throttling services like Netflix. In the near term, it simply gives consumers a third party to turn to when there might be abuse from service or service provider.
Instead of just focusing on headlines, or getting drawn into partisan name calling, you can go directly to the source, as the FCC’s new rules are very plainly stated in a document which is freely accessible and easy to read.
FCC Adopts Strong, Sustainable Rules to Protect the Open Internet