Net Neutrality Is Far From Necessary
Get ready for the next stage in the never-ending tussle over “net neutrality.” The Federal Communications Commission (FCC) is prepping to craft yet another regime for internet service providers (ISPs)—the seventh in 13 years.
Even by contemporary standards of partisan unpleasantness, the debate about net neutrality is acrimonious. In 2018, a man was convicted of threatening to kill then–FCC Chairman Ajit Pai’s family because he didn’t like Pai’s approach to the issue. The hysteria does not reflect reality. The “open internet” that regulatory rules purportedly preserve emerged from a world without net neutrality rules.
Early commercial internet innovations such as AOL and voice over internet were impeded by “common carriage” and “universal service” rules, which imposed an array of costly requirements (including compliance with licensing and pricing rules, tax liabilities, and network build-out mandates). Deregulation brought progress, bountiful new networks, and a cornucopia of content. The launch of broadband was itself a product of liberalization, as unregulated cable TV operators challenged telephone franchises by building “fast lanes” to the internet.
Meanwhile, the carriers that were expected to use Bell Labs technologies to bring high-speed data to the masses lagged behind. When the phone companies were unleashed in the early 2000s, they began pressing for market share against cable systems, and both platforms upped their game.
By 2008, however, the FCC worried that cable TV would squelch streaming services, offering “walled gardens” stocked with proprietary content. Critics accused ISPs of stunting the ecosystem by taxing innovation “at the edge.” Net neutrality rules were devised to pry markets open.
Even when briefly in effect, the rules had no such impact. A 2011 complaint accused MetroPCS, then the fifth-largest wireless carrier, of anti-competitively selling cheap subscriptions with unlimited YouTube videos. T-Mobile, then the third-largest mobile operator, was investigated in 2016 for “Binge On”—giving low-cost access to low-bandwidth video streams.
The companies did favor certain popular content, to the benefit of consumers. Happily, the FCC never got around to blocking such practices. Through open markets and without net neutrality, apps like Skype, FaceTime, and Zoom flourished. Google search took the internet by storm, partnering with AOL, when it was the world’s largest ISP, to swamp established search engines.
Broadband ISPs ditched “walled
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