Net neutrality: Déjà vu all over again

[Commentary] The bottom line is that network neutrality opponents are against the government defining the boundaries of an industry, at least without substantial evidence that firms are harming customers. Conversely, proponents want government to define the industry by limiting what ISPs can offer to their customers. We have been down this road many times before in telecommunications.

This history includes the 1956 Consent Decree, the Federal Communications Commission’s three Computer Inquiries, the breakup of AT&T, efforts in Pennsylvania and other states to create wholesale-only telcos, and network unbundling. These attempts to create a regulatory-defined industry all unraveled. Their dynamics tell us what we can expect once the FCC and/or Congress act. If the net neutrality proponents win, the artificial industry boundary will lead to numerous regulatory proceedings, an evolving set of rent-seeking businesses that depend upon the restrictions (the most dependent of whom will go out of business), diminished network innovation and investment, and increased investment in lobbying and legal advocacy. Even though the laws and rules will favor large political and economic interests, they will eventually unravel as they become too disconnected from economic and technological realities.

[Jamison is the director and Gunter Professor of the Public Utility Research Center (PURC) at the University of Florida]