The True Cost of Net Neutrality

[Commentary] The Federal Communications Commissions new network neutrality rules stand little chance of surviving in court. In the middle of the FCC’s rancorous deliberations last year, a federal appellate court rejected efforts to sanction Comcast for an alleged violation of the agency’s earlier Open Internet policy statements. The court held the FCC had no authority from Congress to enforce net neutrality or otherwise regulate broadband providers.

Congress may well put an end to the rules. In the on-going budget fight, net neutrality may prove a tempting bargaining chip for Democrats with higher priority sacred cows than a likely-illegal agency rulemaking. Wharton economist Gerald R. Faulhaber and Internet pioneer David Farber estimate network neutrality regulation decreased the value of C Block spectrum by 60%. "The evidence speaks loudly and eloquently: Imposing network neutrality regulation reduces the value of the affected telecommunication asset and thus reduces the incentive to invest in such assets,” they wrote.