Michael Horney

In his address on April 26, Federal Communications Commission Chairman Ajit Pai cited Free State Foundation research estimating that the Open Internet Order "has already cost our country $5.1 billion in broadband capital investment."

Just two years after the FCC adopted the Open Internet Order, I estimate that broadband providers significantly slowed investment, despite the claims by the FCC that the opposite would occur. Taking into account the latest USTelecom investment data, I now estimate that foregone investment in 2015 and 2016 was about $5.6 billion, an amount providers likely would have invested in a business climate without Title II public utility regulation.

[Commentary] On Oct 27, the Federal Communications Commission adopted a Report and Order purporting to “protect the privacy of customers of broadband and other telecommunications services." The rules require consumers to affirmatively opt-in before Internet-service providers (ISPs) can collect "customer proprietary information," which applies to information that the ISP "acquires in connection with its provision of telecommunications service."

As FCC Commissioner Michael O'Rielly discussed, because ISPs need consumer information in order to offer targeted benefits, these regulations simply raise the costs for ISPs to engage in online advertising, zero-rated programming or other targeted consumer offerings. Consumers who choose not to opt in will be confused because edge providers will continue to collect their information and sell it to ISPs. And it's likely ISPs will increase the price of broadband service to cover the costs of purchasing consumer data from edge providers.

[Michael J. Horney is a research associate at the Free State Foundation.]

How true are fears that the United States is falling behind the rest of the world when it comes to broadband? Are Americans paying more for lower-quality broadband than Europeans and South Koreans, and are US companies falling behind their global counterparts?

A survey of broadband in America and broadband costs around the world finds that the United States is a global leader in broadband, as measured by the level of broadband-enabled economic activity, the number of Internet-based companies, the level of digital exports, and the level of Internet-enabled employment.

[Layton is a PhD Fellow for the Center for Communication, Media and Information Studies at Aalborg University; Horney is an alumnus of the Mercatus Center MA Fellowship at George Mason University]