The AOL Telltale

[Commentary] Whether or not the acquisition of AOL turns out well for Verizon, it helpfully exposes the fallacies underlying the Obama plan to regulate the Internet.

Look where Verizon, among the largest players in wired and wireless communication, is putting its money. The company has lately dialed down its capital expenditures for broadband. The economics of its FiOS service was already difficult, and Title II makes it more so. And now we have $4.4 billion going to an AOL purchase that will do nothing to expand that service, increase coverage areas, or enhance bandwidth for Verizon’s more than 100 million wireless customers. What Verizon will get in AOL is a company that is very good at attracting people to its various websites, particularly to watch videos. AOL also has useful technology for selling and displaying ads to these customers, particularly as they watch on mobile devices. This exposes the other flaw in the Obama/Wheeler policy. The Title II regulations were created for monopoly utilities. In the hyper-competitive world of the Internet, where customers can choose among established wired and wireless providers, plus upstarts like Google Fiber, Verizon’s purchase is further evidence that it is not a monopoly.