Coronavirus Crisis Vindicates the FCC’s ‘Net Neutrality’ Rollback

The European Union has embraced a heavy-handed regulatory scheme designed to allocate access to the existing network, while the US has emphasized private investment to expand network capacity. As the internet emerged and developed, the work of European regulators was guided by the legal system developed to govern traditional telephone service largely built with taxpayer funds. This approach presumed that significant parts of the phone network were likely to remain monopolies. The European regulatory framework requires sharing the network that already exists and limiting providers’ ability to recoup capital invested in expanded capacity. The US has followed an entirely different strategy. Rather than fold the internet into an outdated legal regime developed for a different era, the American vision concentrates on encouraging telephone and cable companies to compete by investing to increase their bandwidth. The only major deviation from this pattern occurred in 2015, when the Federal Communications Commission adopted a “net neutrality” rule applying legacy telephone regulation to the internet for the first time. The agency returned to its longstanding investment-oriented policy in 2018. As demand for internet services increases, the European approach looks more ill-conceived than ever. Network investment has allowed the US to enjoy greater usage levels and higher capital spending than Europe over the past decade. This was a strong endorsement of US policy even before the novel coronavirus rearranged patterns of bandwidth consumption around the world. That US producers have responded to the recent surge in demand without having to throttle high-quality applications provides the most eloquent demonstration of the wisdom of that approach.

[Yoo is a law professor and founding director of the Center for Competition, Technology and Innovation at the University of Pennsylvania]