FCC effort to regulate Internet ignores history of past failures

[Commentary] While the specifics differ by industry, economics research over the past half century has consistently found Title II-style regulation to be inefficient, harmful to innovation and, therefore, costly to society.

The historical costs of regulating telecommunications as a public utility are well understood. Regulations protected Ma Bell’s monopoly by blocking entry, not just from competing firms, but even from the company’s own innovations like mobile telephony, which the FCC denied AT&T permission to deploy … for a decade! The myriad problems of regulation, however, do not mean that it would be better to give companies a free pass. The risks of anti-competitive behavior are real. The government should be vigilant in administering antitrust laws. Antitrust is a better solution because it is driven by evidence of market power and consumer harm, necessary whenever the practices in question – in this case, vertical integration – can have positive and negative consequences. Additionally, enforcement is case-by-case and can evolve along with technology and our understanding of the effects of different types of commercial arrangements.

[Wallston is Vice President for Research and Senior Fellow at the Technology Policy Institute]