Who stands to lose the most from the net neutrality decision? Google (and consumers).

Coverage Type: 

[Commentary] Since the decision of Verizon v. FCC in which the Federal Communications Commission “lost” some net neutrality rules, many (including myself) have claimed that Verizon was actually the loser.

But I’ve had time to reassess and I feel compelled to rephrase my claim; it is not Verizon but rather Google (and other of that ilk) who is the biggest loser. This is why: Verizon (and its ilk) is accustomed to being regulated, heavily -- the Verizon decision will not change that. Google is not used to being regulated -- the Verizon decision will change that. The result of the case was that the FCC can adopt policies that help get consumers Internet connections.

That’s not the most shocking part. If I were to ask 100 people what would encourage you to adopt a new Internet provider (maybe even your first provider) the vast majority would answer the same way you would -- a lower price would be the key. The court in Verizon saw things differently. Rather than price being “the”, or even “a”, fundamental driver of consumer demand, the direct connection between consumer price and consumer demand was ignored. Ultimately, the court bought the FCC’s tale that only content drives Internet adoption. What’s more, the court believed the FCC’s claim that content “innovators” (like WhatsApp, Facebook’s new $19 billion purchase) cannot fend for themselves but must be subsidized by Verizon (and others) -- which really means they will be subsidized by you through higher consumer prices. The increase of consumer prices will thus add to innovation, that will add to consumer adoption and (if this is to be believed) even higher consumer prices.

It is this thin theory that the court found sufficient to support the FCC’s move into Internet regulation.

[Boliek is an associate professor of law at Pepperdine University School of Law]

[March 10]


Who stands to lose the most from the net neutrality decision? Google (and consumers).