We're into the first 100 days of the Trump administration. He hasn't fixed healthcare. He hasn't simplified our tax code. He hasn't closed the Department of Education or Energy. But when it comes to protecting a competitive Internet, the Trump administration has proven very effective – led by FCC Chairman Ajit Pai and supported by a Republican Congress.
The Internet is younger than many millennials, yet the people who run it, Internet Service Providers, already have a similarly bad reputation. The problem is that both reputations are undeserved and this "fake news" is doing more harm to the economy than good. While millennials will eventually be able to take care of this themselves – by voting the Baby Boomers out of office – ISPs have a more uphill battle. However, with Commissioner Pai at the helm of the FCC the reputation of ISPs might be redeemed sooner rather than later.
The far-left has demonized ISPs as the digital boogeyman that might be the only thing holding them back from socialist bliss. That fear/hate helped the Obama administration usher through changes to regulate ISPs as public utilities. That was a bad idea. But don't take my libertarian word for it: as the Harvard Business Review points out…
[U]tility treatment comes at a high cost. A monopoly or municipal utility, by definition, doesn't compete with anyone, eliminating incentives for investment, innovation, customer service, and maintenance. The sad state of most U.S. power, water, and mass transit systems painfully illustrates that point.
When the Internet was just starting to grow, it was basically cobbled together using shoestrings, gum, handshakes, and backroom deals. Competing companies had to make agreements one by one to provide access to someone else's network. If one relationship went awry, then they would figure out a new way to make things work. Each competitor had an incentive to provide their customers as broad of access as possible. Despite the early beginnings, the Internet worked and as the Internet grew, speeds grew and users grew.
Most importantly, competition grew.
But, as service grew among Internet providers, other "services" that merely used the Internet started growing too. It was a great deal for these companies – someone else built the road, someone else maintained that road, and they could use it for free. Of course, the ISPs were fairly happy to provide access to these services – it was something that their users demanded.
Sometimes cronyism is too alluring though, so the service companies have started calling for government to mandate access to these services while attacking the people who provide that service – an old liberal trick. Using these tactics, the Left made a lot of "progress" under Obama forcing ISPs to submit to their supporters' benefit, successfully vilifying ISPs, and increasing the regulatory burden on them until their competition was all but squashed.
But that looks like it is changing under the leadership of President Trump.
Congress recently rolled back a change that the Obama administration made that moved the regulation of ISPs under the FCC instead of the FTC. And the coup de grâce will likely come when FCC Chairman Ajit Pai (#NoPaiNoGain) unveils his plan – it isn't likely to make the cronies very happy. His plan is forecast to roll back the Obama era orders – stop regulating ISPs as public utilities – and implement what is being called a "light touch" approach.
In an ideal system there wouldn't be a need for any regulation, but we are so far away from ideal that even the ISPs generally agree that some form of regulation is alright. As long as they are saved from the worst, they just want assurance that, or as much assurance as possible, that no more bad news is coming their way.
There's this idea that net neutrality saves the Internet from the curmudgeons who want to take it away. With net neutrality, the Internet will be flowery meadows, rainbow skies, and rivers made of chocolate – at least if you believe everything you read in reddit comment sections. On the contrary, net neutrality means less competition, worse service, and ultimately a worse Internet.
Of course in an ideal system, millennials wouldn't be judged by the Baby Boomers who helped crash the economy. Both millennials and ISPs have a long way to go, but it is safe to say that at least under Pai's leadership the Internet will continue to grow and eventually give way to millennials trolling the Boomers instead of the other way around.
Charles Sauer (@CharlesSauer) is a contributer to the Washington Examiner's Beltway Confidential blog. He is president of the Market Institute and previously worked on Capitol Hill, for a governor and for an academic think tank.
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