John Oliver has once again waded into the Internet regulation battle, arguing that the Federal Communications Commission should retain former President Barack Obama’s Internet regulations to prevent Internet service providers from prioritizing content in exchange for payment by content providers.
That sounds reasonable, until you remember that if this applied to television, Oliver and his friends on paid-premium HBO would need to dust off their resumes. Arguing that heavy-handed regulation is necessary to avoid disastrous threats to free speech and Internet start-up companies is not only overkill, it’s completely disingenuous when the leading champion has a commercial-free paid fast lane into your home that no one complains about.
Title II regulation, the common carrier regulations imposed by the Obama administration, is excessive. Regardless of whatever issues Oliver and his allies hope to prevent, concentrating this much regulatory power will backfire a thousand-fold. You don’t break out a bazooka if you think you saw a fly.
Title II gives FCC vast power to regulate the prices and practices of Internet service providers, moving from a permissionless model to “If it pleases the crown.” In doing so, we’re pinning hope on bureaucrats in Washington to better plan the future of the Internet than competitive tech entrepreneurs in Silicon Valley, who revolutionized the world under two decades of light-touch Federal Trade Commission regulation.
We need police, not central planners. Title II is the opposite.
The Internet is a rapid-moving engine for economic growth, constantly creating better alternatives and destroying outdated practices and services. When have any of those descriptions applied to government? The people who couldn’t build a working website to sign people up for health insurance for less than $2 billion aren’t the people who should design the web’s future.
Title II regulation has been tried before, keeping telephone service largely unchanged from the 1930s-1980s. Subjecting the Internet to the same regulations that limited telephone innovation to buttons versus a rotary dial cannot seriously be what Oliver wants, but that’s exactly what he’s asking Americans to fight for.
Proponents of Title II argue that big companies cannot be allowed to undermine small companies on the web. They believe ISPs will allow content producers with lots of money to purchase prioritized traffic over shallow-pocketed competitors.
But Title II doesn’t alleviate this situation and actually creates a de-facto subsidy for big traffic users. Without rolling back Title II, big companies using lots of bandwidth legally cannot be charged more than upstarts who don’t. It’s a regressive tax on small content providers. Further, bandwidth is not limitless. Title II supporters claim they’re worried about big companies paying to have competitors blocked, but if they can take up all the traffic at a below-market price, small sites will be blocked anyway.
Forcing ISPs to treat all traffic the same is the equivalent of charging semi-trucks and sedans the same toll to cross a bridge. Let’s face fact: one is putting more weight on the bridge than the other.
Title II proponents also seem unaware of how government regulation hurts competition. Similar regulations have been applied before, for many of the same reasons people support Title II.
From railroads to airlines, the result has consistently been large companies are able to survive the regulatory onslaught, while small competitors go out of business or never start. Then agencies are captured by the survivors and used as anti-competitive weapons. The classic example is the railroads’ capture of the Interstate Commerce Commission and subsequent regulation of trucking to protect the railroads.
Again, defense of these regulations rests on intentions and the presumption of perfect government. You’d think an anti-corruption warrior like Oliver would know better.
Finally, Title II supporters claim it hasn’t hurt investment in broadband deployment, with Oliver citing a statement made by a Verizon executive. To be clear, no one against Title II is worried about big companies. The big corporations survive in markets walled off by regulation that keeps new entrants and smaller players locked out. The real worry is for hundreds of small ISPs in rural communities across America, serving anywhere from 1,000 to just 4 households. These companies petitioned the FCC en masse in 2015, begging the agency not to implement Title II.
No one wants ISPs to throttle the content they’re trying to access, but this is why strict rules against such practices are unnecessary. There is no evidence that such a problem will ever approach a market failure warranting a massive new regulatory regime like Title II — especially in a world where the FCC, the FTC, and the Department of Justice all seek to reduce anti-competitive practices.
Companies will always try new strategies. If consumers aren’t getting what they want, they’ll switch — absent competition-stifling regulation. All the other fears are just that. You cannot get every channel with a basic cable package, yet that hasn’t stopped “Game of Thrones” from becoming a hit or John Oliver from obscuring the facts.
Adam Brandon (@adam_brandon) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is president and CEO of FreedomWorks.
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