I’ve seen a lot of discussion recently promoting the idea that reclassifying broadband internet under Title II is the solution under some kind of idea that regulation is what we need to keep the internet free. Here’s what I think I know about regulation.
Regulation means less competition and innovation.
Even when it doesn’t prevent people from going into business (as Insurance commisions do), it stifles small businesses through increased compliance costs and entrenches large ones. And since no business operates at a loss, who pays for the extra onerous paperwork the ISPs will have to do? We all will. It is guaranteed to raise the cost of bandwidth.
The entrenchment of large businesses creates what I call the “slum lord effect” by ensuring that you, the consumer, don’t have any place to go when you want to “vote with your feet” and go to a competitor. You can pretty much infer that service will take longer to deliver and repair. Just like the ones that run NYC hovels, the slum lords of the business world do not worry about losing business to competitors because they know you, the consumer, no longer have viable options.
Federal Regulation is not responsive, and certainly not to a broad consensus.
I think people trust politicians less than they ever have in history. And I think they are right to do so. With this in mind, I really have to wonder what leap of logic a person has to make in order to go from not trusting politicians to trusting a board regulators who was appointed by the President and confirmed by the Senate.
The President and the Senate are our LEAST accountable policitians. Ever try to ask any of them for anything? Ever try to vote them out of office when you disagree? You can’t make them feel any amount of fear that your wrath as a voter means doodly-squat to their re-election. Only PR disasters move their worlds.
Also, the “Title II” which some people seem to argue is THE SOLUTION to net neutrality is, in fact, Title II of the Communications Act of 1934. I’m sure it has been amended but let’s be clear. It’s old and… NO ONE HAS READ THE 682 PAGES OF TITLE II.
Some people argue that the fact that the FCC have the discretion to not enforce parts of the Act means that it will be less onerous. To me, it just means they have the right to be arbitrary. Consider this question: are they likely to act in a way that favors the consumer or in a way that favors the big company being regulated? If you believe in the revolving doors between regulated companies and regulating authorities then you have no reason whatsoever to trust that a regulatory agency permitted to be arbitrary will be in your best interests.
Fundamentally, I ask you to consider this: Do we really know what we are asking for? Or is Title II a deal with the devil?
The Fundamental Problem is Regulation
“Regulation makes it hard to innovate,” said Kevin Lo from the Google Fiber project. And he’s right.
The fundamental problem with broadband innovation and competition is that it is too difficult to work with local municipalities to get into the Broadband business. I argue that the net neutrality problem is fundamentally caused by regulation. And you can’t fix regulation with more regulation.
Here’s Kevin Lo from the same article:
“Governments across the country control access to the rights-of-way that private companies need in order to lay fiber. And government regulation of these rights-of-way often results in unreasonable fees, anti-investment terms and conditions, and long and unpredictable build-out timeframes. The expense and complexity of obtaining access to public rights-of-way in many jurisdictions increase the cost and slow the pace of broadband network investment and deployment.”
My solution: Reduce regulation
Marc Andreeson, in a recent tweet storm laid out his thoughts on disruptive innovation.. He described disruptive innovation as pro-consumer and world-improving, especially for those of low-income. To put these into my own words: The best protection we can have is the one that allows for disruptive innovation when it legitimately improves the lot of all.
And to do improve the chance for disruptive innovation in Broadband, we have to find a way to reduce regulation. We had considerably less disruptive innovation before the Telecom Act of 1996 deregulated telecom toward a model that allowed for more disruptive innovation.
The question we have to answer is: Is there some way can make it easier for new businesses to bring online disruptive broadband services? Is there a way to reduce the friction for “voting with our feet”?
If we can, then we have a better lever than onerous and unpredictable outcomes of Faustian bargains such as Title II. I don’t have a specific long term solution to propose but I suggest that we tread carefully with begging for the internet to be regulated.