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The FCC Needs To Abolish a Lot More than Net Neutrality

December 19, 2017 in Economics

By Sam Estep


By: Sam Estep

The end of the Obama administration's regulatory regime known as net neutrality has brought with it prophecies of impending doom from across the political spectrum. Leaving aside the hyperbole, most objections stem from concerns that Internet service providers (ISPs) will start “discriminating” by offering preferential speeds and bandwidth allocation to certain websites or companies that pay for a higher tier of service. ISPs would, therefore, start to throttle the Internet speeds of normal users. This may well be the result, however, imposing stifling regulations that cement the current dominant players is only going to make to situation worse.

The reasons ISPs might be inclined to engage in these practices are mainly twofold: one, ISPs lack any competition in many parts of the country. Two, Internet traffic is increasing and ISPs are looking for ways to raise capital in order to accommodate that growth.

Before we address these issues it is worth making an important distinction: so-called “net neutrality” isn't simply a regulation, it is a total reclassification of the Internet from an “information service” to a “telecommunication service.” This may seem like simple semantics, but the latter classification has been around far longer, and has, consequently, accumulated a bevy of regulations and restrictions confining it.(In fact the classification “information service” was created specifically to help the Interet avoid the more stringent regulation of telephone and cable services.) The FCC’s goal in this reclassification was to bring the Internet under the purview of Title II of the Communications Act of 1934, specifically, SEC.202:

It shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with like communication service, directly or indirectly, by any means or device, or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.

However, this reclassification has far more implications than the above. One must only peruse a little further down Title II until they happen upon this passage from Sec 214:

No carrier shall undertake the construction of a new line or of an extension of any line, or shall acquire or operate any line, or extension thereof, or shall engage in transmission over or by means of such …read more


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