Net Neutrality and Broadband Investment for All

A wise Federal Communications Commission chairman noted that “the best decision government ever made with respect to the internet was … NOT to impose regulation on it.” Who said that? Republican Chairman Ajit Pai? Republican Chairman Kevin Martin? No, it was Bill Kennard, the Democratic chairman appointed by President Bill Clinton. Kennard’s smart, future-focused, pro-innovation and pro-consumer philosophy — followed by chairmen of both parties for two decades — established an investment-friendly regulatory climate that resulted in more than $1.5 trillion in broadband network investment, and with it, America’s world-changing internet technologies, applications and services.

Kennard’s words remain as true today as they did in 1999. Pai’s plan to unwind the 2015 Open Internet Order, which regulated broadband service like an early 20th century telephone monopoly, is the right start.

Broadband providers support net neutrality. They support permanent, enforceable rules against blocking, throttling or unfair traffic prioritization. They don’t support utility-style rules that leave the door open to heavy-handed regulation such as price controls or regulated sharing, or unbundling, of privately owned network infrastructure.

This debate shouldn’t be about whether we should have net neutrality protections or network investments. We can have both.

When former FCC Chairman Tom Wheeler yielded at the 11th hour to the Obama White House’s misguided idea to regulate the internet as a public utility, he promised a “modernized Title II tailored for the 21st century.” He said the agency would only use its new authority to enforce the parts of Title II that were (in his view) really necessary at the time, using a regulatory tool called “forbearance.”

But as D.C. Circuit Judge Janice Rogers Brown recently noted, that “modernization” was, in the FCC’s own words, “‘atypical’ and ‘expansive’ – including at least 30 Title II provisions and 700 rules promulgated under them.” Even when the FCC did exercise regulatory discretion, it suggested it was only refraining from imposing certain actions “for now.” There are more than 40 references to rules not applying “at this time” or promises not to regulate “for now.”

Title II of the Communications Act has 48 Sections, with more than 225 subsections. In the FCC’s “Common Carrier Services” rules, there are 20 sections, with almost 1,500 subsections. The agency left open the option to cherry-pick regulations that cover everything from rate regulation, to the filing of tariffs, telephone operator services and a host of other outdated obligations.

Just a few months after the release of the Open Internet Order, Wheeler announced plans to regulate business broadband connections, declaring that past forbearance is “not chiseled in marble.”

This is not regulatory certainty. And nobody who really cares about the internet’s future should be duped into believing that utility regulation is either pro-consumer or innovation-friendly. It is neither. The bottom line is that increased regulation, or the strong threat of it, reduces investment. Some will say that carriers will continue to invest regardless. And of course, internet service providers will likely continue spending to maintain their networks. But maintenance isn’t the same as expansion.

These rules do not provide confidence for companies to invest billions in new infrastructure. If we’re serious about closing the digital divide, and ensuring millions of Americans in rural areas get connected to high-speed internet service, we can’t afford policies that depress new investments.

Under the current rules, with the Title II sword of Damocles always hovering, broadband innovators lack the regulatory certainty they need to confidently invest in, and build for, the future. Before the election, buoyed by the advocacy of a handful of out-of-touch public interest lobbying groups in Washington, the FCC was on the path toward using its new Title II authority to declare that wildly popular free wireless data promotions were sometimes not allowed. If free streaming video or music isn’t okay, what’s next?

Broadband providers need to know that they can innovate, invest and operate their networks without constantly worrying about federal bureaucrats second-guessing their decisions or micromanaging their businesses.

Continuing down the Title II path isn’t necessary for achieving effective and strong net neutrality. We can have net neutrality protections – no blocking, throttling or unfair traffic prioritization – without regulations that stifle future network investments. Pai’s proposal is an important first step. But ultimately Congress should step in to ensure that we have permanent, enforceable net neutrality rules that provide certainty for everyone – consumers, innovators and ISPs.


Jonathan Spalter is president and chief executive officer of USTelecom.

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