Their view: Despite Senate win, net neutrality rules near death: Send no flowers

James Gattuso - Guest Columnist
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Supporters of the FCC’s neutrality rules just won a close one, prevailing in a razor-close Senate vote to save them from repeal.

The pro-regulation crowd now finds itself in the position of the proverbial dog that caught the car. What to do next? It’s too big to eat, and too small to live in.

The official line from the supporters — who see themselves in almost biblical terms as saviors of the Internet — is that the momentum created by the Senate vote will energize voters nationwide to join their crusade for red tape. Faced with this public pressure, the House will (the reasoning goes) also vote to save the rules, and the measure would be signed by President Donald Trump because, well, because Trump.

The trouble with this strategy is that this isn’t a Frank Capra movie, and Mr. Smith isn’t going to be in Washington anytime soon.

This isn’t the first time supporters of neutrality regulation have imagined themselves at the head of a vast popular movement for regulation of the internet. Eight years ago, they got 95 House and Senate candidates to sign a written pledge to implement net neutrality if elected.

The voter response was clear: Everyone lost. Everyone. Not a single candidate supporting regulation survived the carnage.

Of course, much has changed since 2008. But there is little to indicate that this is the year for regulatory populism on the internet. Certainly, supporters have made a lot of noise — even picketing the home of Federal Communications Commission chairman Ajit Pai. However, that hasn’t made it a campaign issue. Looking forward, it likely to recede even further, as predictions of a digital Dark Age descending on the world prove to be unfounded.

Waking up on June 11 — the date set by the FCC for the termination of the rules — Americans will find little changed. Their favorite websites will still be accessible, Internet speeds will not have changed, and political debate will still be lively. The world without broadband regulation in 2018 will look a lot like it did before rules were imposed in 2015.

This should not be surprising. Despite claims by die-hard supporters of the Obama-era rules, net neutrality is not necessary for the health of the internet economy. In fact, it is positively toxic.

At the core of net neutrality regulation is a prohibition on broadband Internet service providers (such as Verizon and Comcast) charging different rates, or offering different service levels, to content providers, such as Netflix and YouTube. For instance, the rules specifically ban “paid prioritization,” which means charging more for better services, or less for more-limited service.

However, such service prioritization is hardly unusual or harmful. In fact, it exists in almost every product market in America. Try buying an airline ticket, gas for your car, or even new clothes, and you will find this kind of differentiation going on. And it almost always operates to the benefit of consumers.

While the left-leaning activists have grabbed the headlines, the campaign for neutrality has long been fueled by big Internet companies. These firms saw benefits in hobbling the ISP’s and other potential rivals with costly regulation. However, the relative ubiquity of differentiation in Facebook’s, Google’s and Amazon’s own markets may spell the end of their campaign for mandated neutrality for internet service providers.

But the calculus is quickly changing, as these big firms increasingly find their own practices questioned. Advocating FCC regulation of rivals is quickly becoming untenable- as their businesses increasing resemble the ISPs.

Net neutrality rules are not needed and are positively harmful to the internet. The good news is that the pro-regulation forces on Capitol Hill are unlikely to succeed in re-imposing this noxious brew on the web.

Net neutrality advocates have captured a big dog. Now they should let it go free.

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James Gattuso

Guest Columnist

James Gattuso is senior research fellow in Regulatory Policy at The Heritage Foundation.

James Gattuso is senior research fellow in Regulatory Policy at The Heritage Foundation.