By now even most of my
undergraduate students at Penn State have heard about the FCC’s likely
reclassification of broadband access from information service to
telecommunications service. So much attention has focused on the
reclassification and so little on the real problem: stimulating investment,
market entry and facilities-based competition in broadband service.
Show me a robustly competitive broadband
marketplace and I will show you an ecosystem that has no network neutrality problem.
Regulating
broadband access as common carriage offers no panacea. Even with light handed regulation, the
potential exists for extraordinary waste and distraction in litigation and a “regulatory
practice” over what an Internet Service Provider can and cannot do. I am concerned that the FCC and stakeholders
will devote far too much time battling over minor points with little concern
for the big picture.
While I am
not keen on Title II regulation, I have every confidence that ISPs can survive
the burden and sustain capital investment levels. The problem in Title II regulation lies in how
it can distract the FCC from its core mission.
Bear in mind that wireless carriers have managed to thrive despite
having the common carrier classification.
So even “public utility” Title II regulated markets can generate ample
profits without apparent investment “disincentivization” resulting from
government oversight. Wireless competition
forces carriers to enhance the value proposition. No carrier would dare degrade its service and
invite subscriber churn.
Thankfully
the FCC and Justice Department did not buy the bogus claim of sponsored
researchers, AT&T and T-Mobile that reducing the number of facilities-based
competitors would serve the national interest.
Once deprived of a big buyout payday, T-Mobile has innovated and
sharpened its pricing pencil. The other
carriers have had to follow T-Mobile’s lead on pricing, roaming, bring your own
device and the ability to rollover data capacity.
A
competitive wireless marketplace provides clear evidence that Title II can provide
possibly unnecessary safeguards without imposing costly burdens. The risk in Title II broadband regulation
lies in its distraction coupled with less than optimal competition.
