There are several reasons to think that a Biden
administration (if the electoral vote count holds) will resurrect net
neutrality, a policy adopted by
the Obama Federal Communications Commission (FCC) in 2015 and then reversed by
the Trump FCC in 2017. A Biden FCC might reinstitute the policy: FCC
Commissioner Jessica Rosenworcel called the 2017 decision “corrupt.” More recently,
Commissioner Geoffrey Starks declared that
the fight for net neutrality is not over.
There could be White House support for the policy: Vice President elect Harris supported net neutrality in the past. And executives of Facebook and Twitter — two companies that have been strong supporters of net neutrality — now have prominent roles on the Biden transition team.
Yet there are reasons to believe a Biden administration will
actually kill net neutrality. Reinstituting net neutrality will demonstrate its
folly, causing it to finally die, although not before doing damage. Big Tech
companies might soften their support of the regulations. And finally, the
administration might put resources into attacking Big Tech rather than into net
neutrality. Let’s take a closer look.
Reason 1: Revived net
neutrality regulation will demonstrate its folly
Net neutrality regulation would hinder internet development.
How do we know? Lifting net neutrality regulations in 2017 improved the
American internet’s performance relative to more regulated contexts. As my AEI
colleague Bret Swanson noted, US internet speeds rose 40 percent in 2018. And as
I wrote earlier this year, “During the pandemic,
networks in countries without net neutrality performed better than networks in other countries. And economic
research has shown that net neutrality regulations are more likely to hinder internet development and innovation
than help it.”
Net neutrality facilitates this result by limiting funds for
expanding the internet. In 2018, I demonstrated how network providers increased debt by
about $264 billion to develop wireless broadband while software and content
providers that use the networks accumulated about $207 billion. Unsurprisingly,
Google, Netflix, and Facebook have spent billions of dollars developing
specialized networks (see here, here, and here) that would not be subject to net neutrality
Net neutrality regulation would also slow US 5G development.
In 2017, I explained:
5G will use network slicing, which enables multiple virtual networks on a common physical infrastructure. Each slice can be customized for specific applications, services, customers, etc. Network slicing means the end of treating all internet traffic the same — if that ever really happened — which was supposed be a core principle of net neutrality. 5G explicitly customizes the network to different types of traffic.
This understanding was recently picked up and expanded on by professors from the University of
Reason 2: Big Tech
may choose to soften their net neutrality support
Big Tech provided much of the energy supporting net
neutrality regulation. But their arguments for net neutrality have come back to
Google was the first to take a hit about 15 years ago when
its critics replaced “net” with “search” and used Google’s net neutrality
arguments to invent search
neutrality. Swanson predicted in 2017 that other Big Tech companies’
arguments for net neutrality would be used against them. A year later,
Investor’s Business Daily observed that Big Tech’s arguments to the FCC
supporting net neutrality regulations were equally valid as arguments for
regulating Big Tech. No wonder the Democratic House Judiciary Committee
staff report advocating regulation and breakup of Big Tech
borrowed the verbiage Big Tech itself used for promoting net neutrality.
It should not be lost on Big Tech that their net neutrality
arguments are being used against them.
Reason 3: An emphasis
on Big Tech antitrust cases could starve net neutrality
The Biden agenda includes ambitious policies for higher
taxes, greater health care regulation, and some form of the Green New Deal.
Pursuing these will consume time, money, and political capital. Whatever
resources the administration puts into tech issues will have to be divided
between antitrust cases already started by the Trump administration and those
advocated by Democrats in Congress, net neutrality, and more.
Pursuing antitrust cases against Big Tech could result in net neutrality being delayed for at least two years. By then, customers of 5G networks should see the value of network slicing and customization and become supporters of keeping these valuable features. The superior performance of US internet services will become even more obvious. And proponents of expanding broadband should see examples of internet service providers using newfound revenue from advanced networking to fund internet expansion.
What’s the bottom
Net neutrality will show itself as an idea whose time never
came. Unfortunately, Americans may need to fall behind people in less
regulatory countries — and our internet service providers may fall deeper into
debt — before the lesson is learned.
(Disclosure statement: Mark Jamison provided consulting for Google in 2012 regarding whether Google should be considered a public utility.)