Three decades of U.S. telecom policy were reversed on February 26, 2015, when the Federal Communications Commission (FCC), by a 3–2 vote, reclassified broadband telecommunications as a public utility. If the decision survives the current court challenge, the FCC will have unprecedented power to regulate consumer and wholesale broadband pricing, quality of service, and service bundling.
Although the FCC assures it will “forbear” the full scope of regulatory powers it now has under Title II, it has assumed the authority to regulate content and applications, impose additional taxes and fees on services, and use its discretion to respond to any situation or practice where it believes competition, investment, free access, or the utility of the Internet is endangered.
Until now, the prevailing policy toward telecommunications and the Internet supported deregulation of voice services, light regulation of ISPs, and almost no regulation of Internet content and applications. Under this policy, Internet use has grown explosively; a 2014 report estimated 87 percent of U.S. adults regularly use the Internet, up from 79 percent in 2010 and 66 percent in 2005.
There are serious doubts this can continue in the regulated environment the FCC has imposed in recent years. Congress, as well as state and local governments, can resist this regulatory agenda by pursuing proven policies that have worked for years because they stimulate market forces and private industry initiative and respond to real customer needs and wants. The alternative is an Internet that runs at the government’s pace, where every innovation must be examined, evaluated, and approved by government bureaucrats before reaching the public.
Issues such as network neutrality, excessive telecom taxes, and municipal broadband have been matters of controversy for more than a decade. In recent years, widespread adoption of broadband and the general disruption of the digital economy have raised new policy issues. Governments at all levels are now debating privacy, Internet hate speech, and “sharing economy” services such as Uber and Airbnb, which offer tremendous convenience to consumers yet threaten established local businesses.
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