Open markets for internet providers can bridge the digital divide


Many would agree that consistent access to the internet is an important part of life in 2018. It is crucial to participate and thrive in the global economy. We should do all we can to empower broader access to this “great equalizer,” especially because there are those who aim to slow the march of progress.

This summer, agency officials from several states, as well as companies like Alphabet (owner of Google), Facebook, and Amazon, filed suit against the FCC demanding reinstatement of the regulations known as “net neutrality.”

“Net neutrality” is not merely how its supporters explain it: the regulation of large internet service providers (ISPs) to treat all types of data traveling through their lines as equal and prohibit paid “fast lanes” for internet access. Its effects are more far-reaching than that. It means treating the transmission of internet as a public utility under Title II of the Federal Communications Act of 1934. Before, and since the FCC repealed the Obama-era rules, ISPs are classified under Title I, which regards the internet an “information service” rather than a utility. Because of this action, companies in that space are subject to a looser regulatory structure.

If you love the internet, lighter regulation is a good thing. It provides companies with greater incentive to invest in infrastructure and innovate. In the last 10 years, new technologies have been developed to enable more widespread connectivity, especially in underserved rural areas. From TV White Space administration to advances in small cell deployment of 5G mobile networks, private companies–with the blessing of the FCC–are finding better ways to connect us that will ensure America’s place at the forefront of opportunity.

We must not let this moment pass us by.

Consumers, workers, and investors benefit when public servants understand the importance of maintaining an open and transparent market. Lovers of the web should commend Ajit Pai, chairman of the FCC for his efforts to cut out unneeded bureaucracy and preserve incentives for ISPs to invest in their systems. These reforms benefit real people. Lower costs in the market mean lower prices for customers, more innovative technology and increased infrastructure investment (a.k.a. jobs). An open market means a more connected world, which empowers more people to pursue their passions and interests, to explore new cultures and ideas, and to participate in economic growth.

The more we can do to empower industry to solve issues of reliable coverage, the quicker we can bring vital connectivity to underserved areas and enhance the ability to start and grow a business, study for school, facilitate medical access in remote areas or communicate across continents. For those of us living in areas of strong and reliable internet access, these are aspects of life that are so ubiquitous, we almost take them for granted.  It is remarkable that our expectations have changed so quickly, since it has been not more than 30 years that some of the public has had access to the internet at all. In much shorter time than that we have had wireless access on mobile devices.

It can be very difficult to make the case for freer markets because we cannot predict precisely what will happen, but that’s the point. Those skeptical of capitalism will point to this uncertainty and say that companies will neglect their customers in pursuit of the slimmest profit and higher pay for executives. What a painful vision of human nature to inherit! It is ridiculous to assume that a corporation will snub customers while it has to compete for those same customers. If people have choices, companies must compete and they will become more accountable.

The market for internet today is less than ideal. It’s most likely that your ISP is one of a small cohort of cable companies dividing up territory in which they provide exclusive access. This is what both free market supporters and skeptics are trying to avoid, and is the best reason to open the market for internet service providers.

Supporters of “net neutrality” do not understand that further restrictions on these companies (current and future) will end up blocking competitors from entering the market and potentially offering cheaper and better service. By treating internet connection like a public utility, we decide–with substantial hubris– that we have the best answer at the present moment. We double down on a potentially inefficient solution to a crucial part of life.

The companies seeking protection from competition–the “rent-seekers”–are only those large companies who have the legal resources to lobby regulators. They are the only ones who can leverage the immense power of government to their advantage. Make no mistake, this is not capitalism.

This is corporatism: the collusion of government and private industry.

To eliminate this phenomenon, we should reduce the power held by government these rent-seekers seek to exploit. They would not spend so much on lobbying if it didn’t work. Get rid of the looming power of the state, and you will see the money spent to influence that power start to wane.

The best safeguard against corporatism and corruption is diffused, lighter, and less-centralized government power. Restoring “net neutrality” would concentrate that power in government, and the only beneficiaries will be the companies who can afford to go to the dance.