Increasingly, Americans are being encouraged to view broadband internet service as a public utility rather than a private good. The Federal Communications Commission has even gone so far as to regulate it as such, under Title II of the Telecommunications Act. This has some huge implications for how the internet will be governed in the future, some of which I’ve explored more deeply elsewhere. But here, I’d like to argue that internet service doesn’t meet the criteria of a public utility in the first place, and that there are consequently no grounds for the kinds of regulations the FCC has imposed.
For example, the spectrum of radio waves on which it’s possible to broadcast is finite. Only so many stations can coexist within a given area, and if too many try to compete with one another, you get nothing but noise and interference. For this reason, the FCC started granting licenses to broadcasters, which it of course could revoke if any content was deemed objectionable. It is only more recently, since 1994, when the agency backed off from federal ownership of the airwaves, electing instead to sell them off to the highest bidder, albeit while contain some semblance of control.
The regulators would like you to think of broadband as if it were a railroad, with only enough room for one set of tracks.
With the advent of digital radio, however, no such limitation exists. We now have access to thousands of stations, happily broadcasting alongside one another with no need to compete for physical airspace (and although there remains the problem of divvying up orbital space for satellite placement, that issue is beyond the scope of this article.) The FCC’s role in regulating radio is made redundant by the infinite choices we now enjoy.
The internet is in a similar position. There is no inherent physical limit on internet access, it’s only a matter of how much infrastructure a company wants to put into providing it. The reason it seems like there is limited choice in providers is not because of physical limitations, but because of government-granted monopolies. The regulators would like you to think of broadband as if it were a railroad, with only enough room for one set of tracks. But in fact, local governments partner with utility companies to dictate who can compete in their jurisdictions, resulting in inefficient monopolies, which are then somehow blamed on the free market.
There have been complaints that broadband providers have not been investing heavily enough in research and development, and that this is a justification for increased regulations. First of all, what is “enough” and why should a federal bureaucrat get to decide that? And second, if you ran a company that was being generously shielded from competition by government, you probably wouldn’t feel under too much pressure to innovate either. Just look at the other utility monopolies: electricity, water, gas. These are all controlled by the government, and yet how much competition and innovation do you see in those industries? It’s foolish to think the internet can be made somehow better by forcing it into the mold of other utilities that demonstrably don’t yield good results.
It’s no secret that the FCC only classified the internet as a public utility in order to advance President Obama’s Net Neutrality agenda. Even the agency itself made no strong claims that broadband should be treated analogously to utilities, only that, after a court struck down its previous Net Neutrality rules, there was no other way for the agency to legally impose the regulations Obama was asking for. But is that really the way politics in this country should be conducted? Should we really be willfully misclassifying major sectors of the economy to exploit a loophole in the law?
The correct way to deal with the internet is to let it be free. Net Neutrality rules have to go, but just as importantly, we need to give up the fantasy that it should be treated like a utility, and stop letting local governments decide which companies can compete to provide internet access. Deregulation is the best, indeed the only way to ensure that the internet enjoys the robust competition and fierce innovation enjoyed by the millions of other, non-utility goods our economy produces.
Logan Albright is a researcher for Conservative Review and Director of Research for Free the People. You can follow him on Twitter @loganalbright73.