Net neutrality is a bit like a sugary, glazed, iced doughnut. It looks so appetizing sitting there on the bakery shelf, and tastes delicious going down, the chocolate icing giving it an extra kick of sweetness, but the fat it adds to your midsection and the heartburn it gives you two hours later are hard to get rid of.
Better Internet speeds for all, the Netflixes and the Googles as well as tiny start-ups, sounds good — and is — until you find out what may be down the road.
The bottom line is that the Federal Communications Commission (FCC), in a 3-2 party-line vote on Thursday, handed government significant control over the Internet.
Ask businesses what government regulation has done for them, especially since the Obama administration took office. Ask anyone without government-subsidized insurance how much their premiums have gone up since the advent of the Affordable Care Act.
The Internet has been, in the words of an AT&T executive, whose company was against net neutrality, “one of the greatest engines of economic growth, investment and innovation in history.” What it will become now is likely something less.
While the FCC ruling is supposed to better level the playing field for Internet users in the short term, in the long term users can expect to see an overall slowing of broadband service and higher rates because of government regulation.
By classifying the Internet as a “telecommunications service,” subject to 1934 rules, instead of an “information service,” the government treats it similarly to a utility being regulated. As with other utilities, the government now can require the industry to act in what the government considers to be the public’s interest and now can fine companies found to be employing what the government considers to be “unreasonable” business practices.
Ajit Pai, one of the FCC commissioners who voted against the plan, said one need only look at the slower Internet speeds in Europe, where the Internet is treated more like a public utility, to see what’s ahead.
As to increased costs, the new regulations defer a service fee on Internet bills — as currently applied on telephone bills — but opponents say that unquestionably will change. And the FCC says it won’t apply some sections of the 1934 rules, including price controls, but opponents say more rate regulation is practically a given.
When larger companies are not allowed to compete by offering faster Internet speeds — because now all must have it — investment in the industry will slow, Pai said.
Republicans have made noises about passing legislation that would drop the new rules, but — as with any bills — they must be signed by President Barack Obama, who sought the new regulations from the supposedly “independent” agency, or overridden with a veto.
The broadband industry is also likely to sue over the new plans, so the unfortunate net neutrality ruling — the 332-page totality of which is not being released publicly — is likely to remain a hot topic.
* Another FCC ruling Thursday had local implications — and some of the same, doughnut-like dichotomies.
The federal board handed local government-owned EPB a victory, overruling state laws and allowing the Chattanooga-based utility (as well as one in Wilson, N.C.) permission to expand beyond its original footprint.
For residents and businesses close by but not in that footprint, or in rural areas without any high-speed service, that means they could in the future have access to EPB’s gigabit-per-second Internet speed. That would be a plus for any student in those areas who needs the Internet for research or for any business that wants to grow and innovate through use of the web.
The problems, though, are several.
On the one hand, a utility such as EPB has the full faith and credit of a local government behind it, while the private sector has no such backing to expand. On the other hand, local residents say they’ve been asking private providers to expand to their areas without success.
Private providers must weigh the costs of such expansion in order to maintain a profitable business, and EPB now says it, too, only will expand into areas where it makes financial sense to do so (and if a formal request by elected officials for its service are made). But government-backed entities don’t have quite the same bottom-line onus private providers do.
In addition, any unelected federal agency like the FCC that can supersede state rules on a whim makes all of us a little less free and keeps more power in the hands of big government. That’s never a good thing.
However, since federal legislation has been introduced that would nullify this vote, too, look for the communication industry communication to continue a while longer.