Blocking Internet Regulations – Good for Consumer Choice and Innovation

Earlier this month, an appeals court struck down the Open Internet rules imposed by the Federal Communications Commission (FCC). The lawsuit, filed by Verizon, claimed that these rules went over the line, imposing far too strict of regulations on Internet Service Providers (ISPs). The rules had said that ISPs were barred from regulating their own networks, either through content prioritization or the use of applications or devices. This strikes a major blow in the fight over net neutrality, with this ruling in essence opening the Internet back up from government regulation.

This ruling is good news as it allows for more freedom for more consumers, away from the regulatory arm of the government, leaving room for the Internet to grow and thrive. The Internet has become what it is today because it’s been, largely, unregulated. It’s hard to see how more regulation would help to improve innovation.

This ruling allows the possibility of lower costs to many consumers. As ACI’s own Alan Daley points out, millions of Americans rely on the Internet everyday for tasks as simple as checking email or online shopping—relatively low intensive bandwidth tasks. Why should a consumer necessarily be forced to pay the same prices as those streaming video or playing video games over the Internet? They shouldn’t, and this ruling allows for a future where that doesn’t happen.

Net Neutrality is just another regulatory burden hung on the necks of innovative entrepreneurs and consumers. Startups requiring a “fast-lane” could potentially be barred from getting one, for instance—imagine a future where those attempting to practice telemedicine are met with a buffering message, because they’re competing for bandwidth with a teenager playing Call of Duty.

Open Internet and Net Neutrality rules force ISPs into a terrible situation of not being able to consider any content for any reason. Even tech titans such as Netflix understand the need to deliver their content faster than other content, which is where the concept of Open Connect comes from, something Netflix has embraced. As Nobel Prize winning economist Gary Becker told the Chicago Tribune, net neutrality “prevents a lot of pricing and access that would improve efficiency.”

The reaction from the tech community has been mixed.

ISPs have obviously welcomed the news, while others have protested. Netflix, for instance, has said they will rally their customers against ISPs should they attempt to violate the principles of net neutrality, which is ironic since you could consider their actions in violation of those same principles. But Netflix’s warnings also show the weakness of arguments against Net Neutrality—these warnings show that the market will prevail. If the consumer base sees something they don’t like, they’ll revolt. Consumers have choices, and they’re able to vote with their dollars.

Net Neutrality still lurks around the corner, however. The ruling, in some people’s eye, gave even more power and authority to the FCC, providing a roadmap for how to proceed on further regulations. It also affirmed the FCC’s power over Internet regulation. Proponents of Internet freedom should be vigilant, as the fight is most likely far from over.

Zack Christenson is a research fellow for the American Consumer Institute Center for Citizen Research, a nonprofit educational and research institute.  For more information, visit www.theamericanconsumer.org

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