Internet Public Policy Issues - The American Consumer Institute

In 2018, the Federal Communications Commission (FCC) under former President Donald Trump repealed the Open Internet Order (OIO) instituted by the FCC under the Obama Administration. The OIO reclassified fixed and mobile broadband under Title II of the Communications Act of 1934 which permitted the government to heavily regulate internet service providers (ISP) as “common carriers.” Instead, the Restoring Internet Freedom Order (RIFO) returned these providers to their former classification, preventing the government from imposing extra rules on ISPs and putting a halt to network neutrality in the United States.

The OIO imposed burdensome regulations on ISPs that slowed investment and raised costs on consumers. Now, the new administration is committed to reapplying similar regulations. Jessica Rosenworcel, Biden’s newly appointed Acting Chairwoman to the FCC, is also a proponent of net neutrality.  Her confirmation would make heavy-handed regulation over the internet much more likely to return during this Administration.

Reinstituting harmful regulations on ISPs would not be beneficial for the American people. Since the soft-touch approach was reinstituted in 2018, average speeds have more than doubled, and billions of dollars more have been spent on new broadband infrastructure. As a result, millions of jobs have been added to this industry, and while the digital divide between rural and urban areas still exists, many more people now have access to crucial broadband internet services at higher speeds than ever before.

The COVID-19 pandemic has brought into focus the importance of having access to broadband at home. The U.S. Census Bureau data found that in November 2020, 37% of U.S. adults were working from home. Since the implementation of RIFO, the number of people who have access to internet service has increased, and especially so for those in rural areas. Gigabit internet service is now available to 85% of households in the United States. While the OIO was in place, the number of rural Americans who had access to broadband dropped to 50%. Since the repeal, that number has returned to 63%, the highest amount since December 2013.

Supporters of net neutrality argued speeds would slow down significantly because of RIFO, and companies would begin requiring consumers to pay for websites they currently access for free. Not only has none of this happened since the repeal of the OIO, but speeds have more than doubled since RIFO was introduced. Data from the FCC shows that the average advertised download speeds in the U.S. in 2017 were around 70 Mbps. In 2018, when RIFO was introduced, averaged speeds soared to 135 Mbps. By 2019, advertised speeds reached 146 Mbps, more than twice the amount from the same period two years earlier.

The RIFO has also incentivized a boost to both private and public investment in nationwide infrastructure. According to a survey conducted by the Cellular Telecommunications and Internet Association, wireless investment grew to $29.1 billion in 2019. Furthermore, about 46,000 new cell sites were activated, more than the prior 3 years combined while the Open Internet Order was in effect. Most of this investment is into 5G ready cell sites and antennas, which will be enormously beneficial for the future of the American economy. According to The Boston Consulting Group, 5G could contribute $1.7 trillion to U.S. GDP and create 4.6 million jobs in the next decade.

Reapplying network neutrality now would have drastic negative effects on the economy and its workforce. US Telecom found that under the OIO order in 2016 nearly $3 billion less was invested in broadband. In 2017, with the return to light touch regulation, growth in investment resumed and investment rose by nearly $6 billion over the next two years. A study by the New York Law School concluded that continuing to regulate under Title II of the Communications Act of 1934 would have cost up to 700,000 jobs and $80 billion in GDP over the next decade. The RIFO has done exactly what it promised to do. It has spurred investment and innovation as well as provided broadband to more consumers nationwide.

Today, there still exists a digital divide between rural and urban areas, but more people of all backgrounds are getting connected to broadband service thanks to RIFO, and investment in new 5G infrastructure is well underway. Bringing back the harmful regulations under Title II would have serious consequences for the future of the American economy. Lawmakers should continue to apply a soft-touch approach to ISPs and avoid the policy of network neutrality.