FORECASTS & TRENDS E-LETTER
by Gary D. Halbert
October 24, 2023

IN THIS ISSUE:

1. What is Net Neutrality & Why Does It Matter?

2. Five Years In: Internet Thrives Without Net Neutrality

3. Here We Are, Five Years Later & No Internet Disasters

4. The Net Neutrality Fight is Far From Over

Overview

As always, I like to keep my readers informed on important federal policy decisions that will directly affect them. In the first several months of his presidency, Joe Biden signed an executive order encouraging the Federal Communications Commission (FCC) to reinstate net neutrality rules repealed during the Trump administration in 2017.

On October 19, the Democrat-controlled FCC voted to advance a proposal to again impose net neutrality rules and assume new regulatory oversight of broadband Internet. Since most of our lives increasingly revolve around the Internet, this move potentially affects our free and open use of broadband networks.

As we all know, the Internet is the global system of interconnected computer networks that link electronic devices worldwide. It is a network of networks that consists of private, public, academic, business and government networks of local to global scope – linked by a broad array of electronic, wireless and optical networking technologies.

Long time readers will remember my 2018 article applauding the repeal of Obama era rules on Network Neutrality, or more commonly “Net Neutrality.” But my impression is that most Americans still don’t know what it means.

The most impressive thing about the Internet, in my opinion, is that it has grown to worldwide dominance without any single centralized governance, either technological implementation or policies for access and usage. Each constituent network sets its own policies. Pretty amazing!

That is, until President Obama in his second term decided the Internet needed to be regulated.

President Obama was successful in ramming through his plan for the government to heavily regulate the Internet, which was fully implemented by early June of 2017. But a year later, President Trump took executive actions to repeal the Net Neutrality rules almost entirely.

The Democrats and the mainstream media warned that dismantling Net Neutrality would be a disaster. They desperately wanted the government to continue regulating the Internet. Well, it’s now been over five years since President Trump repealed it, and no disaster or even a hint of it has occurred. In fact, the Internet has continued to grow and evolve in amazing ways.

But before I get started, I must tell you that Net Neutrality continues to have a broad base of supporters, especially among Democrats and liberals. Let’s jump right in.

What is Net Neutrality & Why Does It Matter?

Net Neutrality is the principle that Internet Service Providers (ISPs) – such as AT&T, Verizon, Comcast, Spectrum, Frontier and others – must treat all Internet communications equally, and not discriminate or charge differently based on user, content, website, platform, application, type of equipment or method of communication.

With Net Neutrality, ISPs may not intentionally block, slow down or charge money for specific online content. Without Net Neutrality, the advocates say, ISPs may prioritize certain types of traffic, meter others or potentially block traffic from specific services, while charging consumers for various tiers of service. As we’ll see below, that is not happening.

But I’m getting ahead of myself.

Proponents of Net Neutrality – which include computer science experts, consumer advocates, human rights organizations, Internet content providers and the like – claim that Net Neutrality helps to provide freedom of information exchange, promote competition and innovation for Internet services and upholds standardization of Internet data transmission, etc.

Opponents of Net Neutrality (including me) – which include Internet entrepreneurs, ISPs, telecom equipment manufacturers and others – assert that Net Neutrality requirements reduce their incentive to build out the Internet, reduce competition in the marketplace and may raise their operating costs, which they would have to pass along to their users.

And why does this matter? It matters because there is a fundamental difference between those of us who want to see the Internet continue to evolve on its own, as it has phenomenally done, and those who think it should be highly regulated, despite the possible consequences.

Five Years In: Internet Thrives Without Net Neutrality

It’s been five years since the FCC repealed Net Neutrality. And how have the predictions of doom and gloom held up? 

In the time these Obama-imposed rules were in effect, many came to believe the regulations were the only thing standing between a vibrant Internet and a hellscape of greedy Internet Service Providers blocking access to sites, creating slow lanes and making it difficult for many new entrants to get a foothold.

From every corner of the news media and advocacy world, we heard how repealing these onerous rules “would be the final pillow in (the Internet’s) face” (New York Times), would cause “erosion of the biggest free-speech platform the world has ever known” (ACLU) and would be the “end of the Internet as we know it” (CNN).

One of the Democratic commissioners on the FCC predicted that the Net Neutrality repeal would “green light our nation’s largest broadband providers to engage in anti-consumer practices, including blocking, slowing down traffic and paid prioritization of online applications and services.”

Net Neutrality’s advocates were so fearful of the Internet’s demise that they staged numerous protests, and even issued death threats to Trump’s FCC Chairman, Ajit Pai, shown at left.

Thankfully, Pai and the other non-ideologues on the Commission prevailed. And the rules imposed by Obama, which had been in effect since mid-2017, were overturned. That repeal officially went into effect on June 11, 2018.

Well, Here We Are, Five Years Later & No Internet Disasters 

The Internet is still functioning just fine. In fact, it’s better than ever. According to a recent Allconnect data report, 9 in 10 households can access at least 100 Mbps speeds. Much of this improvement was a result of faster fiber optic connections being installed around the country, mostly paid for by Internet Service Providers.

There are more users than ever, more videos to watch, more content to consume. More commerce is being conducted. Few, if any, sites are being blocked. No one is complaining that their service is being throttled, and more people are gaining access to broadband (high-speed Internet).

Elon Musk’s SpaceX continues to launch mini satellites for his “Starlink Initiative,” which will provide broadband Internet to subscribers wherever they are on the planet. 

It all means more competition among ISPs for consumers. Since the entire justification for government intervention was the (dubious) claim that there’s no competition among Internet Service Providers, these latest positive developments alone should weaken the case for a heavy-handed scheme of government regulations imposed in the name of the consumer.

And as to the warnings about free speech: To the extent that free speech is being impeded on the Internet, it isn’t coming from the Internet Service Providers like Comcast or Cox, but from Big Tech companies like Facebook, Google and YouTube. They, not the ISPs, are the ones restricting access to content they don’t like, removing it altogether or making it unprofitable.

Specifically, Republicans and ISPs have generally opposed that the FCC’s rules would reclassify the providers under Title II of the Communications Act of 1934, which would regulate them as a public utility. Opponents fear that could eventually open the door to the commission imposing price controls on ISPs.

The Net Neutrality Fight is Far From Over 

FCC Chair Jessica Rosenworcel announced her intention to reestablish Net Neutrality rules shortly after Democrat Anna Gomez was sworn in this September as the fifth and final commissioner at the agency, establishing a Democratic majority for the first time during the Biden administration.

Republican FCC Commissioner Brendan Carr pointed to statements from Democratic lawmakers in support of net neutrality and called the earlier campaign for the rules a “viral disinformation campaign.”

“The goalposts have moved but the goal remains the same: increasing government control over the internet,” Carr said.

“We’re now faced with advocates who can’t accept that they won and that we have de facto net neutrality,” Republican Commissioner Nathan Simington said.

“From my perspective, ISPs are the most competitive they’ve ever been and forcing utility regulation onto them now is the wrong move at the wrong time,” Simington said.

At the end of the day, the Internet is doing just fine without Net Neutrality. In fact, it’s doing better than ever. More people have access to the Internet than ever before. Speeds are faster and will continue to get exponentially faster as fiber networks expand throughout the country.

I hope this was helpful – feel free to share it with others.

Best regards,

Gary D. Halbert

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