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Should We Treat the Internet Like a Utility?

The FCC is looking to get its hands on the internet again, this time with a set of sweeping set of regulations known as Title II. Essentially, this would allow the internet to be regulated like any other public utility. Defenders of the plan argue that regulation is necessary to preserve competition and protect small startup companies.

There are plenty of solid economic arguments for why all this is nonsense, but we don’t need to delve into the arcana of academic studies or economic theories to see that it doesn’t pass the smell test. We need only look at the world around us, and observe the effect that regulating utilities has on consumer choice.

Simply take a look at the companies you buy from every day. How much choice do you have, for example, over your water carrier? If you decide you are paying too much for water, or you don’t like the taste, how easy is it to find another provider? Not very. The same goes for electricity. Has government regulation of this public utility resulted in lots of firms competing for your business, or are you pretty much stuck with whatever you’re given?

Contrast this with other services where regulation either doesn’t exist or has been loosened considerably. In 1996, the government amended the Communications Act of 1934 to decrease regulation on telephone service and allow more firms to enter the market. Anyone who lived through the 90s doubtless remembers the fierce competition between AT&T, MCI, and Sprint trying desperately to convert customers. The comparatively lighter regulations of the post-1996 reforms forced companies to cut prices and improve service in order to retain the business that government had previously guaranteed them.

Then there are the countless other services we use every day that are not regulated as utilities. For virtually any consumer product, we are treated to a wide variety of styles, of hugely varying levels of quality and price. Consumer choice is paramount, and we all benefit from it. Public utilities, on the other hand, are essentially an excuse for government to create monopolies and oligopolies, where the lack of competitive pressure pushes prices up and quality down.

Furthermore, providing internet service doesn’t involve any of the physical limitations inherent in other utilities. Internet service has no requirement for laying networks of wires or pipes in order to function effectively. This observation eliminates a large portion of the rationale given for regulating other utilities, and undermines the pretense of consumer welfare.

We should trust the evidence of our senses. The internet is working well as is. It is a hub for uniquely creative and innovative activity, whose equal has never been seen. The other utilities, under heavy government regulation, are stagnant, with a marked lack of competition and of consumer choice. Let’s keep the internet free from government meddling, and preserve the unregulated information superhighway we’ve all come to know and love.

5 comments
12/08/2018

"the lack of competitive pressure pushes prices up and quality down."

Doesn't the government charge as little as it can, while private coorperations charge as much as they want? And where is the competitive pressure? I only have ATT, Comcast refuses to build out to me unless I pay $10,000. My brother's municipal internet in Colorod, IL pays 1/4 what I pay in Toledo, OH, and his service is 100 times as fast!

"Furthermore, providing internet service doesn’t involve any of the physical limitations inherent in other utilities. Internet service has no requirement for laying networks of wires or pipes in order to function effectively."

When any carrier comes out in their truck to give you service, they have to run wires to your house. The last hop between your router and your ipad might be wireless, but everything else is wired because wireless is really slow. This is one reason why we have so little competition between internet providers.

"The internet is working well as is. It is a hub for uniquely creative and innovative activity, whose equal has never been seen."

The internet is a miracle, but that doesn't mean we can't make it better. Telco is making record profits off uncompetitive internet at the expense of us consumers. They don't compete with each other, they don't invest in their infrastructure, and they charge whatever they want. And that's why telco fights tooth and nail against municipal broadband: so we can all be stuck with crappy internet. Regional monopolies are only good for the monopoly, not for us.

Muezick's picture
Muezick
11/16/2014

Are you an idiot dude?

When I moved into my current apartment, I had 7 choices for electric company, and they had to compete for my business, I Picked the lowest priced one.

When I went to set up internet, I found I only had one choice for cable internet.

One.

This is how it was where I moved from too. And this is how it is all across the United States. Meanwhile, Prices keep going up, while quality goes down. Meanwhile, every major internet carrier in america would have the average american citizen believe the internet is some scarce resource that can run out. It's electricity. It's not going to run out.

What you are advocating against is already happening. In your second paragraph you claimed there are countless reasons why net neutrality is bad but you didn't name a single one.

I don't like the idea of the government of all things controlling the friggin internet, but the current way things are heading, what choice do we have? The internet is too important for us to just stop using it randomly one day in order to try and make a point to our local providers. It's a gray area, it's not quite water, and it's not quite a hamburger from your local fast food joint.

the REAL reason "anybody" opposes net neutrality is because companies like Netflix are giving consumers what they want, when they want it. Media entertainment on demand, and so why would I continue watching "TV" when I can just load up netlfix and watch the movie or Tv show I want to watch right now.

I haven't watched TV in years for this very reason and THATS why Net Neutrality is even a big deal, because cable companies are getting upset and nervous because they can't keep up with services like Hulu and Netflix. So they pay people to speak out against net neutrality so they can have their way, and make it nearly impossible for services like netflix to function or to charge them basically the revenue that they lost when people chose with their dollars to watch netflix instead. How the hell is that a free and open market?

RoadKing2009's picture
RoadKing2009
09/15/2014

NO ! Enough Government !

Hk40cal's picture
jeff koch
09/15/2014

Soviet style Communist control... any way you mold, shape, word-savant it...it's all about control..

uvbogden's picture
uvbogden
09/14/2014

When Obamacare was passed, it was claimed that it would foster competition, bring down costs and improve quality. Now we see that Obamacare, the most massive piece of regulation ever devised by government, eliminates competition, pushes up costs, and reduces quality.

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