The Open Internet: A Customer-Centric Framework

Gerald R. Faulhaber, David J. Farber


The Federal Communications Commission’s Notice of Proposed Rulemaking, “Preserving the Open Internet,” is the most significant reach of regulatory power over the Internet in U.S. history. The NPRM proposes a set of regulations for broadband ISPs corresponding to the four principles previously adopted by the Commission, plus two new ones: nondiscrimination and transparency. We strongly support customer-focused transparency by all Internet firms, not just broadband ISPs. We oppose, however, the remaining five proposals to implement network neutrality for broadband ISPs as both unnecessary and harmful. We find that there is nothing here to be fixed, and that there is no market failure. The regulations are not only unnecessary; they would impose significant costs on broadband customers. We find that the costs that would be imposed on wireless broadband would be particularly punishing, and likely to permanently harm that industry.

We instead propose that the FCC focus its energies on bringing more competition to the already rivalrous broadband marketplace, a goal which is within reach. Over a dozen wireless carriers now provide 3G service, and 4G service, which can substitute even more effectively for many Internet uses that were previously confined to wireline, is imminent. It is essential that the FCC release substantial amounts of licensed spectrum into the marketplace so that this additional competition can emerge quickly. The FCC should not waste its time with pointless, costly regulation; it should facilitate competition so that customers can choose for themselves if and how much network neutrality they want. Let the customers decide; not regulators, not pundits, not advocates.

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