Time to give up the net-neutrality quest

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Article Highlights

  • Unfettered Internet has unleashed innovation and growth for the past 20 years

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  • The net-neutrality debate rages on, even though we know which policy works best: the one we have now

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  • Unfettered Internet has unleashed innovation and growth for the past 20 years.

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When the D.C. circuit court struck down the Federal Communications Commission's quixotic "net neutrality" rules on Jan. 14, the court left the agency with a way forward despite two straight court losses. The court ruled that one way the agency could regulate the Internet would be to simply reclassify it as a "common carrier," no different from 19th-century telephone networks.

FCC Chairman Tom Wheeler said in a statement that he is considering "all available options." The best option is to just drop this ill-conceived crusade. As the U.S. phases out landline telephone service for more vibrant, 21st-century alternatives, the commission shouldn't slap obsolete regulations built for the old system onto the new one. That's exactly what net neutrality—which essentially means that Internet service providers cannot customize services based on consumer needs and then price accordingly—seeks to do.

Since the Clinton administration, a broad bipartisan consensus has allowed the Internet to remain largely unregulated. Title I of the Telecommunications Act of 1996 was created for this purpose. Telephone providers, on the other hand, have been regulated more closely under Title II of the law. So why is the FCC challenging the consensus by attempting to impose net neutrality? To preserve the status quo. The FCC's regulatory approach is best understood as nervous bureaucrats resistant to a technological revolution that has changed how consumers use the Internet.

Once a research toy for elite computer scientists, the Internet has been transformed by 20 years of use by ordinary citizens into a diverse venue for entertainment and interpersonal communication. The dynamism at the heart of the Web is stronger than ever, but appearances have changed. People now reach the Internet primarily through fast wireless networks and the Web is giving way to mobile apps. The days of AOL dial-up are long gone for nearly all Americans.

Still, some inside and outside government are nervous that consumers are being exploited. Their story is that Americans are paying too much for too-slow connections to the Web—and so the government needs to ride to the rescue, either by nationalizing Internet Service Provider networks or commodifying them by disallowing customized services. But this won't reduce prices or increase quality. Internet service in densely populated foreign cities is often available at a lower price than in the United States. Yet even in places with taxpayer-funded advanced networks like Hong Kong and Stockholm, promotional pricing is necessary to attract users.

Moreover, people still change their preferences: young Koreans now cut the cord on superfast wired networks in favor of much slower—but more mobile—wireless plans.

Even with this country's vast landmass, America's broadband networks are improving faster than most. Akamai Technologies's  State of the Internet reports show progress in the use of higher-speed broadband networks in the U.S. compared with other nations. The U.S. now ranks seventh in the world in higher-speed broadband network usage, up from 28th in 2008. The U.S. has almost as many high-speed users as the top six countries combined, but spread across 15 times the land area of those countries.

Regulation threatens to upend this success, as two nationwide experiments with government regulation show. Between 2002 and 2005, broadband service over DSL telephone company networks was regulated under Title II of the 1996 law—what net-neutrality fans want for broadband now—and the companies failed to keep pace with the less-regulated Title I alternative from cable companies. Moving DSL to Title I in 2005 led to an influx of capital in the telephone sector, which now offers the broadband services with the highest customer-satisfaction ratings.

Then the FCC tried again with the net-neutrality "Open Internet" rules in 2010, which regulated wired networks more heavily than mobile networks. Mobile networks took off—America's mobile networks now lead the world in deploying and using the fastest wireless standard, 4G/LTE—while wired networks lagged behind.

But no matter. The net-neutrality debate rages on, even though we know which policy works best: the one we have now. Unfettered Internet has unleashed innovation and growth for the past 20 years. The FCC should put the future of communications ahead of agency pride.

Mr. Bennett is a visiting fellow at the American Enterprise Institute and a contributor to the technical standards governing Ethernet, Wi-Fi and the Internet. 

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