Netflix and Amazon have been nominated for hundreds of Emmys and Golden Globe awards in recent years, and that is a testament to both the quality of those companies and the transformation of television. But some of the credit is also due to “net neutrality,” the legal regime that nurtured and protected the open internet and streaming TV in the first place.
Streaming, after all, is a cheaper and better form of television. For that reason, it is something the cable industry would not have allowed to thrive had it been left to its own devices. Fortunately, net neutrality rules prevented cable companies from killing or interfering with streaming television during its infancy.
You might think it unwise, therefore, to question a policy that has yielded both lower prices and good television. But President Trump’s chairman of the Federal Communications Commission, Ajit Pai, on Wednesday announced plans to eliminate net neutrality (technically, make it “voluntary”) despite its popularity, record of success and acceptance by most of the industry.
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President Trump ran as an economic populist, but the announcement of Mr. Pai’s plan could reveal what a true populist backlash looks like. Just a few years ago, more than four million people wrote to the F.C.C. to demand stronger controls on the cable industry, while those who took cable’s side would have fit in the commission’s lobby.
The proposal to kill net neutrality is terrible economic policy and bad politics. It is starkly inconsistent with any populist mandate. There is a reason that net neutrality is called the third rail of internet politics, and Mr. Pai has now grabbed it.
Invoking Internet Freedom to Kill It
If the commission, which has a 2-to-1 Republican majority, approves Mr. Pai’s proposal, there will be little stopping the broadband industry from squelching competition, limiting consumer choice and raising prices. The previous F.C.C. chairman, Tom Wheeler, helped put the rules Mr. Pai is attacking in place in 2015, and the United States Court of Appeals for the District of Columbia Circuit upheld them last year.
Mr. Pai argues that existing regulations are hurting the internet. He said that the 12 largest internet service providers reduced investment by 5.6 percent between 2014 and 2016 because the net neutrality rules were too onerous. But he is cherry-picking data to make his case. Free Press, a public-interest group that supports net neutrality, found that total investment by publicly traded broadband companies increased 5.3 percent between 2013-14 and 2015-16.
Large telecommunications companies have been raking in profits in recent years. And they have been making multibillion-dollar acquisitions — not something you see from an industry that is withering from senseless regulations. Charter spent more than $65 billion last year to buy Time Warner Cable and Bright House Networks. AT&T bought DirecTV for $48.5 billion in 2015 and is trying to buy Time Warner, the media company, for $85 billion.
Not only is Mr. Pai’s lament for the broadband industry based on alternative facts, it misses the bigger point. Net neutrality is meant to benefit the internet and the economy broadly, not just the broadband industry. That means the commission ought to consider the impact the regulations have on consumers and businesses. In particular, the commission has a responsibility to protect people with few or no choices; most Americans have access to just one or two companies for residential service and just four big operators for wireless.
