The Internet Is Free Again
Killing Obama-era rules will remove the FCC as political gatekeeper.WSJ editorial board
Dec. 14, 2017 7:23 p.m. ET
328 COMMENTS
Disney’s deal announced Thursday to buy some premium 21st
Century Fox properties for $52.4 billion underscores how technology is
remaking the media landscape. This discomfits some, but the Federal
Communications Commission is right to let markets steer competition and
innovation.
The FCC on Thursday voted 3-2 to approve chairman
Ajit Pai’s
plan to repeal “net neutrality” rules backed by the Obama
Administration that reclassified internet-service providers as common
carriers under Title II of the Communications Act of 1934. Title II
prohibits “any unjust or unreasonable discrimination in charges,
practices, classifications, regulations, facilities, or services.”
By effectively deeming the internet a utility, former chairman
Tom Wheeler
turned the FCC into a political gatekeeper. The rules prohibited
broadband providers from blocking, throttling and favoring content,
which Mr. Wheeler ostensibly intended to help large content providers
like Google and Netflix gain leverage against cable companies.
But
as always in politics, treatment under the rules would depend on
ideology and partisanship. Even as liberals howl that the Justice
Department’s lawsuit to block AT&T’s merger with Time Warner is
motivated by President Trump’s animus to CNN, they want FCC control over
the internet. The left’s outcry at Mr. Pai “killing” internet freedom
has been so overwrought that the FCC meeting room had to be cleared
Thursday for a security threat.
Bans on throttling content may
poll well, but the regulations have created uncertainty about what the
FCC would or wouldn’t allow. This has throttled investment. Price
discrimination and paid prioritization are used by many businesses.
Netflix charges higher prices to subscribers who stream content on
multiple devices. Has this made the internet less free?
Mr. Pai’s
rules would require that broadband providers disclose discriminatory
practices. Thus cable companies would have to be transparent if they
throttle content when users reach a data cap or if they speed up live
sports programming. Consumers can choose broadband providers and plans
accordingly. The Federal Trade Commission will have authority to police
predatory and monopolistic practices, as it had prior to Mr. Wheeler’s
power grab.
*** Mr. Pai’s net-neutrality rollback will
also support growth in content. Both content producers and consumers
will benefit from increased investment in faster wireless and fiber
technology. Apple is pouring $1 billion into original content to compete
with Amazon, Netflix and YouTube.
Disney is buying the 21st
Century Fox assets to compete with Netflix and other streaming services,
build leverage with cable companies and establish a global footprint.
Netflix has more than 47 million international subscribers and streams
in nearly every country. Fox (which shares the Murdoch family’s
ownership with our parent company, News Corp.) will keep its news and
main sports channels, which can offer “live” content to consumers. The
antitrust concerns should be negligible.
Consumers will also
benefit from the slow breakdown of the cable monopoly as they customize
“bundles” like Hulu or a Disney stream that may cost less. Americans
will also enjoy new distribution options, which could have been barred
by the net-neutrality rules.
This week T-Mobile announced its
acquisition of Layer3 TV, a Denver startup that streams high-definition
channels online and will compete with AT&T’s DirecTV Now. Verizon
Wireless last month said it will start delivering high-speed broadband
to homes over its wireless network late next year. Google and AT&T
are experimenting with similar services that will be cheaper than
digging dirt to lay cable. This could be a boon for rural America.
By
the way, Google has vigorously promoted net neutrality in theory but
less in practice. While Google says it remains “committed to the net
neutrality policies,” the search engine uses opaque algorithms to
prioritize and discriminate against content, sometimes in ways that
undercut competitors. Net neutrality for thee, but not me. Google ought
to be transparent about its practices.
Technology and markets
change faster than the speed of regulation, which Ajit Pai’s FCC has
recognized by taking a neutral position and restoring the promise of
internet freedom.
Appeared in the December 15, 2017, print edition.