Sometimes, Occasionally, Regulation is OK

As frequent readers of Socially Awkward know, I often rail against regulation. Usually lawyer speech regulation, but there are parallels across the regulatory board.  It’s not that regulation is inherently evil; it’s just that so much regulation is ineffective and counterproductive.

So I’ll admit to having some mixed feelings when President Obama came down hard in favor of regulating the internet as a utility under the FCC’s Title II authority, in order to preserve net neutrality.  I mean, when the regulator-in-chief calls strongly for more regulation, it usually helps to check your wallet.

But here’s the thing: this is one of those instances where regulation is necessary.  I’d go into more detail on why (and having spent virtually my entire professional career working in telecom and internet companies, I have some perspective on the issue from both sides), but Mike Masnick at Techdirt wrote a fantastic post a few months back that really gets to the heart of it.

You should read the whole thing, but the short story is that access to the internet is a natural monopoly – there are only a handful of companies that can provide the infrastructure for the internet.  And natural monopolies are as much the enemy of innovation and consumer choice as overbearing government regulation can be (as any customer of Comcast can tell you!).

As those who have worked in telecom know, this infrastructure level, where connections are made, sites built, etc. has always been heavily regulated.  It needs to be, because the companies involved are often the only game in town, and overall, it’s worked.  Trouble arises when the regulation gets into rates, terms of service or preservation of regulated monopolies. And that’s precisely the sort of regulation that Obama is calling for the FCC to forbear from (i.e., not do) as part of reclassifying the internet as a Title II utility.

So – regulation of internet infrastructure, including guaranteeing there are none of the toll roads or fast lanes envisioned by the ISPs.  But non-regulation of consumer experience and services that ride over the internet, enabling the fantastic innovation that the internet has engendered to continue to thrive.

In the months to come, critics from many corners will characterize this as “regulating the internet.”  It’s a dog whistle message to many, because it would be bad indeed if the government tried to regulate content and services that flow over the internet.  But this is only regulation of the internet’s plumbing. And it’s necessary – as regulation sometimes is – to keep the handful of natural monopolists who control those pipes from slowing down the pace of online innovation and expression.

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