The Perpetual War Over Net Neutrality

The net neutrality battle rages on. This past week Ajit Pai, chairman of the FCC, dismantled laws the Barack Obama government put in place in 2015 compelling internet service providers to handle all internet traffic the equally. Advocates are elated, and disputants are tearing their garments: Probably, then, the decision is of vast importance.

Truly, it's hard to say what difference the change will cause, if any. The one thing that can be said with certainty is that this is a dull way to make policy.

On the face of it, a change that increases the scope for competition among ISPs is a great thing. Under the Pai administration, for instance, they'll be allowed to charge content suppliers a premium for access to "fast lanes." They'll also be permitted to create "slow lanes" that cost less. Because customers differ in their inclinations and readiness to pay, that kind of variety is capable of driving innovation and adding value.

The difficulty is that the market for ISPs is not prominently competitive -- and the new choices could make it less so if bigger firms use it to put rivals at a disadvantage.

Repealing the Obama administration's net neutrality guidelines doesn't scrap all applicable regulation: The Federal Trade Commission will still be charged with controlling anti-competitive behavior. And consumers may well push back against the kind of internet segmentation that net neutrality advocates fear, causing ISPs to carry on much as before. Whether the change proves to be good or bad for customers overall is an open question.

What values more is that the rules are being changed two years after they were put in place. Effective regulatory regimes need to be constant. Remember, this is an infrastructure industry. Outlays are heavy, and business decisions have to look forward over a span of years and even decades. There were lawsuits when the Obama administration acted; there are lawsuits again. A regulatory system in a continuous state of upheaval is a heavy tax on investment and innovation.

It would be far better to pass a law capable of requiring bipartisan support and settle the issue for the foreseeable future. A practical compromise would bar ISPs from throttling particular apps or services, and permit fast lanes that could be shown to help consumers.

Right now, to recommend this simple, common-sense approach to Congress seems like asking for the moon. Count the incompetent net neutrality war as one more cost of Washington's dysfunctional politics.