Who Benefits from Title II Internet?

By James Erwin

            I am not a lawyer and have never been to law school, but most recovering law students I know tell me one of the most important questions to ask in each case is sui generis – Latin for “who benefits?”

            Today, the Federal Communications Commission (FCC) will vote on restoring the Obama-era classification of broadband as a Title II public utility (rather than its current status as an information service), dubiously known as “net neutrality.” The FCC will grant themselves sweeping new (or rather, old) powers to regulate internet service, including by setting prices and regulating traffic. With the broadband industry hostile this degree of regulation and such a major question of administrative power and public policy at stake, we should ask, who benefits from Title II?

            As we documented in an earlier post, the answer is essentially no one – since the Trump FCC reversed the Obama rules with the Restoring Internet Freedom (RIF) Order, the median speed for broadband service is up and prices across the country are down. While Title II was in effect over broadband, the rate of improvement in speeds was much more sluggish. Americans for Tax Reform President Grover Norquist made this very case yesterday in the pages of the Washington Times. Investment, too, slowed under Title II and accelerated under RIF, as evinced by American networks’ superior performance compared to their European counterparts during the COVID-19 pandemic. As far as the consumer is concerned, Title II reclassification seems to be a solution in search of a problem.

            And that is only if one accepts the premise that Title II classification will do anything to improve internet service. As mentioned above, it may well have discouraged investment and innovation, as both saw a marked improvements after repeal. Indeed, FCC Chairwoman Jessica Rosenworcel did not even claim in her announcement that this policy would do much to improve consumer access. Rather, she couched her justification in terms of consumer protection instead of economic development:

…almost half of us lack high-speed service with 100 megabit-per-second download speeds or can only get it from a single provider. In fact, only one-fifth of the country has more than two choices at this speed. So if your broadband provider mucks up your traffic, messing around with your ability to go where you want and do what you want online, you can’t just pick up and choose another provider. That provider may be the only game in town. You need a referee on the field looking out for the public interest—and ensuring your access is fast, open, and fair.

            Again, this only makes sense if one accepts the premise that Title II classification will do anything to improve the situation. Since we already know that investment was chilled by Title II, the likelihood that restoring it will lead to more competitors in the marketplace and greater consumer choice is low. Title II is more likely to turn broadband into a permanent natural monopoly like electricity and water where only one provider exists. It seems the FCC itself stands to benefit from this increased regulatory power more than the consumer.

            Furthermore, as Scott Wallsten of the Technology Policy Institute has pointed out, Rosenworcel’s statement obfuscates the actual degree of competition in the marketplace. While it is true that only one-fifth of the country has more than two choices at this download speed (100 Mbps), 55% of Americans have at least two choices for 100 Mbps broadband, and more than 90% of Americans have at least two choices for 25 Mbps, which is the actual legal minimum for broadband. Additionally, 5G and LEO satellite internet continue to expand and compete with traditional wireline internet, so competition stands to increase for the foreseeable future. Once again, the consumer is not the beneficiary of Title II classification. Once again, we ask: who (besides the FCC) benefits?

            Perhaps we should look at who is pushing this from outside the agency. When the Obama FCC first pursued this policy in 2015, talk of “net neutrality” was everywhere. The Open Internet Order was preceded by a pressure campaign from left-wing activists, the White House, and late-night hosts. This effort was supported by powerful foundations, corporations, and individuals funding net neutrality and the coordination of political entities, activists, academics, and the press to create the appearance of a grassroots movement in both the US and EU. Much of the funding came from major tech platforms who saw a competitive advantage in regulating ISPs.

            This time around, all those groups have been silent save the left-wing activists. While President Biden signed an executive order at the beginning of his term directing the FCC to pursue this rulemaking, he has not cut a video promoting it like President Obama. John Oliver has done no follow-up segment. Title II’s supporters have been strangely quiet as Roseworcel has squirmed from consumer protection to national security to public safety as the excuse for expanding her own power with almost no back-up.

            The last resort, then, is to follow the money. Who is funding the groups calling for this regulation? And how do they benefit? The only major groups I could find who have said anything at all in support of restoring Title II are Public Knowledge, Demand Progress, Free Press, and the American Library Association. According to Influence Watch, the first is funded in part by the left-wing Ford Foundation and used to be run by avowed socialist Gigi Sohn. Demand Progress is funded by Sixteen Thirty Fund, a major left-wing dark money group. Free Press was also founded by an avowed socialist, Robert McChesney. The Library Association is as it sounds, an association of school libraries across the country, but have recently been fighting to keep pornographic materials in school libraries over the objections of parents. They have firmly associated themselves with the broader critical theory movement pushing revolutionary Marxism on children in schools.

            It appears we have our answer as to who benefits: a small coterie of avowed socialists, Marxist agitators, and bureaucrats support Title II as a means of expand the state’s power at the expense of the consumer. They have successfully pressured the FCC to reimpose these old, discredited rules to do so. Given that there is no financial interest, major politician, or TV host running a campaign or calling attention to this issue, it is impressive that the FCC would bend so easily to their will. Impressive though it may be, Title II is an elite-driven effort being rammed down on consumers despite not even being consensus within the Democratic Party anymore. All the more reason for commissioners to vote no today on reimposing Title II.