All eyes are on the FCC where a decision will be made on whether to regulate internet service providers or not. If the FCC does decide to regulate Comcast and Verizon provide internet service, it will most likely be by reclassifying ISPs as telecommunication services under Title II, which has many pros and cons from a regulatory perspective. The biggest pro is that under Title II, the FCC can hold ISPs accountable for limiting communication over the internet, such as charging Netflix more to reach your computer. In theory, this would give the FCC power to enforce basic net neutrality.
Now, assuming the FCC passes the Title II reclassification and the reclassification withstands the certain court appeals, the United States will still be far away from a fair and optimized internet. Net neutrality itself is a symptom of the lack of competition in U.S. broadband markets. Even Comcast and Time Warner Cable admit, in their arguments for allowing the conglomerates to merge, they don’t compete with each other.
In most U.S. cities, consumers only have one choice for broadband provider. A lucky few have two choices at most. Rural areas have no choices and must rely on slower DSL, depressing productivity and economic development. Even for those with broadband options, they pay more for slower speeds in the U.S. than in almost every other advanced country. In Seoul, consumers can purchase 1 gigabit/sec connections for $30/month compared to $300 in the U.S. for half the speed.
For those that argue there isn’t a competition problem with U.S. broadband, compare the speeds and costs of broadband in cities with municipal ISP services. ISP lobbyists have trolled states, passing laws to ban municipal broadband, claiming that this increase in competition is bad for the cities because…reasons. In Chattanooga,Tenn., the municipal broadband cut user costs from $300/month to $70 and is well on track to pay back its bond financing. Cities are lobbying the FCC to also void the ban on municipal broadband in 20 states, which would allow cities to do what companies won’t – invest in better service. House Republicans are already proposing laws to block the FCC from voiding these anti-competitive laws.
Net neutrality is only needed because we lack broadband competition. In an ideal market, if one company was blocking Netflix, you could switch to another for better service. But instead, we have no choice and face an industry that prefers lobbying to investing.