No telephone or cable company will win a popularity contest. Though these firms install the wires, cables and antennas that bring the wonders of the Internet into the home, customers revile their “provider.” Once upon a time “the telephone company” — when there was only one — was the most admired public utility, but now some people think even the government could make things better.
The Federal Communications Commission on Thursday will vote on a proposal to have administration regulators step in to compel the Internet to be “more open.”
This goes by the name of “net neutrality,” but it’s actually a battle of billion-dollar companies trying to get a competitive advantage. “Content providers” such as Google, Facebook and Netflix face telecommunications companies such as AT&T, Comcast and Verizon that deliver that content to consumers.
Accounting for more than a third of all Internet traffic, Netflix is at the center of the dispute. So many customers are watching programs like “House of Cards” that Internet service providers are pushed beyond their ability and capacity to deliver the video streams.
Some Internet providers have declined to increase capacity to meet the rising demand, resulting in more Netflix viewers getting the dreaded screen message: “Buffering.” That’s what FCC Chairman Tom Wheeler wants to eliminate with net neutrality regulations, which would order Internet providers to deliver all content equally. For his rules to have teeth, he would put Internet providers in the “common carrier” regulatory category to enable the FCC to tell Internet service providers what they can and cannot do.
Punishing cable companies has populist appeal — “give ‘em what they deserve” — but it’s nevertheless a bad idea. The free market is capable of punishing companies that mistreat customers. Mr. Wheeler doesn’t have the authority now to do what he wants to do.
Congress has been clear since the 1990s that it doesn’t want the government meddling with the Internet. The hands-off approach is precisely what has allowed Internet entrepreneurs to turn simple websites into billion-dollar enterprises.
The U.S. Court of Appeals for the D.C. Circuit said so in January with its Verizon v. FCC ruling on the issue of net neutrality. “We think it obvious,” the judges said, “that the Commission would violate the Communications Act were it to regulate broadband providers as common carriers.”
If the commission approves Mr. Wheeler’s proposal to do what Congress and the courts say it can’t do, there will be yet another futile round of court hearings in which expensive lawyers will be the only winners.
In the wake of the D.C. Circuit ruling, Netflix made agreements with Internet providers such as Cablevision, under which Netflix furnishes its own equipment to relieve the strain and ensure that customers get stutter-free video. It has further agreed to pay intransigent companies, such as Comcast, to buy better service for its customers.
Netflix obviously would prefer that the government mandate free carriage of its product in the name of net neutrality. What business wouldn’t want that kind of “neutrality”? Customer service, or lack of it, and taxes and fees is what makes telephone and cable companies almost as popular as the latest virus from Africa. Many of these costs are imposed by the FCC.
There’s little incentive to provide good service because most of these companies are monopolies through cable-franchise agreements with local governments. Government regulation is what gave us the dilemma, and more red tape will only make it worse.