As millions flocked to the web for the first time in the 1990s, President Clinton and a Republican Congress decided “to preserve the vibrant and competitive free market that presently exists for the Internet.” In the Telecommunications Act of 1996, the government called for an internet “unfettered by Federal or State regulation.” The result of that fateful decision was the greatest free-market success story in history.

Encouraged by light-touch regulation, private companies invested over $1.5 trillion in nearly two decades...