Opinion

Don't make the Internet a public utility

The Federal Communications Commission will vote Thursday on a path forward in regard to the "open Internet."

While the proposed rules have not yet been made public, FCC Chairman Tom Wheeler would be wise to maintain the regulatory approach that has served our country so well.

The bipartisan regulatory framework put in place 18 years ago has brought forth unparalleled investment, jobs, innovation and competition. We can credit this light regulatory approach for the fact that 98 percent of American consumers have wired and wireless high-speed broadband access.

Why would anyone advocate a sudden change of course?

In the wake of Wheeler's announcement to readdress net neutrality and establish new rules of the road for Internet service providers, some interest groups have called for the Internet to be regulated as a public utility. They want to reclassify Internet providers as monopoly-era telecommunications carriers.

That would be a mistake.

These regulations trace back to 19th century railroad rules and have traditionally been applied only to telecommunications services that have nothing to do with today's Internet.

If one looks at other areas of essential infrastructure, public utility regulation has clearly hindered progress, or, worse, led to severe underinvestment.

-- A third of American roads are in poor condition, needing a total of $170 billion in capital investment, according to the Federal Highway Administration.

-- Our electric grid has experienced increasing blackouts per year - 307 in 2011 - and needs $768 billion by 2020 to avoid failure.

-- Water main breaks occur 240,000 times a year, and the systems now need $1 trillion in investment.

Regulating the Internet as a public utility would ensure that it would suffer from this same chronic underinvestment.

Threats of Internet reclassification in 2010 had a chilling investment effect. Market capitalization was immediately erased by approximately 10 percent, or $18 billion, for some Internet providers over investor worries about burdensome regulation. A J.P. Morgan analyst wrote then that investors were "extremely nervous about what's coming" out of this proceeding, and added, "Broadband is a very competitive place so there's no point in fixing it."

America's broadband providers have invested $1.2 trillion since 1996 to develop our infrastructure. Today, 85 percent of American households have access to networks capable of 100 megabits per second or higher, and speeds continue to grow.

Akamai Technologies Inc., an Internet content delivery network, found that between the fourth quarter of 2012 and the fourth quarter of 2013, the average broadband speed in the United States increased by 25 percent; in the past decade, Internet speeds have increased 1,500 percent.

America's Internet infrastructure has led to remarkable job creation. Today, broadband and related information technology businesses directly support nearly 11 million jobs in the United States. The Internet has given rise to today's app economy, which now employs more than 750,000 Americans - up from zero in 2007.

New startups - and leading content providers such as Facebook, Google, Amazon and Yahoo - thrive on America's fast and open Internet to innovate, compete and offer new services at a rapid pace.

To be sure, the FCC has important tasks ahead: increasing Internet adoption, ensuring that more people understand the Internet's relevance in our daily lives and strengthening digital literacy. But the moment the FCC steps out of this mission and expands into public utility regulation, millions of Americans will no longer enjoy a world-class Internet.