While taking a victory lap over the passage of his signature infrastructure bill, President Biden specifically touted the $42 billion the law designated to “make Internet access universal” by 2030. Putting aside skepticism that this “stimulus package” will allocate resources more efficiently than the Obama-era one (which also included funding for broadband, and the likes of Solyndra), if Biden was earnestly committed to improving infrastructure, he would not have enabled the recent FCC order to reinstate net neutrality.
The FCC’s net neutrality rule will diminish investment by regulating the Internet as a “public utility” (akin to water and electricity.) Unelected bureaucrats are now enforcing price controls by policing what Internet Service Providers (ISPs) can charge their customers, and what services can be offered. Taken together with the FCC’s “digital discrimination” actions, the government now exerts unprecedented control over Internet providers’ ability to customize their own pricing plans and service models.
With the government now setting its preferred pricing structure rather than allowing markets to work, ISPs have less incentive to expand and improve their networks. It is no surprise that when Net Neutrality was repealed in 2017, investment in broadband rose significantly, while Internet speeds improved and prices in real terms fell. Despite disingenuous alarmists claiming the repeal of net neutrality would “end the Internet as we know it,” the fact is, the Internet got better.
The Trump FCC’s free-market approach was brilliantly vindicated during the pandemic when networks faced the unique challenge of accommodating a sudden surge in online activity across America. Unlike our European counterparts, America’s networks remained resilient.
Now facing an entire government price control regime, ISPs have reduced incentives to make the continuous upgrades, improvements, and deployments of new equipment that make our broadband access the envy of the world. This “infrastructure spending” the administration seems unfazed by diminishing. Much like other progressive schemes that rely on a steady stream of taxpayer bailouts to stay afloat, the government may now find itself wasting endless resources to counteract a drop in broadband investment – and assert new Internet taxation authority to pay for it. That is why the order must be repealed whether through the courts or overturned by its own agency yet again.
One last note, consider it a red flag when politicians promise to make any good or service “universal.” As evidenced by cheaper airfare, the prevalence of flat-screen high-definition televisions, and the fact most of us are walking around with supercomputers in our pockets — the free market turns scarcity into abundance like nothing else. Government simply cannot compete. It was through embracing this understanding that America’s economy became the envy of the world.
If the Biden Administration wants to improve infrastructure — and provide consumers with the best possible goods and services at the lowest possible prices — the best way to achieve that is by getting out of the way.
Republished from RealClear Markets
