2015 State of Telecommunication Regulation in the United States: The Empire Strikes Back

2015 State of Telecommunication Regulation in the United States: The Empire Strikes Back

The iconic science fiction movies of all time are arguably the first three Star Wars films. The storyline, which runs throughout, is classic Count of Monte Cristo, where a person of low degree rises to accomplish great things. The key to such a story is, of course, where the hero is brought low (Freytag’s rising action); where all seems lost and only extraordinary efforts will save the day.1 In the climax, the hero prevails and peace reigns in the galaxy. Currently, telecommunication regulation in the United States is approaching a climax, but has currently entered a period of rising action, where the signs are dire. In fact, we are at the second film where the empire strikes back, and things are looking somewhat dire for the hero of the drama.

2015 marks the first ever foray into the digital telecommunication market by federal regulators. Although excluded from direct regulation in the Telecommunications Act of 1996, data-enabled services have been on the regulatory radar screen for some time. As the Internet became increasingly important to the consumer space, the FCC has explored issues that might rise to the level of requiring regulatory intervention. After several abortive attempts to impose regulation on the carriage of content over data networks, and being rebuffed in the courts, the FCC finally declared that broadband access was a Title II telecommunication service, subject to regulatory oversight.

The so-called “net neutrality” rules that were adopted as a result of the FCC’s declarations have been hotly contested, and were enacted along strict party lines by the Commission. Dissenting views pointed out that attempting to treat broadband access like telephone service would almost certainly lead to negative outcomes; at the very least, distorting the market for telecommunication services, but potentially radically reducing investment and innovation in the market.

About this report

In this paper, we will examine the latest net neutrality ruling; in particular, its focus on non-discrimination. We will, then, look at the record to determine how the impact of this notion has played out so far, and how it will likely evolve over time. Since the impact of net neutrality is much more extensive than simply influencing broadband access providers, this paper will be of interest to the wider communication service provider industry and the technology firms that provide them infrastructure solutions.

  • Executive Summary
  • Introduction2
  • Reading the Regulations
  • Economic Impact of Net Neutrality: a Look Back and a Look Forward
    • Table Subscriber Growth
    • Table United States Broadband Subscriber Growth (2011 projection versus 2015 actuals)
  • Implications of Federal Regulation on the Internet
  • Impact on Operators and Service Providers
  • The Last Word

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