While the FCC is considering a vote on “Restoring Net Neutrality,” it should be mindful of the widely (though not universally) understood reality that the rate of innovation in telecommunications and technology far outpaces its regulatory regime that is ever struggling to keep up. A recent publication by Free State Foundation scholar Randolph May and his colleague Andrew Long underscores this reality by examining the conflict between the groundbreaking innovations of 5G wireless technologies and the anachronistic Net Neutrality regulations that the FCC seems determined to bring back into service. 

Net Neutrality as a regulatory concept was first articulated in 2003 and stood for the proposition that internet service providers (ISPs) with market power should not be able to abuse their gatekeeper advantage to discriminate against the content that flowed across their networks. Think of the local cable company or incumbent ISP prioritizing its own affiliated news programming over unaffiliated news programming like CNN or the BBC. As a regulatory matter, this translated into prohibiting ISPs from blocking or throttling unaffiliated content or charging fees for “paid prioritization”—that is, no one should be allowed to pay for faster or advantaged access to the end user. Sounds reasonable.

However, in the 20 years since Net Neutrality was first conceived, innovations and investments across the entire telecommunications ecosystem have completely eliminated the gatekeeper power that the entire concept of Net Neutrality was predicated upon. In 2003, most consumers had a choice of at most two ISPs—none of which provided anything like the speeds or services available today. In 2024, consumers can choose between incumbent cable and fiber providers as well as three nationwide wireless broadband providers offering 4G and 5G services with speeds and capabilities unimaginable in 2003. This level of competition and consumer choice means that no ISP has the market power necessary to engage in the supposed market abuses once imagined as the basis for Net Neutrality. Nevertheless, the FCC is determined to resurrect this Net Neutrality regime without a meaningful acknowledgement of the change in technology and competitive landscape that has occurred since the regulations were repealed in 2017, much less since the concept was first introduced in 2003.

Which brings us to the compelling insights of May and Long. In their recent publication, they bring this conflict of technology and regulation into stark relief in the context of one of the most compelling innovations of 5G wireless: “network slicing.” In the seven years since the last iteration of Net Neutrality rules was repealed, the wireless industry has been investing hundreds of billions of dollars into developing and deploying 5G technologies across the country. Unlike previous new generations of wireless standards (2G to 3G to 4G), which primarily provided increased download speeds, 5G introduces an entire range of new capabilities including reliability, security, and latency that enable not just improved consumer performance, but entirely new industrial and enterprise services. Take latency as one example. 5G networks can ensure that the time gap between when a transmission is sent and when it is received is as little as 1/100th of a second. For a consumer, this is completely immaterial in downloading video or social media content, or even engaging in a video conference. But for a doctor performing remote telemedicine, or a construction engineer remotely controlling heavy machinery, this difference in latency could literally be the difference between life and death.

As May and Long point out, this capability is a product of network slicing management tools uniquely enabled by 5G. What this means is that wireless carriers now have the ability to dedicate a portion of their network capacity to the exclusive use of highly sensitive and critical communications, ensuring that enterprise services like Internet of Things, telemedicine, or autonomous vehicles maintain the level of reliability and latency they require to fulfill their operations.  In order to offer this superior tier of service, carriers must create a tiered schedule of fees. But this is what Net Neutrality advocates view as potentially prohibited “paid prioritization.” According to May and Long, imposing outdated regulatory concepts on our most cutting-edge technologies and services means “nascent network management capability might be prohibited outright by so-called open Internet rules or just as problematically, be shrouded in a fog of regulatory uncertainty so thick that it renders the use of network slicing an unjustifiable risk.”

As the FCC moves forward it could do worse than be guided not just by the observations of May and Long, but by the maxim of the physician’s Hippocratic oath: first do no harm. Unfortunately, the FCC seems compelled to introduce regulatory sclerosis into an otherwise vibrant, innovative, and competitive marketplace.

Read the whole article here.

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