Saturday, March 23, 2024

Core issue before FCC's proposed Title II rules: regulating advanced telecom as a common carrier utility

Conventional economic theory distinguishes a public utility from a supplier of goods and services in a market by identifying whether the good in question is a monopoly. In many parts of urban and rural California, internet services are indeed a monopoly—or at best a duopoly.

The common policy response to the monopoly is to either place the service provider into public hands or use a regulatory framework to curtail the ability of the provider to exploit a monopoly position. Once in the public hands, the service provider can be compelled to prioritize social outcomes, such as equity of access, affordability, or similar—exactly from which our California communities stand to benefit since many currently lack equitable access to affordable, reliable broadband internet.

While the context here is California, this is the core issue before the U.S. Federal Communications Commission with its proposed Safeguarding and Securing the Open Internet rulemaking that would reclassify IP telecom as a common carrier utility under Title II of the Communications Act.

It's controversial because some policymakers paradoxically regard this service as a competitive market of price tiered "broadband" bandwidth, in diametrical opposition to the public utility framework described above that does not. Hence, their rationale is the interests of market makers and those who invest in it should take priority over the broader public interest. It's a black and white debate that over the past three decades has favored the former over the latter, making the investors winners and the public losers. 

The fundamental challenge for public policymakers is to alter this win/lose dynamic and develop a scheme where all interests can win. It's politically possible given access to advanced telecommunications is a nonpartisan issue widely seen as broadly beneficial for all aspects of society.

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