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Net neutrality: The sky didn’t fall without it

It’s important to point it out when deregulation does not bring about the dire consequences some expect. This is just what Ken Engelhart, a lawyer specializing in communications law, did this week regarding the FCC’s scrapping of network neutrality rules two years ago. As Engelhart points out, “the internet has not slowed down, as pro-regulation stalwarts insisted it would.” In fact, the average US internet download speed went from 73 Mbps in 2017 to 124 Mbps today.

He concludes that net neutrality rules are useless, “meant to defend against a threat that does not exist.” But he also uses the word “harmless,” since Canada imposed net neutrality right around the time the US got rid of it, but the two countries basically have the same internet today, with the same speeds.

Although he does walk this back a little by bringing up unintended consequences, one important effect Engelhart does not mention is the impact on investment. As noted in the 2018 MEI paper on The State of Competition in Canada’s Telecommunications Industry, net neutrality rules in the United States created regulatory uncertainty and reduced incentives to invest. Broadband network investment fell 5.6% in two years (2015 and 2016) following the FCC’s net-neutrality decision—the first such decline outside of a recessionary period.

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