"Thickets of Red Tape"

Last week’s FCC decision to classify broadband as a utility service under Title II of the [1934] Communications Act will not improve broadband speeds or lower their prices.  If the FCC wants to encourage competition in broadband to improve consumer welfare, regulation was not the way to go about it.

Nothing will change, for now.

1) Broadband providers who have been complying with net neutrality principles, like Comcast, will continue to do so.

2) New regulatory oversight and its associated compliance costs and possible fees will not encourage entry.  For sure, the number of competitors per market (1 in very remote areas to maybe 3 or 4 in urban areas) will certainly not increase.

3) There is a reason why there are so few broadband competitors in rural markets – the cost of building and operating a network.  Regulation certainly doesn’t lower those costs.

Down the road, things could change if

1)  the FCC backs away from its promise and begins to regulates broadband rates, and/or

2)  utility-type fees are added to broadband bills.

Then, what?