New Net Neutrality Rules Won’t Harm Telecom Giants In The Slightest

Broadband

from the cry-more dept

The FCC is expected to vote to restore net neutrality rules on April 25. And while there’re early indications that the rules may be slightly weaker than those stripped away by the Trump administration — and absolutely no indication the rules could meaningfully impact telecom revenues — telecom giants have already begun their whining about “burdensome regulation” in earnest.

Revolving door poster child Michael Powell, who once led the FCC but now lobbies for the cable industry, was quick to once again insist that the basic net neutrality rules would result in a parade of horribles:

Powell, the CEO of cable lobby group NCTA-The Internet & Television Association, was the FCC chairman under President George W. Bush. Powell said the FCC must “reverse course to avoid years of litigation and uncertainty” in a reference to the inevitable lawsuits that industry groups will file against the agency.

The NCTA said in another statement that the FCC “is pushing unnecessary regulation that will slam the brakes on Internet for all and deny millions—especially in rural areas—the important opportunities that high-speed Internet brings.”

As is usually the case with net neutrality fights, none of that is actually true. The courts have already ruled that it’s well within the FCC’s right to impose or repeal net neutrality rules provided their arguments are based in factual reality. The only thing the FCC can’t do is abdicate its federal consumer protection authority, then try and tell states what to do (something the Trump FCC tried and failed to accomplish).

Meanwhile, the rules generally give ample leeway for big ISPs to engage in dodgy and anti-competitive behavior — if they’re just slightly creative about it. And the FCC, regardless of party, has a very shaky track record as it pertains to standing up to industry on any issue of substance, meaning the idea they’d even enforce the rules with any consistent vigor is largely performative.

Derek Turner, a sector analyst over at consumer group Free Press, told me that while big ISPs put on a big show about being concerned about the rules via their trade groups, actual executives aren’t worried about the rules in the slightest. To the point where they’re not even mentioned in investor-facing statements, because they know it’s not going to impact broadband investment — or anything else:

“The impact of FCC regulation is simply a non-factor in the minds of ISP executives and investment analysts,” he told me. “Title II and Net Neutrality were not mentioned, or even hinted at, by a single ISP on any full-year 2023 investor calls or at other investor conference appearances following these calls, and no analyst asked any question about or related to this proceeding.”

Long time telecom sector analyst Blair Levin is making similar observations:

“Like its predecessors, this policy debate will generate significant headlines and commentary, [but] is unlikely to generate significant changes in how the ISPs operate, nor material changes in their revenues, margins, or opportunities,” New Street Research policy analyst Blair Levin explained in a research note (subscription required) issued earlier in the week.”

So why then are big ISP trade organizations constantly lying and freaking out about the rules’ impact?

The real worry for big providers like Comcast and AT&T is that this could result in, someday in some distant theoretical future, actual efforts by the FCC to hold them accountable for things like exploitative market rates only made possible by monopolization and corruption. You know, stuff like rate caps, or real punishments for ripping subscribers off with bullshit fees and predatory charges.

But again, there’s not much of a real worry here. The FCC at this point is largely a laughable non-factor when it comes to U.S. consumer protection. It’s generally staffed by some of the most politically feckless revolving door regulators imaginable; folks more worried about their next political post or think tank gig than protecting consumers (the Gigi Sohn fiasco shows what happens should you challenge this).

The kind of folks who currently staff the FCC can’t even acknowledge that monopoly power is a problem in public-facing statements, much less propose any sort of market remedy for it. Big ISPs like AT&T and Comcast are mostly just whining because they very much want things to remain exactly as they are: unchecked monopoly power, limited competition, and feckless oversight. Same as it ever was.

Telecom monopolies like their regulators cowed, feckless, and powerless. Even the faintest pretense that they might engage in anything else makes their well-funded policy groups cry like a colic baby.

Filed Under: broadband, consumer protection, fcc, gigabit, high speed internet, investment, michael powell, net neutrality, regulation, title ii