What will the new FCC Internet regulations cost the taxpayer?

Posted By on February 27, 2015

A debate over controlling free and open access to the “pipes of the Internet” is not as simple (or probably as inexpensive) as it sounds. While the Federal Communications Commission considered views for and against regulating the Internet on Thursday, called net neutrality,” the commission voted in favor by 3-2. In comments, FCC chairman Tom Wheeler said that this policy will ensure “that no one – whether government or corporate – should control free open access to the Internet.” 


Initially I hear “neutrality” and “open access” and it seemed like a no-brainer. As a consumer, I want high speed for everybody and a level playing field … but the argument is a bit more “nuanced” said Max Levchin, PayPal co-founder commented on CNBC Thursday morning. Those in favor are looking to keep “the pipes” open to all and prevents providers from throttling or pricing heavy data users if they require more bandwidth. Think NetFlix or YouTube as heavy users; the public wants the low cost content, but this requires ISPs opening their “pipes” to these content provider selling their services and using their routers, switches, airwaves and wires. Most consumers just want to be able to receive what they want when they want it without overpaying.

Now the cynic in me wants the open pipes and equal access to all … even if some companies use more bandwidth than others. I understand that the “pure content providers” feel disadvantaged if providers of both content and bandwidth control access and speeds … but don’t have much faith that the government regulates things all that well and that ultimately we’ll suffer due to more regulations, higher overhead costs and even more complaints (think regulated phone companies, airlines, post office, utilities, etc).

Speaking of estimating the cost to taxpayers … the numbers vary, just as they did with Obamacare nancyp_wehavetopass(are you keeping your existing plan, access to doctors or saving $2500 per year yet?)

"I’m still unsure exactly how much" net neutrality will end up costing taxpayers” says Michelle Ye Hee Lee, who writes the Washington Post‘s "Fact-Checker" column. "The pro-net neutrality camp says it’ll cost $0, the anti-net neutrality camp pegs it at $15 billion … it will be somewhere between there.” It looks like Americans want some additional regulation besides laws focused on monopolistic behaviors by companies, but we’ll have to implement it before we know … haven’t we heard that before, Nancy? Unfortunately the track record when assuming government can manage efficiently does not have me confident. I’ll be surprise if the taxpayer cost  hits the “close to $4 billion" calculated by Matt Wood, the policy director at Free Press.

It passed and will no doubt be challenged … but for now “net neutrality” supporters can be happy.


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