Two years ago, as unelected bureaucrats contemplated introducing swift new Internet regulations, one man in the FCC had the courage to stand alone in his opposition to Net Neutrality.
Then FCC Commissioner Ajit Pai has been a fierce opponent of Net Neutrality since the regulations were first introduced in 2015. He made a wave of television appearances voicing his concerns with the regulations, arguing that Net Neutrality is “a solution that won’t work to a problem that doesn’t exist.”
Net Neutrality, for those who may have forgotten, was a 313 page set of new FCC rules that would regulate Internet service providers. The 2015 regulations reclassified broadband Internet as a public utility, thereby “prohibiting broadband providers from elevating one kind of content over another.”
As any free market advocate will tell you, price controls distort market signals, deteriorate quality, and diminish resources. Because resources are scarce, economic calculation allows a price system to naturally arise in order to compensate for man’s unlimited wants and needs. As demand for a scarce good increases and its supply remains unchanged, the quantity of available goods decreases, thereby causing prices to rise to counter the increased demand. This is why luxury goods are more expensive than normal and inferior goods.
This is also why it is imperative for ISPs to have the ability to raise prices on content with a higher demand. As libertarian historian and talk show host Tom Woods argues,
“If prices stayed the same or increased only slightly, no one would bother conserving these scarce things. Instead of a family of five huddling in one hotel room, they might splurge and get two rooms — thereby leaving one fewer room available to another desperate family during an emergency.
If the price of water stayed the same, they might consider washing their kitchen counter with it. But when the price is allowed to rise, they use the water only for its most urgent uses, thereby saving water for others who likewise have urgent uses for it — you know, like drinking.
If prices are allowed to rise, potential suppliers will come out of the woodwork, driving from all over the state and even from out of state to help people and thereby get a share of the dough. The shortage will be alleviated all the faster.”
The analogies Tom Woods provides us with would be exactly replicated under Net Neutrality. Artificially low Internet prices will cause consumers to use up more bandwidth than they otherwise would, thereby diminishing available bandwidth and depriving others of being able to use it.
Enter Ajit Pai. When President Trump took office in January, he appointed Pai as Chairman of the FCC. Yesterday, Pai unveiled that he plans on rolling back Net Neutrality.
In a statement given in Washington on Wednesday, Pai channeled his inner Tom Woods, stating,
“It’s basic economics: The more heavily you regulate something, the less of it you’re likely to get.”