The WasteWatcher: The Staff Blog of Citizens Against Government Waste

NYT Is Completely Wrong on Internet Freedom

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


The New York Times’ April 30 editorial on the effort by Federal Communications Commission (FCC) Chairman Ajit Pai to restore internet freedom gets everything wrong, particularly the claim that giving something for free as an inducement to sell services is somehow bad for consumers and small businesses. 

Under prior FCC Chairman Tom Wheeler, the agency investigated whether offering free data to consumers could “restrict consumer choice, distort competition, and hamper innovation.”  The Times claims that if Chairman Pai allows this practice to continue, “broadband companies will probably use their gatekeeping position to give themselves a leg up.” 

These contentions are absurd:  free data is great for consumers.  For example, AT&T is offering an “unlimited plus” phone and data plan for $90 per month for one line and $145 per month for two lines that includes DirecTV (which it has owned since July, 2015), as well as HBO and dozens of other streaming channels.  The plan includes a $25 per month savings on DirecTV.  But that plan, even with the DirecTV discount, is more expensive than the T-Mobile phone and data plan for $50 per month for one line and $100 per month for two lines, which includes unlimited music and video streaming (including DirecTV and HBO).  Verizon also has an unlimited data plan, which includes video streaming (with DirecTV, among many other choices) and free mobile hotspots, at $80 for one line and $140 for two lines.  These deals will get even better once the FCC adopts Chairman Pai’s plan to stop regulating internet service providers (ISPs) under Title II of the Communications Act of 1934 as if they were common carrier rotary telephone companies.

And if AT&T decides one day that DirecTV can only be available on its network, and not others, the Federal Trade Commission is perfectly equipped to determine whether that violates the antitrust laws. 

The Times is also incorrect about the potential negative impact of Chairman Pai’s plan on small firms and start-ups.  The FCC was told by 22 small ISPs that Title II had a negative impact on financing, development, and deployment of new services for their consumers, calling it a “black cloud” over their operations. 

However, it is unlikely the Times, or other critics of Chairman Pai’s plans, will ever say anything positive, not even a “thank you” for the new transparency in rulemaking, or the establishment of the Office of Economics and Data.  The failure to previously have such an operation at the FCC, which has jurisdiction over one-sixth of the economy, is an omission that should leave everyone wondering how the agency was ever able to judge the cost-benefit impact of its decisions. 

The proposed rules that will be considered on May 18 will provide consistent, clear guidance to the entire internet ecosystem, increase competition, spur innovation, and be good for consumers, taxpayers, and the economy.

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