Take net neutrality back to the future: Column

America lags behind countries such as Lesotho, Belarus and Slovenia when it comes to Internet speed. In order to fix our lackluster Internet service, we must go back to the future.

President Obama's call on the Federal Communications Commission this week to reclassify the Internet as an essential utility provides the vehicle we need. Both American history and international lessons illustrate the wisdom of regulating the Internet this way.

Historically, private companies that provide basic infrastructure, such as railroads or electricity, have been subjected to what's known as "common carriage" regulation. Due to a lack of competition, these companies often have great power over their customers. Common carrier regulations are intended to protect consumers by requiring companies to serve all customers on a non-discriminatory basis.

In its early days, the Internet was subject to common carriage, too. Consumers connected to the Internet through a call over a telephone line to an Internet service provider (ISP). Because the local loop of telephone copper was already a common carrier, it was open to any ISP. This gave small firms equal footing with dial-up giants such as CompuServe and America Online. America's Internet flourished due to the competition.

All that began to change in the late 1990s as deregulation, which was already applied to transport common carriers such as railroads, airlines and trucks, came into vogue for telecommunications. Cable and telephone companies providing Internet access assured Congress they would enter each other's markets and compete against one other if the government would relax regulations.

Lawmakers agreed to deregulation believing that the resulting competition would remove the need for public oversight. President Clinton began the deregulation process, and President George W. Bush exacerbated it. But lawmakers eventually came to realize that the grass was not greener in the new cyber landscape.

The decision to loosen regulations exempted ISP giants such as Time Warner and Verizon from opening their lines to competing ISPs. Thus, it created a roadblock for start-up ISPs who wanted to get in on the growing demand for Internet service by using cable and phone wires to offer a competing service.

Consequently, the U.S. now faces a duopoly problem: 96% of households have access to two or fewer broadband service providers, according to the FCC, and the situation will only grow worse as demand for higher speeds grows.

Instead of greater competition, deregulation has brought mergers. Innovation has been slow. America ranks 31st in the world in terms of average download speeds and 42nd in average upload speeds, according to a recent study by Ookla Speedtest. Prices for broadband are also much higher in the U.S. than in many other countries, a 2013 report released by the think tank New America Foundation's Open Technology Institute found. With few restrictions on ISPs and limited options for consumers, ISP giants have been engaging in anti-competitive practices, such as slowing down or even blocking customers' access to some websites.

Now President Obama wants to change that. But the Telecommunications Industry Association, which represents ISPs, cautioned in a statement that "We saw a significant negative impact on investment the last time restrictive ... regulation was in place, and no one will benefit from returning to that failed policy."

On the contrary, other countries' experiences demonstrate that stricter regulation actually improves Internet service. Since 2000, almost all developed countries have extended some kind of common carrier arrangement to broadband access, according to a 2010 study by the Berkman Center for Internet and Society at Harvard University. Great Britain and France, for example, required their former monopoly telecom companies to make their infrastructure available to rival ISPs, which rent it at regulated rates and compete on price and speed.

The study found evidence that these common carrier policies drove prices down and speeds up for Internet users. In France, the average Internet speed is more than three times as fast as it is in the U.S., while the price for each megabyte per second is less than half. Meanwhile, Brits get Internet service comparable to what is available in the U.S. for less than $6 a month.

Germany, by contrast, illustrates the drawbacks of weak regulation. Until recently, Deutsche Telekom had a monopoly over Internet access, controlling 97% of the market by refusing to open its facilities to competitors. As a result, the ISP giant was able to saddle Internet users with an overpriced service that included features many consumers did not want. Eventually, European Union officials pressured German lawmakers to put stricter regulations in place. Deutsche Telekom now controls only 47% of the market, better Internet technologies are being implemented and prices are going down.

The Harvard study concluded, "Regulation is seen as having promoted competition in the telecommunications market and fostering investment and growth." The Telecommunications Industry Association, however, warns that "Such a move would set the industry back decades."

Perhaps that's not such a bad thing.

Mark Grabowski is a lawyer who teaches Internet law at Adelphi University.

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