On Jan. 22, 2018, Governor Steve Bullock (D) issued an executive order requiring that internet service providers (ISPs) doing business with the state of Montana adhere to “internet neutrality principles.” The order is a ranting overreaction to the Dec. 14, 2017, adoption of the Restoring Internet Freedom Order (RIFO) by the Federal Communications Commission (FCC). It will harm economic growth and reduce internet service for Montanans, particularly those who live in underserved rural communities, where there is the greatest need for expanded access to broadband. The order is also likely to be ruled unconstitutional.
The RIFO simply restored the internet’s classification as an information service, rather than a telecommunications service, as intended under the Telecommunications Act of 1996 as part of the agreement by former President Bill Clinton and Congress to regulate the internet with a light-touch. On Sept. 23, 2005, the FCC adopted four principles of internet freedom: Consumers are entitled to (1) “access the lawful Internet content of their choice;” (2) “run applications and use services of their choice, subject to the needs of law enforcement;” (3) “connect their choice of legal devices that do not harm the network;” and (4) “competition among network providers, application and service providers, and content providers.”
The internet flourished under this statutory and regulatory regime, developing into one of the greatest innovations in history, creating millions of jobs and a global explosion in technology, including in Montana, which is home to a booming tech sector.
The executive order seems to be acknowledging this success by stating, “guided by principles of internet neutrality, the information society and Montana’s economy have flourished.” However, that is clearly not what Gov. Bullock means.
The executive order spits out the same propaganda that net neutrality proponents have used for years; that ISPs must not “block lawful content … throttle, impair, or degrade lawful internet traffic … or engage in paid prioritization.” In other words, go back to the restrictive regime that was established in the FCC’s Feb. 26, 2015, Open Internet Order, which placed the internet under Title II of the Communications Act of 1934, originally intended for a landline, copper-wire telephone monopoly. The rules, which were in place for less than three years as an aberration in the history of the internet, stifled investment and innovation. They were particularly harmful to smaller ISPs, including many that serve Montanans.
Internet users have unique needs and priorities, and ISPs should be able to offer packages that appeal to different audiences. And not all internet traffic should be treated equally. For example, to download a 200-page PDF with a one-second delay in internet speed does not matter; but to perform heart surgery or relay critical medical information, it matters a great deal.
The RIFO restored the longtime, bipartisan, pre-2015 regulatory classification for internet. It also reinstated the Federal Trade Commission’s ability to investigate privacy and consumer protection violations by ISPs, strengthens its enforcement capabilities, and increases transparency requirements.
The internet is not contained within a single state’s boundaries and therefore the participants in the internet ecosystem, including ISPs, can be only be regulated by the federal government under the Commerce Clause, Article I, Section 8 of the Constitution. Yet, Governor Bullock is waving a magic wand and subjecting ISPs to his own rules for his own state. He is also setting himself up for a loss in court, with Montanans footing the bill for his grandstanding.
Most unfortunately, the governor’s uninformed and unnecessary executive order could very well hinder the deployment of broadband in rural and small communities in Montana. ISPs may not want to do business with the state of under these burdensome regulations. If they perceive the governor as hostile to their business model, they may decide not to expand broadband in Montana at all.
Advocates in favor of overreaching big government have demonized the issue of net neutrality to death. They are not interested in greater access and competition, and they fail to mention that these rules only apply to ISPs, which are by far not the largest players in the internet ecosystem. Governor Bullock’s blind acceptance of their screed in his executive order, if it stands, will drive ISPs out of Montana and mostly hurt those who are on the wrong side of the digital divide.