For two decades, the regulatory environment fostered a marketplace that enabled the Internet to experience significant growth.
Competition flourished as consumers benefited from affordable prices and increased broadband access. However, recent studies have shown capital expenditures by the nation’s largest Internet Service Providers has fallen since the Federal Communications Commission (FCC) began to regulate Internet service providers as public utilities. That trend is likely to continue after Governor Steve Bullock signed an executive order last week to enforce net neutrality in government contracts, despite FCC preemption.
The current slowdown in investment and buildout of broadband infrastructure is troubling for rural states like Montana – costs can be higher, distances greater and markets relatively smaller. These challenges already make it difficult for providers to expand connectivity for consumers. As of this writing, Montana is among a handful of states that will enforce rules for broadband operations that contrast with the rest of the nation, giving providers another reason to take their business elsewhere. Should this executive order set precedent, the whole industry may be forced to adhere to different rules by individual state. At a time when we should be doing more to incentivize broadband investment in rural areas, last week’s development yields the opposite.
Governor Bullock’s attempt to enforce net neutrality rules on his own could be challenged in court. This effort attempts to sidestep the FCC's preemption by making net neutrality a condition of state contracts, rather than a law applying broadly to any Internet service. But in our small state, nearly every major provider has important contracts with the government. We can count on added uncertainty in Montana’s business climate until the effective applicability of this rule is determined.
The FCC plan will restore power to police the Internet to the Federal Trade Commission (FTC). This agency has protected internet users from unfair, deceptive and anticompetitive practices for the two decades before the FCC’s 2015 net neutrality rule. The core principles of net neutrality – unfettered access of the entire Internet and transparency about broadband providers’ practices – will remain intact. Governor Bullock has rightfully underscored the importance of affordable and accessible broadband for economic development and entrepreneurship in Montana, but that is achievable under our current system.
A state-by-state patchwork of rules and regulations on net neutrality is not the answer. Congress is in the best position to work with the FCC and FTC to achieve a governing framework that enables the Internet to thrive without placing undue regulatory burden on our service providers.
The Montana Chamber of Commerce is dedicated to open and unencumbered access to the Internet. It’s a fundamental building block for new businesses forming throughout Montana. However, we also realize that achieving connectivity for these businesses and rural communities requires policies that foster private investment in broadband expansion.
The Bullock Administration’s net neutrality executive order—while well-intended — stymies efforts for telecommunication companies to build the very network we need to be economically competitive in the 21st century and beyond. We look forward to working with the Governor, Montana Legislature and our Congressional delegation on this important issue to Montana’s economy.
Creating an optimal business climate and encouraging infrastructure investment are core objectives of the Montana Chamber’s 10-year strategic plan, Envision 2026. Broadband providers need a consistent regulatory environment that incentivizes network enhancement to benefit all consumers.