The Federal Communications Commission recently proposed a regulation aimed at “Restoring Internet Freedom,” which is seen as a first step toward rolling back “net neutrality” rules enacted during the Obama administration. The rollback is welcome news. The last thing we want is to turn the Googles, Facebooks and Amazons of the world into dinosaurs like Con Edison or the old AT&T monopoly of the 20th century.
But there is an additional reason to resist net neutrality: Regulating the internet like the electric company has serious implications for future generations.
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The Obama-era rules classified internet service providers as public utilities under Title II of the 1934 Communications Act, bringing an end to the hands-off approach that has guided U.S. regulation of the internet since the Clinton administration.
The internet is one of the rare examples of what economists call a “general purpose technology” (GPT). Such technologies bring sweeping, revolutionary change upon their arrival, and come along at most a few times a century. The wheel, writing and the waterwheel are examples of early GPTs. At the dawn of human civilization, hundreds and sometimes even thousands of years passed between the arrival of new breakthrough technologies like these. In more recent times, the discovery of GPTs has sped up. The industrial revolution brought the arrival of the steam engine, railways and the spread of electricity, for example.
Unlike most innovations, which tend to bring small improvements that are limited in both scope and impact, the arrival of GPTs can hit the economy with a dramatic shock. These shocks spill over across many market sectors, and their effects can be disruptive, with the power to move the entire economy. Such changes are accompanied by both benefits and risks, and it is because of the downside risks that progress — which is what the arrival of GPTs represents — is often heavily resisted.
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The Luddites, for example, were 19th century British textile workers who protested against the new equipment that could replace them in factories. In modern times, we see similar resistance to new technologies from groups like taxi drivers, whose livelihoods are threatened by new companies like Uber. It would be uncaring to ignore the harm that new technologies can bring to people’s lives. But to focus only on the downside risks associated with new technologies is also to ignore all their upside benefits.
The internet also brings risks. It makes it easier for potential terrorists to find one another and plan attacks. On a less serious level, online shopping outlets like Amazon threaten traditional brick-and-mortar retail stores. Dealing with these problems takes time, and real people are harmed as we learn to cope with the initial disruptions. But the internet also brings nearly infinite benefits. It is used by 911 operators to handle emergency calls, and it facilitates everything from shopping to entertainment to work.
It may not be obvious, but future generations stand to benefit the most, by being born into a world where technology is as advanced as possible and where the initial challenges associated with technologies have been dealt with and resolved.
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The invention of the automobile put a lot of horse-drawn carriage drivers out of work. But the fact that this upheaval was dealt with in the early 20th century — and not postponed until later — means we were all born into a better world, one that offers a more comfortable life with more opportunities to travel and explore the many wonders of our globe. In this sense, the sooner new technologies arrive, the better a world we leave behind for our children and grandchildren.
As the FCC moves forward with its effort to turn back net neutrality regulations, we should all appreciate the importance — and fragility — of a technology like the internet. Applying too heavy a hand on the internet risks destroying the innovation that will leave a better world behind after we’re gone. Recognizing this danger requires humility and selflessness from regulators, as well as from the public. Regulating new disruptive technologies with an iron fist may bring us short-term comfort. But this tendency is actually selfish when viewed from a long-term perspective.
The FCC received millions of comments in support of its initial net neutrality rules, which demonstrates just how powerful the urge to control new technologies is. But we must resist the temptation to be the Luddites of the modern age. If we won’t do it for ourselves, perhaps we will keep the internet free for the sake of those who will inhabit the earth long after we are gone.
— James Broughel is a research fellow at the Mercatus Center at George Mason University and author of the new book “Regulation and Economic Growth.”