A study released Monday by economists from George Mason University, Carnegie Mellon University and the University of Virginia said that the Federal Communications Commission’s proposed telecommunications regulation known as net neutrality would limit further broadband investments and innovation and substantively curtail consumer welfare.
“While there is no evidence of systemic market failures that might be remedied or ameliorated by the proposed rules,” the study read, “there is substantial basis for believing that the proposed regulations would harm competition, slow innovation, and reduce consumer welfare.”
Specifically, the study maintains that many of those practices that would be banned by the new regulations generally benefit consumers and foster competition and that the FCC’s existing framework is sufficient for the Commission to adjudicate traffic disputes and the like.
“Regulation can improve economic welfare only in the face of market imperfections, such as market power, externalities, or information asymmetries,” the study read. “While the markets at issue in this proceeding are characterized by product differentiation, high fixed costs and other deviations from the textbook model of ‘perfect competition,’ the evidence provides no support for the existence of market failure sufficient to warrant ex ante regulation of the type proposed by the Commission.”
Days after the U.S. Court of Appeals for the District of Columbia Circuit ruled the FCC lacked sufficient regulatory authority to regulate broadband services, a poll by Rasmussen found 53 percent of Americans in opposition to the FCC’s Net Neutrality rules. Among daily Internet users, that figure rose to 64 percent.
The FCC has announced that the deadline for public comment on the new regulation had been extended to April 26, to allow for additional industry and public consideration. Interested members of the public can comment here (proceeding 09-191).