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Economists write FCC to rebut statement from 74 Members of Congress

On May 24th, 2010, 74 Democratic members of the House of Representatives sent a letter to the Federal Communications Commission requesting the halt of net neutrality regulations.

Today, Policy Integrity’s Scott Holladay along with three other economists, wrote to the FCC in response. They state that the congressional note was “based on a misunderstanding of the current state of the Internet and does not accurately reflect the economic impacts of network neutrality.”

The most glaring error in the May 24th letter is its failure to recognize that the Internet currently operates under a de facto network neutrality regime. So the question is not whether to impose network neutrality on the Internet but whether to eliminate it.

The letter overlooks the ways net neutrality corrects market imperfections that skew profits away from content providers. By making it even more difficult for content providers to generate returns on their investment, eliminating net neutrality can have the result of driving content providers and end users off the Internet.

The letter also fails to recognize “the Internet” includes infrastructure and content. Weakening one to benefit the other is a step that does not benefit consumers; to maximize the value of the Internet to Americans, proper incentives for both broadband and content providers must be protected.