California’s “Net Neutrality” Law Already Raising Alarm by Imperiling Veterans

Well, things promptly took an ugly turn out in California, as they often do.

It’s amazing how quickly government campaigns to regulate internet service under the disingenuous “Net Neutrality” banner beget harmful unintended blowback.

In the latest debacle, California’s “Net Neutrality” law has prompted even the Biden Administration’s Department of Veterans Affairs (VA) to fear that the law could jeopardize veterans’ access to telehealth, cutting them off from accessing VA Video Connect with free data.

That shouldn’t surprise anyone who recalls the needless Obama era debate over so-called Title II Net Neutrality internet regulation, which had immediate negative consequences for American consumers once they finally succeeded in imposing it on behalf of powerful edge providers such as Google and Twitter.

Through two decades spanning both Democratic and Republican administrations, the federal government’s “light touch” regulatory posture toward internet service regulation had allowed the internet to flourish.  Then the Obama Federal Communications Commission (FCC) decided that what the internet really needed was more federal government regulation to “fix” an internet that wasn’t broken.  After several attempts, it finally succeeded in reclassifying internet service as a “public utility” subject to much heavier regulation.

You’ve almost got to admire the pro-regulation activists.  Managing to label new, heavy-handed government regulatory intervention as “neutrality” was a master stroke of Orwellian deception and misdirection.

As noted at the onset, the negative unintended consequences were immediate and grave.  For the first time ever outside of an economic recession, private internet investment actually declined.  Whereas wireless investment had increased by 33%, or $8 billion, between 2010 and 2013, it plummeted by $5.6 billion in just the first year after the Obama FCC imposed the new regulations.

Then in a welcome and quick reversal, the Trump Administration FCC under Chairman Ajit Pai rescinded the Obama FCC’s regulatory imposition and returned internet service regulation to the light-touch approach that prevailed under the Clinton and Bush Administrations, and even into the Obama Administration until 2015.  And whereas the negative consequences of the Obama FCC’s Title II Net Neutrality regulations were immediate and grave, the positive effects of Chairman Pai’s leadership were just as immediate.  Namely, in the first year following repeal, U.S. internet speeds rose almost 40%:

Broadband download speeds in the U.S. rose 35.8 percent and upload speeds are up 22 percent from last year, according to internet speed-test company Ookla in its latest U.S. broadband report.  The growth in speed is important as the internet undergirds more of our daily lives and the wider economy.  As internet service providers continue building out fiber networks around the country, expect speeds to increase…”  

Then, when it mattered most amid the coronavirus pandemic, U.S. broadband speeds increased an incredible 91% in 2020:

American internet users have had a very good 2020, according to research performed by FairInternetReport.  Median US internet speeds in 2020 doubled to 33.16mbps, up from 17.34mbps in 2019.  Covering the five years of 2016, 2017, 2018, 2019, and 2020, this is the largest speed increase seen in the US, with speeds staying essentially the same in 2016 and 2017 (8.91mbps and 9.08mbps respectively), and 2018 recording a median speed of 12.83.  

So whereas internet speeds stagnated during the 2016-2017 “Net Neutrality” years, they jolted upward after Chairman Pai restored the light-touch FCC regulatory posture.

Meanwhile, Europe fared far worse amid the pandemic while maintaining a more heavily regulatory approach. European networks struggled to satisfy higher demand, with government officials asking edge providers like Netflix to lower streaming video quality from high-definition to standard.

Leave it to California political leaders, however, to opt for the European regulatory model over the superior American light-touch model.

In 2018, California enacted regulations similar to the Obama FCC’s destructive Title II “Net Neutrality” effort.  Unfortunately, the potential harm extends beyond just California residents.  When individual states – particularly large states like California – regulate in ways that disrupt interstate commerce, they create a spaghetti bowl of conflicting regulations over matters affecting the nation’s economy.  Here, California’s law egregiously undermines federal interstate commerce by contradicting the FCC’s light-touch approach, thereby threatening the nation’s internet sector.

As reported by Politico, California’s internet regulation is even raising alarm within the Biden Administration:

Officials at the Department of Veterans Affairs are privately sounding the alarm that California’s new net neutrality law could cut off veterans nationwide from a key telehealth app, according to a government communication between federal agencies obtained by POLITICO.  Two internet providers in California have told the VA that the new law could force them to end agreements offering free, subsidized data to veterans participating in the telehealth app called VA Video Connect, according to the email from one VA official, who described the department as having “concerns” about the possibility.  Such a cutoff “would be nationwide and not limited to Veterans and caregivers in California,” the official wrote…  

The law prohibits broadband providers from blocking, slowing or otherwise discriminating against various types of internet traffic.  It specifically prohibits so-called sponsored data programs, also known as zero rating, in which carriers offer free or discounted data service to certain customers — for example, allowing free video streaming to a carrier’s wireless customers.  That raises potential concerns for the VA Video Connect app, which aims to help connect low-income and rural veterans with health care services.  The VA has coordinated with broadband providers to avoid data charges for use of the app. 

Accordingly, heavy-handed “Net Neutrality” regulations don’t just disrupt broadband investment and internet speeds.  They also threaten innovations like the VA’s health app, and innumerable others.  And not just existing innovations, but potential future applications that might run afoul of such heavy-handed and unnecessary laws and regulations.

Deceptively-named “Net Neutrality” regulations have proven themselves harmful to American consumers, and states like California must internalize those lessons and correct course accordingly.