On February 14 my Berean colleague Mark Clauson posted comments on the FCC’s proposed “net neutrality” regulations. I would like to argue in favor of the FCC’s proposal. While the full proposal will be released on February 26, the date of the committee vote, the nuts and bolts of the proposal have already been made available through both commentary in “Wired” and through a fact sheet on the FCC’s website.

The FCC’s proposal keeps the Internet open, free, and dynamic. The proposal supports competition and preserves the current mode of operation of the Internet. The proposal in fact codifies the “people’s law” into “formal law” in a way that supports entrepreneurship and human creativity.

To better understand the FCC’s proposals, we need to understand the basics of how the Internet works with respect to this proposal. There are three main groups of people directly involved in this proposal: 1) end users (you, me, anyone using the Internet), 2) broadband providers (companies that provide data services – Verizon, Comcast), 3) edge providers (companies providing Internet services – Amazon, Apple).

You and I pay broadband providers to use  data delivered at certain speeds over the Internet (through “the pipe”). The edge providers create the services which the end users utilize. Historically Internet and users have had the freedom to send or receive data without undue restriction. Net neutrality (the “open Internet”) keeps broadband providers from dictating to the end user (and the edge provider) what data can flow over the broadband provider’s “pipe”. Broadband providers want to control the flow of data through the pipe.

The proposed FCC legislation is to prohibit broadband providers from unduly restricting the flow of data. The US Court of Appeals for the District of Columbia clearly outlined the problems its is January 2014 ruling (p. 6).

Proponents of net neutrality—or, to use the Commission’s preferred term, “Internet openness”—worry about the relationship between broadband providers and edge providers. They fear that broadband providers might prevent their end-user subscribers from accessing certain edge providers altogether, or might degrade the quality of their end-user subscribers’ access to certain edge providers, either as a means of favoring their own competing content or services or to enable them to collect fees from certain edge providers. Thus, for example, a broadband provider like Comcast might limit its end-user subscribers’ ability to access the New York Times website if it wanted to spike traffic to its own news website, or it might degrade the quality of the connection to a search website like Bing if a competitor like Google paid for prioritized access.

This activity would curb competition by allowing broadband providers to favor some competing services. Broadband providers also seek to charge very high traffic fees to rival services further throttling competition. The FCC’s current proposal protects competition on the Internet by:

Bright Line Rules: The first three rules would ban practices that are known to harm the Open Internet:

• No Blocking: broadband providers may not block access to legal content, applications, services, or non-harmful devices.

• No Throttling: broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices.

• No Paid Prioritization: broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration – in other words, no “fast lanes.” This rule also bans ISPs from prioritizing content and services of their affiliates.

Part of the genius of our Western free-market economic system is knowing when to utilize the government to clearly define the “rules of the game” in such a way to enhance human creativity and the resultant economic growth and development. Intelligent rules regarding net neutrality are a good example of an appropriate regulatory role for government.