President Obama's recent call to regulate the Internet like the old telephone system is puzzling. The Internet is widely viewed as one of the greatest innovations of modern times. Its success is typically attributed to the longstanding commitment to keep the Internet unfettered by regulation. Treating the Internet like a telephone would seem to be a step backwards that would impede its future success.
Perhaps the best evidence about the onerous nature of telephone-style regulation is Google Fiber. Google Fiber explored offering its own voice service, but decided against it in part because of the substantial regulatory burden. It is easy to see why. The Code of Federal Regulations reveals that telephone-style regulation includes an array of economic restrictions, regulatory approvals, and accounting and reporting requirements. This would be a radical change for the Internet, which has never been subject to this type of regulation. And as many network neutrality proponents have recognized, telephone-style regulation would not prevent broadband providers from charging content companies for faster, guaranteed access.
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