Hazlett in Financial Times: Time for Evidence-Based Policy

Writing in Financial Times, Professor Thomas Hazlett cites a federal appeals court determination in Comcast v. FCC that cable modem services and digital subscriber line (DSL) connections provided by phone carriers compete as unregulated "information services."

That leaves the door open for congressional mandates for broadband regulation, which Hazlett believes ignore market realities. He says mergers governed by the FCC and antitrust agencies have had no significant impact on broadband rivalry and that the rate of broadband adoption has increased following deregulation. In addition, non-neutral negotiated contracts between Internet Service Providers and favored firms or applications "rationalize resource use, and drive incentives for innovation," he says.

"In addressing new regulations for broadband," says Hazlett, "let's first see how these markets actually work, and how well the last batch of network sharing mandates performed."

Net Neutrality: Time for Evidence-Based Policy, Financial Times, April 17, 2010. By Thomas Hazlett.

"Cable, unregulated, led DSL in subscribers by nearly two-to-one through 2002. Then, with DSL deregulated, phone carriers narrowed the gap, adding more customers, quarter-to-quarter, than cable operators by 2006. The spurt in DSL growth relative to cable modem usage takes place at precisely the time the former was shedding 'open access' mandates, and cannot be explained by overall changes in technology. In short, DSL subscribership was up 65 per cent by year-end 2006 compared to the predicated (pre-2003) trend under regulation.

"The story in ultra-high-speed fiber-to-the-home (FTTH) services is similar. There was virtually no deployment until the Commission, in late 2004, declared that fiber networks would not be subject to access regulation. That move, according to industry analysts, unleashed investment. FTTH is now offered to over 15m homes, and networks are capable of supplying 100 MBPS downloads, on a par with services delivered anywhere."

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