Net Neutrality and Investment in the US: A Review of Evidence from the 2018 Restoring Internet Freedom Order

George Ford

Review of Network Economics, 2018, vol. 17, issue 3, 175-205

Abstract: In 2018, the Federal Communications Commission’s Restoring Internet Freedom Order reversed its 2015 decision to apply common carrier regulation to broadband Internet access services under Title II of the Communications Act of 1934. Empirical evidence indicating negative investment effects of the regulation played a key role in this reversal, though the quantification of these investment effects were a matter of substantial controversy. This article surveys the studies cited in the recent decision and the Commission’s scrutiny of them. In all, the Commission considered eight primary works but relied on only two of them, a culling process that relied on four principles: (1) simply comparing outcomes before-and-after an event is not a valid impact analysis; (2) before-and-after comparisons are more probative if regression analysis is used to condition the outcomes by accounting for potentially relevant factors like economic growth, sales, and so forth; (3) the causal effects of a regulation are best determined with reference to a counterfactual; and (4) the application of proper methods does not excuse the use of bad data. These principles are mostly uncontroversial and are consistent with the modern practice of impact analysis.

Keywords: Net Neutrality; investment; regulation; counterfactual; Federal Communications Commission (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1515/rne-2018-0043

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