Will new federal rules make the Internet better?
The FCC obviously thinks otherwise, and in its December 2010 rules, the Commission asserts that it has authority to regulate net neutrality under Section 706 of the Telecommunications Act of 1996. That section requires the FCC to report to Congress each year as to whether broadband service is being deployed to all Americans in a reasonable and timely manner. However, it’s unclear whether section 706 grants the FCC power to enact sweeping net neutrality rules.
Freedom of Contract vs. Common Carriers
So why doesn’t Congress just adopt a net neutrality law? Well, there are philosophical differences about the proper scope of the law. I don’t have time to go into all the details, unfortunately, but opponents of net neutrality legislation argue that broadband providers have a built-in incentive to provide content-neutral service and, therefore, the basic principle of freedom of contract should apply. Supporters of the rules argue that, although broadband providers are private companies, they perform a public service (like the operators of trains or power companies) and so the terms of their contracts should be subject to regulation.
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