Conservatives lost on net neutrality. But they're winning the broadband debate.

When the Federal Communications Commission voted Thursday for stronger network neutrality regulations, liberals cheered. Conservatives, on the other hand, blasted the new regulations as a dangerous government overreach, and GOP lawmakers vowed to pass legislation to partially reverse the agency's actions.

But while this week's vote was a setback for conservatives, the right is winning the broader debate over internet regulation. Even after the vote, the government will take a more hands-off approach than it did during the Clinton years. Indeed, the approach Clinton's FCC pursued has become politically toxic. And FCC chairman Tom Wheeler has emphasized that he has no intention of exercising the full authority granted to him by a Republican Congress in 1996.

While conservatives might be out of power, their philosophy continues to shape how we regulate the internet. The dangers of excessive government regulation are accepted across the political spectrum, while concerns about big telecom companies abusing their monopoly power have become less and less salient.

Republicans' net neutrality nightmare was created by Republicans

(Chip Somodevilla/Getty)

The most contentious issue in the contemporary network neutrality debate has been "reclassification," a legal maneuver that gives the FCC broader authority to regulate the internet. The FCC needed to reclassify in order to enact strong network neutrality regulations, but conservatives warned that doing so would open up a Pandora's box of burdensome regulations.

The awkward thing about this is that the rules were drafted by a Republican Congress in the 1996 Telecommunications Act. In that legislation, Congress created two legal categories for online services: a low-regulation category for online services (known unimaginatively as Title I) and a high-regulation category for companies that provide basic infrastructure (called Title II).

When telephone companies began offering broadband access using a then-new technology called Digital Subscriber Lines, it was widely accepted that Title II — the stricter regime designed for basic infrastructure — would apply. After all, telephone companies had been governed under Title II for decades before that. Title II rules had ensured that telephone companies didn't strangle the burgeoning market for dial-up ISPs, which provided internet access over telephone lines.

But that began to change when the FCC under George W. Bush decided not to apply the stricter regime to the new technology of cable internet service. That led to a lawsuit arguing that the law required both cable and DSL internet service to be classified under Title II. The case went all the way to the Supreme Court, which ruled that it was up to the FCC to decide how to regulate broadband.

The Supreme Court vote was 6 to 3, but interestingly the vote was not along party lines. The conservative Antonin Scalia, who had practiced telecommunications law before joining the court, wrote a colorful dissent arguing that the law required the application of the stricter rules to the internet.

A decade later, many conservatives argue that applying these stricter rules to network neutrality rules would constitute a dangerous government takeover of the internet. They usually don't mention that the rules were drafted by Republicans, and that Justice Scalia believed the law required them to be applied to broadband networks.

Most liberals have given up on their favorite broadband policy

(Frédéric BISSON)

In the 1990s, liberal advocates for an open internet were not focused on network neutrality, a term that hadn't been invented yet. Instead, most favored a totally different regulatory strategy called unbundling.

The best way to understand unbundling is to think about how internet access worked in the dial-up era. Back then, your telephone company usually wasn't your ISP. Instead, your ISP was an independent company like AOL or Earthlink that used a phone company's lines to reach customers. These ISPs were protected by strict regulations that prevented telephone companies from shutting dial-up ISPs out of the market and taking their business for itself.

Unbundling was an attempt to transfer this model to the broadband era. It was a set of regulations requiring telephone companies to "unbundle" — or share at regulated rates — access to portions of their networks, so third-party ISPs could provide their own DSL service. In the late 1990s there were hundreds of ISPs that provided internet access over DSL lines.

This mode is still common in much of the developed world — especially in Europe. In these countries, most households have several options for internet access, all of them delivered over a shared connection owned by the local telephone monopoly.

Congress established unbundling rules in 1996, and the Clinton administration put them into effect. Many open internet advocates saw it as the foundation of a competitive market for internet access. But the rules were abandoned under President George W. Bush. And by the time Barack Obama took office in 2009, they had become so discredited that the FCC didn't try to revive them.

Obama's FCC is reflexively centrist

FCC Chairman Tom Wheeler (Mark Wilson/Getty Images)

One sign of how powerful the conservative worldview has become in the network neutrality debate is how strongly network neutrality advocates have disavowed any intention to use the full powers Congress has given the FCC.

For example, one big issue in the network neutrality debate is price controls. Such controls used to be a common feature of telecom regulation. Phone companies would have to get approval from regulators whenever they wanted to change their prices. Republicans have warned that reclassification could bring back those regulations, and they also argue that network neutrality itself is a kind of price control. Liberal activists have furiously denied these charges, underscoring how toxic the concept has become.

Similarly, services governed by Title II are subject to taxes to help subsidize access in rural areas. But this idea is so unpopular that Wheeler has pledged not to impose new taxes or fees on internet access.

If you want to see a serious liberal agenda for broadband, there's no better spokesman than Susan Crawford, a legal scholar we interviewed last year. She called for a "public option" for internet access, in which governments invest serious resources in next-generation internet access.

But in an era of tight budgets, there's no real prospect of this happening. Wheeler's FCC did preempt state-level laws that prevent local governments from investing in broadband infrastructure, but there's no real prospect of serious federal money being spent on broadband infrastructure.

Today the conservative vision for broadband infrastructure, in which networks are privately owned and lightly taxed and regulated, is accepted virtually across the political spectrum. Democrats are more reluctant to tax or regulate telecommunications infrastructure today than Republicans were 20 years ago. Today's network neutrality vote represents a small step toward greater regulation, but the broader trend has been in the opposite direction.

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