Thomas Lambert’s How to Regulate urges regulators to diagnose the extent and causes of the problems they seek to solve and consider the benefits and costs of alternative solutions. It also warns that government officials are affected by the incentives and knowledge constraints they face, and regulations should be designed to mitigate this problem. The Federal Communications Commission’s Restoring Internet Freedom order provides examples of these principles in practice. In its assessment of blocking, throttling, paid prioritization, and other general business conduct of broadband providers, the order first utilized economic research to identify the extent and causes of the underlying problems the FCC sought to solve, then selected alternative solutions tailored to address the problems. In deciding whether to classify broadband as a Title I information service or a Title II telecommunications service, the FCC took note of regulators’ incentives under Title II to extend regulation to include regulation of prices, unbundling requirements, and other types of regulation that the FCC had imposed on telecommunications carriers in the past. Reclassifying broadband under Title I reduced the risk of expanded regulation that would expropriate broadband firms’ sunk investments.
Restoring Internet Freedom as an Example of How to Regulate,
Bus. Entrepreneurship & Tax L. Rev.
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