Lately there has been a push to have the government impose “net neutrality” and regulate the internet as a public utility.  A lot of people seem to think that this would be a good thing.  But before letting the government camel into the internet tent maybe we should look at previous examples of what happened before.  After all there have been dynamic industries that became regulated.  we should looks at what happened to them and what that cost everybody before rushing into what could be a debacle for every body concerned. :
http://www.engadget.com/2015/02/02/fcc-will-reportedly-ban-internet-slow-lanes/?ncid=rss_truncated

https://gigaom.com/2013/06/19/peering-pressure-the-secret-battle-to-control-the-future-of-the-internet/

Looking at the articles, I get certain feeling of deja vu over this. This story is very similar to what happened at the beginning of the 20th century and it’s a story that did not end well for those companies involved. In the end, if the internet becomes a public utility we, the customers are going to be the big losers, just like, in the end the customers of that other industry ended up being the losers.

Those that advocate net neutrality and the turning of the internet into a “public utility” should look at the consequences in another industry that did the same thing. Replace the FCC with ICC and Internet with railroad and look at 1915 rather than 2015 and you can get a good look at what’s likely going to happen with “net neutrality.”

In 1915 the railroads were coming under rate regulation by the ICC to provide fair service. Was the rate regulation necessary? I don’t think so. Rates on the four major Chicago to East coast trunk lines trended downward for all of the last quarter of the 19th Century. The  standard explanation was because large shippers such as Standard Oil were getting “unfair” rates. But most of it was because operation efficiencies were being passed along to customers because the competition between the four large trunk line was so fierce.

Now as to  those “unfair rates that Standard was getting Now those rates existed because the railroad had to provide fewer switching service to Standard becuase Standard shipped entire trainloads in unit train service and Standard’s smaller competitors shipped essentially single carloads. Standard insisted that the operating efficiencies of Standard shipping directly be passed back to Standard and thus to Standard’s customers.  The reason Standard passed on those saving was, that even with it market domination Standard still got an advantage by making it’s oil products as cheap as possible.

https://archive.org/details/freightterminal04droegoog

Now some of the trunk line railroads, the PRR, for instance pushed for the ICC takeover in the belief that it would bring normalcy to the business. The rate regulation would, for instance eliminate Standard’s special rates. And the four large trunk lines would no longer be competing constantly on rates. They gained an advantage from the regulation the same way that ATT and Comcast will gain an advantage.

On the other hand other railroads like the New Haven were screwed over by the arrangement. In a mileage based rate schedule the New Haven was going to be definite loser. If the PRR had 1000 miles east to west, the NH had barely 300. Now the NH had a long term business plan to mitigate this by creating a fifth trunk line through Canada through aquisition of some smaller railroads( Boston And Maine, The Rutland) and additonal construction of a bridge line into NYC, the country’s biggest market(The NYW&B) that plan was killed by the New Haven’s inability to set better rates for traffic.

In the end, the ICC regulations hurt all the railroads in the North East. The story for those railroads is a loong tale of prosperity turning to ruin. You can see that story in ruined railroad facilities, abandoned trackage and dperessed economies all over the Northeast to this day.

This how the ICC regulation story ended. In addition to a very expensive bailout by the government for the dead railroads of the Northeast. In the end we all paid for the things enacted by the government in the early 1900s.:
https://www.youtube.com/watch?v=GHmyYqfNYnc

It’s just a classic case of watch out for what you wish for, you just might get it. When you advocate for regulations you essentially handing your business to people who may not have your business’s interests in mind. There will be new taxes and I can guarantee that legislation will be proposed and probably enacted so that those extra costs cannot be passed on to customers.

https://medium.com/tech-liberation/new-fcc-rules-will-kick-at-least-6-million-households-offline-58eeba0b3b71

In fact the broadband companies may not be able to pass on those newly enacted customers without losing big chunks of them. The people lobbying for the title II regulation are like the big shippers and some Trunk lines in 1907, lobbying for what they see as an advantage, without undertstanding that by doing this they creating a deal with the devil. Anybody who buys broadband stock expecting great things is just kidding themselves. At least for a long term investment. Regulation is going to make the internet les able to respond to changes and les profitable:
http://www.coyoteblog.com/coyote_blog/2015/02/kevindrum-finds-absolutely-ubiquitous-feature-of-regulation-to-be-mysterious.html

I should tell you how the ICC story more less ended for the railroads. The regulations more or less went quickly to outright takeover supposedly caused by the national emergency of WW1. If you look closely you can see that the ICC created the problems that caused the ICC, coincidently to recommend the takeover. The railroads were able to get control of their property back under the Taft Adminstration, but they carried the ICC like a millstone aroung their necks for most of the 20th Century.

http://en.wikipedia.org/wiki/United_States_Railroad_Administration

Frankly I think that everybody who believes that an internet takeover by the government should consider that waht you get is an internet run by the likes of John Gruber and managed by the same type people who created the healthcare.gov website. A government run or regulated internet is not something that will be good for the big content producers, the broadband suppliers or the customers. If your business relies on the cloud, if you like to stream video or want to write new apps, if you do anything at all on the internet you take the exampel of what happened to the railroads to heart and lobby against this takeover.

http://sultanknish.blogspot.com/2013/10/government-is-magic.html

http://reason.com/blog/2015/02/05/the-fccs-big-internet-power-grab-comes-d