Amidst COVID-19, the Internet is “Clothed in the Public Interest” – Should it Be a Public Utility?

October 6, 2020

As Americans approach seven months of social distancing in their homes during the COVID-19 pandemic, it is more obvious than ever that the internet is essential for citizens to participate in daily activities of this “new normal.”  From going to school virtually, working from home, attending telehealth doctors’ appointments, ordering essential products, and even possibly attending court proceedings, access to affordable and reliable internet has proven its worth.

Although the debate on whether internet should be a public utility is not new, COVID-19 has highlighted America’s digital divide problem—reviving the related back-and-forth political battle of “net neutrality,” which is the principle that everyone should have equal access to the internet. Proponents of federal regulation effectively reason that internet with sufficient broadband is a service “clothed in the public interest,” and access to affordable and reliable internet should be a universal right, not a privilege for only those who can pay—drawing significant parallels to the value and essential characteristics of other utilities, such as electricity and water.

The phrase “clothed in the public interest” stems from Munn v. Illinois, the foundational Supreme Court case that established the federal government’s ability to set rates for businesses  that are of public interest—those that affect the rights, privileges, or finances of the public at large.  Thus, by looking at all the surrounding circumstances—maybe, a global pandemic that forces entire countries to self-isolate?—and  how that business affects the public, the federal government has the ability to set just and reasonable rates “for the protection of the people and the promotion of the general welfare.”

Policymakers are urging the Federal Communications Commission (FCC) to exercise its regulatory authority and consider transforming high-speed internet service into a public utility at the national level.  Bernie Sanders is one of those policymakers, who even before the pandemic, unveiled a progressive $150 billion proposal titled “High-Speed Internet for All” comprised of five parts:

  1. To require internet service providers to offer an affordable “Basic Internet Plan” that provides quality broadband speeds;
  2. To establish new “minimum broadband speeds” no lower than a 100 Mbps download speed and 10 Mbps upload speed;
  3. To use existing antitrust authority to break up companies that offer internet service as well as media content that runs on those internet services;
  4. To provide $150 billion to create “publicly owned and democratically controlled, co-operative, or open access broadband networks; and,
  5. To end data caps and speed throttling that limit users’ ability to use internet for more complex activities, such as videoconferencing and downloading larger files.

Presidential Candidate Joe Biden has taken a more neutral approach—stopping just short of expressly declaring the internet “a utility” like water or gas—to ensure that the public has access to universal, reliable, affordable, and high-speed internet by asking the federal government to provide utility-like funding—building out national internet capabilities, creating a publicly-owned broadband network, and then requiring service providers to offer affordable, high-speed internet as a public utility.

Others, however, are hesitant to treat internet as a public utility, although they recognize the importance of “solving” the digital divide.  As discussed above, those in favor of regulating the internet typically cite to similarities between the internet and electricity. Both technologies are considered “general purpose technologies”—having significant implications across the economy—and both are owned by public and private providers. 

However, several differences support the argument that the internet should not be a public utility. For example, electricity prices and investments are subject to much more regulation than the internet, and electric utilities (specifically distribution networks) typically operate as monopolies. In contrast, internet prices and investments do no not have such regulations, and internet providers currently operate in an open, competitive market. Additionally, electricity costs have increased more than internet costs, and electricity innovation has been slower than the internet.

But despite the differences between already-regulated energy and the unregulated internet, one fundamental principle still ties them together: these technologies are not optional in order to equally participate in society.

But despite the differences between already-regulated energy and the unregulated internet, one fundamental principle still ties them together: these technologies are not optional in order to equally participate in society.  Recognizing this fact, both the House and the Senate—despite their political disagreements on whether to treat internet as a utility to the same extent as electricity—have introduced bills during the 2019–2020 session addressing equal access to affordable internet: S.B. 1167 and H.R. 1644.

In conclusion, COVID-19 has definitely instigated the discussion on how the internet should be managed in the United States to ensure equal access to the technology at an affordable cost.  Some advocate for federal regulation like other expressly defined public utilities, and others advocate for less. But one fact remains uncontested—that access to affordable and reliable internet is essential to participate in our new, quarantine-like world. How Congress will effectively accomplish this end is unclear. However, determining whether to actually regulate the internet as a public utility under the doctrine of Munn v. Illinois seems somewhat immaterial so long as the end result ensures “protection of the people and the promotion of the general welfare.”

Meredith Doswell