The Net Neutrality Debate: Twenty Five Years After United States v. AT&T and 120 Years After the Act to Regulate Commerce

by Bruce M. Owen
SSRN Papers
Dec. 22, 2010

Proponents of net neutrality may recognize their own fears and goals, for example, in the following 120-year-old statement:
… [T]he paramount evil chargeable against the operation of the transportation system of the United States as now conducted is unjust discrimination between persons, places, commodities, or particular descriptions of traffic. The underlying purpose and aim of the [proposed legislation] is the prevention of these discriminations. . . .
This is from the legislative history of the first modern attempt by the federal government to regulate directly the behavior of large firms, in this case railroads. The result was the 1887 Act to Regulate Commerce, which contained this key provision:
[I]t shall be unlawful for any common carrier [railroad] subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.
This and subsequent legislation gave the now-defunct Interstate Commerce Commission (ICC) the power to prevent discrimination of the kind feared by proponents of net neutrality. The policy did not work.

Railroads continued to discriminate, charging different prices for hauling different commodities. Railroad tariffs grew longer and more complex each decade. In the end, before it was abolished in 1995, the ICC was little more than the titular head of a series of highly discriminatory and dysfunctional regional transport cartels. There are few today who believe that this century-long experiment with regulation achieved net benefits for Americans.

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