We’re about to see the fourth change of the party in the White House in this century, and that means a fourth time that telecom regulations will flip-flop in what I’ve called the regulatory yoyo. Regulatory policies have always changed to some extent when the party in power changes, but in this century, the degree of change from administration to administration is more intense than what we saw in the 70s, 80s, and 90s.

I’ve thought hard about why this is so. One clear reason is the explosion of broadband this century. At the end of 1999, about 100 million people in the U.S. used the Internet (compared with 330 million today), and most of them were using dial-up. It wasn’t until 2004 that there were more customers using DSL and cable modem than dial-up. It’s funny how the use of dial-up feels like the far-distant past. At the turn of the century a conscious decision was made by the FCC and Congress not to interfere with the fledgling and growing broadband industry.

In 2000, the FCC regulated telephone service, cable TV, and cellular service. 94% of homes had a landline at the beginning of 2000. There were 67.3 million cable households (64% penetration). There were 86.1 million cellphone users, about 41% of adults. Before the start of this century, the FCC had deregulated cable rates, although it continues to regulate issues like channel line-ups. The process of deregulating telephone rates started with the Telecommunications Act of 1996. While the cellular industry is regulated, it was never regulated to the same degree as landlines.

Much of the regulatory yoyo comes from attempts to regulate broadband. Democratic administration tend to be more pro-consumer and want to put some restraints on abuses by big ISPs. Republican administrations have been more hands-off in favor of letting the market regulate itself.

We’re about to see the third flip-flop on what has been labeled as net neutrality, but which has really been an attempt by Democratic administrations to put some regulatory constraints on big ISPs. The current FCC, under Chairperson Jessica Rosenworcel, restored the net neutrality rules in April of this year. The new FCC might not need to act to abolish net neutrality as was done by Ajit Pai in the previous FCC since there is a chance that the 6^th U.S Court of Appeals could uphold a challenge to that FCC order. But if the court doesn’t act, a new FCC will surely reverse that ruling – and they might not wait for the court to decide.

Another reason for the regulatory yoyo is that broadband issues have become partisan. That’s an interesting change over time. Only a miniscule percentage of people in the U.S. could have named the Chairman of the FCC in 2001. Decisions by the FCC didn’t make big press and most people never heard of most rulings by the FCC.

That changed over time, and there was 3.7 million comments made in the net neutrality docket in the 2015 net neutrality docket under Chairman Tom Wheeler. This grew to 22 million comments in the docket under Chairman Ajit Pai in 2017 (although many of them were faked). This interest can only be explained by the widespread use of social media and the Internet which allowed news of what the FCC is doing to spread widely.

What is ironic is that the regulatory yoyo is not great for big ISPs. CEOs of big ISPs have said many times over the years that they like regulatory certainty. They can figure out a strategy to deal with known rules and still thrive. But the yoyo keeps resetting the rules.

What’s particularly troublesome for big ISPs is that when the FCC kills regulations, states like California jump in to fill the void. California now has net neutrality rules and Internet privacy rules that are in place regardless of what the FCC does. The worst regulatory scenario for big ISPs is different rules in different states.

You might note that I mentioned big ISPs above. The big issues at the FCC have some impact on small ISPs, but not to the extent as on big ones. Small ISPs are often excluded from regulations or given relaxed rules since regulations are generally aimed at tempering the behavior of the biggest companies.

The regulatory yoyo provides fodder for people like me who write about it. But repeatedly going back and forth on regulation is not good for the broadband industry as a whole. One thing that is for certain – since we’re only one-fourth of the way through the new century, we’re not done yet with the regulatory yoyo.