by Christopher S. Yoo
Cato Institute
July 30, 2014
Regulation
Some have proposed the extension of common carriage regulation – provision of service at government-controlled uniform rates and service levels – to the Internet. Yet many who focus exclusively on the Internet era ignore the lessons of the legacy of regulated industries. Applying common carriage to railroads, trucking, airlines, oil pipelines, and other services proved very problematic. For one thing, nondiscrimination in rates – a key component of common carriage – is difficult to enforce when products vary in quality or cost. Common carriage also provides weak incentives to economize, raises difficult questions about how to allocate common costs, and deters innovation. Proponents of common carriage should actively engage with the institution’s recognized shortcomings.



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