Final answer:
Regulating common carriers could lead to regulatory capture, where firms being regulated have undue influence over the rules, which may limit competition and innovation. Historically, government regulations have sometimes restricted competition and led to a concentration of power, such as with AT&T in the phone industry or the CAB in the airline industry. Balancing regulation with the need for telecom companies to profit and invest in service improvements is a challenge the FCC faces.
Step-by-step explanation:
The question of whether granting the government power to regulate common carriers will have unintended consequences is an important one in the context of economic and regulatory policy. Throughout history, particularly in the United States, government regulation has often limited competition. For instance, for a large part of the 20th century, AT&T was the sole phone service provider permitted by law, and the Civil Aeronautics Board controlled air travel, approving all fares and routes from 1938 to 1978.
These regulations can sometimes lead to a phenomenon known as regulatory capture, where regulated firms heavily influence regulations to their own advantage, reducing competition and keeping prices high. Concerns about regulatory burden on Internet service providers as common carriers must be balanced with the need for telecommunications companies to operate profitably. Without sufficient profits, there's a risk that companies might not invest in improving or expanding services, especially in underserved areas. The decision about how to regulate, made by bodies like the Federal Communications Commission (FCC), is complex and aims to prevent a divided Internet of 'haves and have-nots' while promoting fair competition and consumer welfare.