ICYMI: Regulation Would Only Hamper the Web
November 22, 2011
Regulation would only hamper the Web
The Internet has flourished for two decades without burdensome federal regulations. In its early days, a hands-off approach helped it grow and evolve rapidly. The Federal Communications Commission adopted a sensible noninterference policy in 1998, and hundreds of billions of dollars of investment in high-speed broadband infrastructure followed.
Without broadband, do-it-all smartphones and two-way video calls would still be the stuff of science fiction. Broadband has created nearly a million jobs and become an essential part of daily American life. Broadband networks have powered the information and communications industries, which in 2009 accounted for more than 3.5 million high-salary jobs and about $1 trillion in economic activity.
Despite all this, the FCC is about to reverse course and begin regulating the Internet. Unless the Senate acts on a measure under consideration this week, Internet service providers will be subject to the commission's new "Net neutrality" rules.
Under these mandates, broadband companies would lose control over the traffic and technology flowing through their infrastructure. Government bureaucrats would tell companies what is and is not a "reasonable" way to operate their systems. These regulatory burdens would discourage Internet service providers from innovating and investing, inject uncertainty into a thriving sector of our economy, and jeopardize the information industry's vast potential for growth.
More regulation would diminish broadband providers' expected returns on their capital. Lower returns mean less investment, which means fewer jobs created. Smaller companies would suffer the most, as they operate on thinner margins. With unemployment over 9 percent, do we really need this kind of regulatory overreach?
The government's primary rationale for these new rules is that broadband providers must be prevented from blocking certain online content and services. On the surface, this is an admirable goal. We, too, believe in an open Internet free of unreasonable discrimination. But market forces have and will continue to prevent such discrimination. A company attempting to block certain content would create frustrated customers who would simply switch Internet providers.
Indeed, despite a decade of Net neutrality advocates' doomsday warnings that rampant discrimination is imminent, the Internet remains open. The few instances of bad behavior have been dealt with swiftly by the free market or by the FCC using the tools it already has. In short, Net neutrality is a big-government solution in search of a problem.
Moreover, this FCC power grab is unprecedented and, in our estimation, unlawful. Congress has never given the commission the authority to regulate Internet providers' management of their networks.
Furthermore, the American people have shown their disdain for government interference, particularly when it comes to how private companies manage and maintain their investments.
In 1999, former Democratic FCC Chairman William Kennard said, "The fertile fields of innovation across the communications sector and around the country are blooming because from the get-go, we have taken a deregulatory, competitive approach to our communications structure - especially the Internet." In that spirit, we are urging our fellow senators to vote to repeal the FCC's unwarranted broadband regulations. We must preserve the open Internet as a platform for innovation and economic growth.
