A Hippocratic oath for the Internet?

Yesterday a federal appeals court dealt a blow to the FCC’s plans to expand its jurisdiction from traditional phone and media regulation onto the Internet. In response to this clear judicial ruling, proponents of so-called net neutrality regulation are scrambling to figure out how the FCC can expand its authority to regulate the Internet—either through some new regulatory contortion, or through the passage of legislation that would expand the FCC’s authority.

However, rather than rushing to overturn the longstanding consensus that the Internet should remain free of burdensome regulation, perhaps now is the time to take a step back and consider: What is the harm new regulations seek to prevent? and as important, What is the harm that may inadvertently result from this new regulation?

Proponents of net neutrality have long argued that prescriptive regulation is necessary to “keep the Internet open and free.” These arguments are often accompanied by warnings that U.S. is “falling behind the rest of the world” in broadband penetration.

Now, it is certainly true that certain geographic areas and demographic groups fail to enjoy the full benefits of the Internet that the rest of us take for granted. And we should not be complacent in addressing these disparities. However, regulators must also be mindful that when addressing deficiencies in Internet access they do no harm to the broader Internet economy.

For while it is true America has gaps in coverage and access for limited populations, it is also true that when viewed across the entire broadband ecosystem—access, software and applications, consumer devices, content and services—the United States not only enjoys a highly innovative, competitive, pro-consumer broadband market, but that the U.S. is at the epicenter of the entire global broadband economy.

Don’t believe it? Try out this thought exercise: name a non-U.S. Internet company that competes globally. Stumped? Off hand, I can think of two. Research in Motion, the Canadian developer of the Blackberry smart phones and innovator in wireless e-mail delivery; and Skype, the Estonian Internet phone call and video-conferencing software developer. Compare that with the litany of U.S.-based companies that lead the world in Internet innovation: Apple, Oracle, Yahoo, Microsoft, Intel, Qualcomm, Google, E-Bay, Amazon, YouTube, Twitter, FaceBook; the list goes on and our economy benefits from the jobs these companies create and the productivity gains they generate.

All of this innovation and investment takes place despite the absence of net neutrality regulation. Indeed the president himself seemed to miss the irony when he issued his most recent and explicit call for net neutrality on—wait for it—YouTube. A company that went from start-up, to global phenomenon, to multi-billion-dollar enterprise in less than two years. Indeed, YouTube’s success should not be possible if the fears of net neutrality proponents were well founded.