Opinion

Not neutrality, courtesy of the FCC

Photo of Wayne Crews
Wayne Crews
VP for Policy, Competitive Enterprise Institute
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      Wayne Crews

      Wayne Crews is vice president for policy and director of technology studies at the Competitive Enterprise Institute, a former scholar at the Cato Institute and former Senate and FDA staffer. He can do a <A HREF="http://www.youtube.com/watch?v=xqDg7_f3Ka4">handstand on a skateboard</A> and loves <A HREF="http://www.youtube.com/watch?v=68UkojnnVhU">motorcycles</A>.

      Wayne's work explores the impact of government regulation of free enterprise: Areas of interest include antitrust and competition policy, safety and environmental issues, and information age concerns like privacy, online security, broadband policy, and intellectual property. Wayne is the author of the yearly report, <A HREF="http://cei.org/cei_files/fm/active/0/10KC_2008_FINAL_WEB.pdf">Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State</A>, and he co-authored the recent reports <A HREF="http://cei.org/pdf/5705.pdf">This Liberal Congress Went to Market? a Bipartisan Policy Agenda for the 110th Congress</A> and <A HREF="http://cei.org/pdf/4911.pdf">Communications without Commissions: A National Plan for Reforming Telecom Regulation</A>. Prior to the assorted government bailouts now taking place, he wrote the report <A HREF="http://cei.org/pdf/6425.pdf">Still Stimulating Like It’s 1999: Time to Rethink Bipartisan Collusion on Economic Stimulus Packages</A>.

      Wayne is co-editor of the books <A HREF="http://www.catostore.org/index.asp?fa=ProductDetails&method=&pid=1441156">Who Rules the Net: Internet Governance and Jurisdiction</A> (2003) and <A HREF="http://www.catostore.org/index.asp?fa=ProductDetails&pid=1441127">Copy Fights: The Future of Intellectual Property In the Information Age</A> (2002). He is co-author of <A HREF="http://www.catostore.org/index.asp?fa=ProductDetails&method=cats&scid=30&pid=1441099">What’s Yours Is Mine: Open Access and the Rise of Infrastructure Socialism</A> (2003), and a contributing author to others. He has published in the Wall Street Journal, Chicago Tribune, Forbes, Communications Lawyer, the International Herald Tribune and others. He has made various TV appearances on Fox, CNN, ABC, CNBC and the Lehrer NewsHour, and his regulatory reform ideas have been featured prominently in such publications as the Washington Post, Forbes and Investor’s Business Daily. He is frequently invited to speak, and has testified before congressional committees on various issues.

      Earlier Wayne was a legislative aide in the United States Senate to Sen. Phil Gramm, covering regulatory and welfare reform issues. He was an Economist and Policy Analyst at Citizens for a Sound Economy Foundation, and has worked as an economist at the U.S. Food and Drug Administration and as a Research Assistant at the Center for the Study of Public Choice at George Mason University. He holds an M.B.A. from William and Mary and a B.S. from Lander College in Greenwood, South Carolina. He was a candidate for state senate as a libertarian while at Lander.

      Here are links to Wayne’s CEI <A HREF="http://cei.org/articles_for_author/41">articles</A>, <A HREF="http://cei.org/studies_for_author/41">studies</A> and media citations.

The Federal Communications Commission (FCC) has just finished collecting yet another round of comments in the “net neutrality” debate over proposed regulation of Internet traffic management (you may find CEI’s latest filing by Ryan Radia here). It is important to appreciate the profound significance of the fact that the FCC is unwilling to even affirm that it will leave future managed, specialized Internet services alone. And wireless services? The FCC is chomping at the bit to regulate those.

“Agency neutrality” is the only proper public policy; just leave the competitive marketplace alone. But the FCC won’t even stay out of what doesn’t exist yet.

While for the time being, customized services are largely exempt from regulatory scrutiny, the FCC clearly wants that to change: “[W]e are sensitive to any risk that the growth of managed or specialized services might supplant or otherwise negatively affect the open Internet,” the agency said in an earlier request for comments. The agency asked — as if it were even conceivable in this predatory environment for no one to take the bait and say “yes” — “Should any of the rules proposed here for broadband Internet access service apply to managed or specialized services?”

The FCC is not asking for input to dissuade itself, it intends to regulate; this is not a “should we?” proceeding, it is a “we are going to” proceeding. Unless Congress stops it, of course; that’s where we are now with autonomous, unelected, unaccountable agencies across government.

Of course, nothing about fostering “smart pipes” on the Internet precludes the maintenance and expansion of the “dumb” ones with unfettered access that characterize our experience now. Dumb pipes can flourish alongside the new. That “background hum” of the Net will escalate with private investment in smart, specialized networks over coming decades.

If the FCC were concerned about consumer welfare rather than it’s shrinking turf (from a reason-to-exist perspective), it would best contribute by being out front articulating the case for smart pipes, not treating the Internet’s infrastructure as some inexplicable husk that fell out of the sky. Indeed, the agency seems to adhere to a “big bang” theory of infrastructure origins: It just showed up somehow, and we needn’t worry about where future generations of infrastructure will come from.

Critical new developments in economics such as the work of Hernando De Soto and Daron Acemoglu stress the private property rights foundation undergirding the creation of wealth in developing nations.

What the FCC, in every important respect, fails to realize is that property foundation’s importance for wealth creation in frontier areas — like broadband infrastructure deployment and pricing — in which property rights have yet to be adequately extended. I always argue that homo sapiens is fairly competent at legitimizing property rights for “short and fat” property like a house or a car; but we remain in the Stone Age when it comes to legitimizing proprietary approaches to “long and thin” property (or intangible property and many other complex varieties).

We lack a “John Locke for the digital age,” so to speak; perhaps capitalism is still too new historically for one to have emerged. Nonetheless, the proper policy is “agency neutrality”; Congress should command the runaway FCC to allow both open and proprietary network approaches to flourish, not impede the latter with regulatory constraints.