FCC Commissioner Demolishes Net’s New Rules, In 3 Quick Points

After casting a futile vote against the FCC’s plan to regulate the Internet as a public utility, Republican Commissioner Ajit Pai delivered a blistering attack on the new rules.

In his dissenting statement, Pai advanced three main objections to the Commission’s “Open Internet Order:” (RELATED: The Top 10 Failures of FCC Title II Utility Regulation)

1. The Internet has grown rapidly, creating untold economic benefits, largely because the government has refrained from interfering with it.

“For twenty years, there’s been a bipartisan consensus in favor of a free and open Internet … [and] the results speak for themselves. Dating back to the Clinton Administration, every FCC Chairman—Republican and Democrat—has let the Internet grow free from utility-style regulation.”

“But today, the FCC abandons those policies. It reclassifies broadband Internet access service as a Title II telecommunications service. It seizes unilateral authority to regulate Internet conduct, to direct where Internet service providers (ISPs) make their investments, and to determine what service plans will be available to the American public.”

“This is … a radical departure from the bipartisan, market-oriented policies that have served us so well for the last two decades.” (RELATED: Net Neutrality Bait and Switch to Title II)

2. Title II regulations attempt to solve problems that don’t exist with enough consistency to address with federal government regulation.

Everyone seems to site Verizon’s nasty spat with Netflix here. The story goes that Verizon throttled Netflix’ streaming speeds until Netflix paid a ransom, thus Net Neutrality is necessary to protect hapless consumers and poor, little old Internet companies like Netflix (the folks at The Washington Post actually went so far as to make this connection directly).

No one mentions that Verizon took an absolute shellacking in the court of public opinion and clever consumers found a solution to the throttling that literally takes five minutes to fix — in short, the free market and free Internet largely prevailed on its own (as both are apt to do). Needless to say, far and few between are government regulations that are cheap and take five minutes to enact and don’t cause 10 more unintended problems in their wake (are there any?).

Here’s what Pai had to say:

“So the FCC is abandoning a 20-year-old, bipartisan framework for keeping the Internet free and open in favor of Great Depression-era legislation designed to regulate Ma Bell. But at least we’re getting something in return, right? Wrong. The Internet is not broken. There is no problem for the government to solve.”

“Nevertheless, the Order ominously claims that ‘[t]hreats to Internet openness remain today.’ It argues that broadband providers ‘hold all the tools necessary to deceive consumers, degrade content, or disfavor the content that they don’t like,’ and it asserts that the FCC continues ‘to hear concerns about other broadband provider practices involving blocking or degrading third-party applications.'”

“The evidence of these continuing threats? There is none; it’s all anecdote, hypothesis, and hysteria. A small ISP in North Carolina allegedly blocked VoIP calls a decade ago. Comcast capped BitTorrent traffic to ease upload congestion eight years ago. Apple introduced Facetime over Wi-Fi first, cellular networks later. Examples this picayune and stale aren’t enough to tell a coherent story about net neutrality. The bogeyman never had it so easy.”

3. Title II regulations will lead to new taxes and slower broadband speeds for consumers.

“Literally nothing in this Order will promote competition among ISPs. To the contrary, reclassifying broadband will drive competitors out of business. Monopoly rules designed for the monopoly era will inevitably move us in the direction of a monopoly. If you liked the Ma Bell monopoly in the 20th century, you’ll love Pa Broadband in the 21st.”

“One avenue for higher bills is the new taxes and fees that will be applied to broadband. If you look at your phone bill, you’ll see a ‘Universal Service Fee,’ or something like it. These fees—what most Americans would call taxes—are paid by Americans on their telephone service.”

“Consumers haven’t had to pay these taxes on their broadband bills because broadband has never before been a Title II service. But now it is. And so the Order explicitly opens the door to billions of dollars in new taxes. Indeed, it repeatedly states that it is only deferring a decision on new broadband taxes—not prohibiting them.”

“These Internet regulations will work another serious harm on consumers. Their broadband speeds will be slower.” (RELATED: Title II Will Kill Internet Investment, Critics Claim)

“The record is replete with evidence that Title II regulations will slow investment and innovation in broadband networks. Remember:  Broadband networks don’t have to be built. Capital doesn’t have to be invested here. Risks don’t have to be taken. The more difficult the FCC makes the business case for deployment, the less likely it is that broadband providers big and small will connect Americans with digital opportunities.”

“The Old World offers a cautionary tale here. Compare the broadband market in the United States to that in Europe, where broadband is generally regulated as a public utility. Today, 82 percent of Americans have access to 25 Mbps broadband speeds. In Europe, that figure is only 54 percent. Moreover, in the United States, average mobile broadband speeds are 30% faster than they are in Western Europe.”

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