Few official bad ideas come along that are as bad as this one.
To appease net neutrality agitators, the FCC proposed Open Internet rulemaking that officially considers whether private broadband companies should be price and profit regulated like public utilities, in order to regulate all Internet traffic equally.
Now the FCC has subjected Congress to hearing an unnecessary and unwarranted debate about whether the FCC should reclassify broadband as a Title II telephone monopoly service.
For anyone struggling to understand this complex issue, here are the top-ten reasons why regulating broadband as a utility is a very bad idea.
It’s a problem pretending to be a solution: Net neutrality has long been “a solution in search of a problem.” Now net neutrality advocates’ demands have become so extreme that their latest proposed “solution” arguably has become the biggest problem threatening America’s Internet infrastructure and ecosystem.
It’s a trillion-dollar bait-and-switch: The FCC effectively promised industry light-handed regulation to encourage $1.2 trillion in private-risk-capital infrastructure investment over the last decade. The industry has already invested, built out and respected the FCC’s rules of the road. If the agency now breaks that promise and imposes strict regulation to address a largely hypothetical issue, that decision would be rendered a notorious trillion-dollar bait-and-switch. Such an arbitrary and impulsive FCC policy whipsaw would destroy an enormous amount of private capital and economic activity, prompt a tsunami of lawsuits and a decade of legal and regulatory chaos.
All pain no gain: It’s hard to imagine a worst cost-benefit result than this. The FCC would be imposing maximal obsolete regulation to prevent a practically non-existent problem. All cost for no discernible benefit.
Slow Internet to government speed: Title II regulation of broadband would abruptly decelerate the fast-speed of Internet business to the slow-speed of government. Title II decision-making is glacial, because it naturally slows part of the process. What could take hours or days to accomplish in business time could take several months or even years in FCC Title II time.
Government-run Internet: Title II is “mother-may-I?” regulation. It would require every business decision of consequence to be approved by the FCC in advance, i.e., changes in services, prices, terms, conditions, or infrastructure. Ironically, it would put the business Internet fast-lane in a government slow-lane littered with unnecessary regulatory speed bumps, potholes, stop lights, and inspection stations.
The most obsolete regulation for the most modern sector: Congress ended common carrier regulation of railroads in 1976, trucking and bus lines in 1980, and airlines in 1984. The common carrier Public Switched Telephone Network is becoming obsolete and being transitioned out of existence because it makes no sense to invest in it, given its unworkable burden of a thousand obsolete common carrier regulations. Common carrier regulation of broadband would threaten the growth and productivity of the communications revolution of broadband, smartphones, tablets and the Internet of things.
No good deed goes unpunished: For a decade, the broadband industry has respected, cooperated and agreed with FCC policy guidance that users should have the freedom to access the legal content of their choice on the Internet – even when the FCC did not have the legal authority to require it. Punishing responsible behavior is unjust, counterproductive and bad policy.
Zero pricing is unsustainable: The hidden sub-text lurking behind this issue is that Internet “edge” interests – including the largest Internet companies – want the FCC to set a permanent zero-price guarantee and economic subsidy for all downstream video Internet traffic sent to consumers. This arbitrary regulation is economically unsustainable, and would unfairly force consumers to shoulder all the cost of upgrading the Internet infrastructure caused by the huge, asymmetric video-streaming traffic of the largest Internet companies. It’s politically unsustainable because it would generate unnecessary corporate welfare subsidies for the least needy.
Only the fringe left wants it: After a decade of vociferous political organizing to “Save the Internet” via net neutrality and common carrier regulation of broadband, fringe left-wing pressure groups have made minimal progress in convincing Americans at large. Despite pursuing an activist, media-centric lobbying strategy, a recent Pew study exposed net neutrality as a relative non-issue to Americans. In the first four months of the year, less than 1 percent of news programs mentioned net neutrality and print coverage was limited largely to 6 newspapers.
FCC overruling Congress: Reclassification would have three unelected FCC officials effectively overruling the policy and will of Congress, and directly violate Congress’ Internet law policy: “It is the policy of the United States… to preserve the… competitive free market… Internet… unfettered by Federal or State regulation.”
It would also directly counter the purpose of the FCC’s 706 authority to “encourage the deployment… of advanced telecommunications capability to all Americans.” In addition, it would flout the House’s Resolution of Disapproval of the FCC Open Internet Order of 2011, and ignore the 290 members of Congress who signed letters to the FCC opposing Title II reclassification in 2010.
Seldom does an agency waste more people’s time as unnecessarily as the FCC is wasting Congress’ time with net neutrality.
It is a monumentally bad idea to break what works well needs no fixing, especially when it would involve breaking the single most essential growth and innovation-enabling infrastructure that our economy needs to succeed for today and the future.
Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, a research consultancy for Fortune 500 companies, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.
