U.S. Attacks Internet Freedom

Internet users have much to fear from a federal panel’s recent vote for adoption of a plan to regulate the Internet’s broadband networks.

The 3-2 decision by the Federal Communications Commission in favor of so-called “net neutrality” rules is a stunning change from the long-held congressional consensus that the Internet should remain free from government regulation.

Critics argue U.S. involvement will impede development of the worldwide Web. The dissenting FCC commissioners shared that view in rejecting rules FCC Chairman Julius Genachowski proposed and the majority adopted.

The FCC regulations, the dissenters argue, will inhibit innovation and scare off private investment. In our still-weak economy, many argue (including WMB) this could tip us into a double-dip recession.

In WMB's view, free enterprise works best in this country with a minimum of government regulation. Consumer protection must be balanced in relation to business interests. Neither can succeed without the right mix.

Wallet Impact Felt

When FCC Chairman Genachowski first unveiled his plan for net neutrality last spring, the news scared cable and telecommunications investors.

Shares of Comcast Corp. dropped 9 percent; Cablevision Systems Inc., 6 percent; and Time Warner Inc., 5 percent. Even though the decline was brief, it shows the impact from the prospect of government expanding its regulatory reach into the Internet.

The purpose of the regulations, according to proponents of net neutrality, is to promote universal access to Web sites by ensuring a free flow of Internet traffic.

This may sound beneficial but, as a practical matter, this federal regulation will lead to constraining price controls for network providers.

Having to treat all broadband traffic equally means text and video content would have to flow at equal speeds and be charged the same price.

The FCC’s adopted plan essentially proposes to regulate broadband lines as if they were traditional phone lines, on which all traffic is the same.

But all traffic, as managed by cable and telecommunications companies, is not the same on broadband networks.

No Fixing Needed

FCC Commissioner Robert M. McDowell, writing for the Wall Street Journal, says:

“Nothing is broken that needs fixing ... The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s.

“Its nature, as a diffuse and dynamic global network of networks, defies top-down authority. Adequate laws already exist to protect consumers.

“Furthermore, the Obama Justice Department and the European Commission both decided this year that net neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure.”

Leave Internet Alone

WMB believes this FCC action could serve as a major deterrent to global economic expansion and job creation.

The Internet is a frontier, and we believe it is still in its infancy. Any government constraints on access could stunt growth.

There are many industries throughout the world that depend on data and file transfer. In most cases, speed and security are essential to success.

By contrast, the U.S. government cannot run many federal agencies without inefficiency, incompetence and waste. What makes regulation of the Internet any different?

This FCC intrusion is at best unnecessary and at worst a gross overstep of government authority over free enterprise.

These rules serve no real beneficial public purpose; they should be shelved, permanently.

This post is by TechMan, WMB co-author who blogs about trends, issues and ideas affecting industry, business, technology and consumers. If you like this post, please share it.