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Top Economists tell FCC economic evidence shows no market failure or need for net neutrality regs

A wide swath of top communications economists have written to the FCC that they do not believe the economic evidence warrants the FCC's proposed preemptive Open Internet regulations, and that the best approach to address the FCC's potential concerns is a case by case approach.

  • This high-powered private economic analysis, on top of the DOJ's rejection of the the FCC's alleged market failure thesis, makes it increasingly difficult for the FCC to argue it has legitimate "reasons," that are not arbitrary and capricious, to warrant either deeming broadband to be a regulated service or that the competitive broadband market must be regulated for openness in direct contravention of law, precedent and existing policy.




FCC deeming broadband to be regulated opens a Pandora's Box

Proponents of the FCC asserting new "deeming authority," to "deem" broadband to be a regulated phone service and thus subject to the FCC's existing Title II telephone authority, have not even begun to answer the most fundamental questions of what such a foundational change would mean.

  • Premature characterizations that this nouvelle regulatory "deeming" would somehow be easy, clean, or containable, simply have not thought through the potential chaos, havoc, and uncertainty that such a radical, foundational, and over-reaching regulatory "deeming" would wreak on:
    • Legal/policy precedent, clarity, and stability;
    • Business investment, and innovation -- assumptions, incentives, models and practices;
    • Economic growth, private investment and job creation;
    • Industry financial stability, contracts, and debt covenants; and
    • Trust, cooperation, and respect the FCC needs to fulfill its mission and its National Broadband Plan.
  • Consider the following to be a preliminary, non-exhaustive list of important questions the FCC and others will have to confront, answer and address, before the FCC seriously considers "opening" this potential Pandora's Box of ills.  


Impact of court vacating Comcast net neutrality order --'s press release

FOR IMMEDIATE RELEASE                                                     

April 6, 2010                                                                                          

Contact:  Scott Cleland 703-217-2407



NetCompetition Comments on Impact of D.C. Circuit Vacating FCC Comcast Order

Press Release on new FCC "de-competition policy" -- NetCompetition's FCC NPRM Reply Comments


April 5, 2010

Contact:  Scott Cleland 703-217-2407 Submits Reply Comments on FCC Open Internet NPRM

“A new FCC de-competition policy could take away competition’s benefits from Internet users”


WASHINGTON – Chairman Scott Cleland submitted reply comments to the FCC’s proposed Open Internet NPRM.


Harms of a Potential New FCC De-Competition Policy -- Reply comments to FCC Open Internet NPRM

The FCC's proposed Open Internet Regulations and/or the oft-rumored potential re-classification of broadband as a Title II telephone service effectively would create a new FCC "de-competition policy." (For the one-page PDF submitted to the FCC click here)


A new FCC "de-competition policy" would:

Why is New America's wireless research so terrible?

The New America Foundation and Slate Magazine is presenting a forum on Friday April 2nd in D.C. entitled: "Why your cell phone is so terrible" featuring:

Read Downes' CNET Column on Title II reclassification: a great overview why its such a bad idea

Kudos to Larry Downes for his excellent guest column on CNET: "What's in a Title? For broadband its Oz vs. Kansas." I recommend reading it.

It is a very readable, informative overview of the great folly it would be for the FCC to reclassify broadband services from unregulated information services to regulated common carrier telecommunications services.

Mr. Downes' piece makes it abundantly clear that any Title II reclassification by the FCC would be a monumentally bad idea.




FCC's non-technology-neutral proposals perversely promote discrimination -- per Phoenix Center report

George Ford of the Phoenix Center has penned another incisive analysis about the real world impact of net neutrality and the FCC's Proposed Open Internet regulations.

  • "Sabotaging Content Competition: Do Proposed Net Neutrality Regulations Promote Exclusion?" is an important read for anyone seeking a substantitve understanding of the impact of the FCC's proposed rules.
    • George Ford and Michael Stern's core conclusion: "...the proposed net neutrality rules of both the FCC and Congress... can actually promote such exclusionary behavior. That is, the incentive to monopolize is greater under net neutrality."

    The Phoenix Center's profound insight here got me thinking, (which is always my highest compliment) so let me share my takeaways building on their conclusion; takeaways that show why net neutrality is such an intellectually and economically bankrupt concept.

    • First, not only is net neutrality "a solution in search of a problem," but the FCC's proposed "solution" would make the net neutrality "problem" they allege worse than the status quo!

Title II reclassification: FCC can't redefine competition as monopoly without being arbitrary/capricious

The discussion at the Federalist Society about former U.S. Solicitor General Greg Garre's excellent legal analysis  (that the FCC does not have the legal authority to promulgate Internet traffic rules), surfaced what I believe to be yet another insurmountable barrier for the FCC to overcome -- beyond the litany of legal barriers outlined by Mr. Garre.

  • FCC reclassification of broadband as Title II common carriage would practically force the FCC to redefine competition in a way that would be arbitrary and capricious. 

Let me explain. 

Public Knowledge's Gigi Sohn laid out  the counter argument to Mr. Garre's analysis that the FCC could reclassify broadband as Title II by simply revisiting the basis for the FCC's 2002 decision and overturning it as wrong on three counts:

  1. Information services and telecommunications services are no longer necessarily intertwined;
  2. Facilities based competition has not arrived;
  3. Consumers are no longer protected. 

Ms. Sohn added this about what the FCC could do: "They just have to give a reasoned explanation. They don't actually have to show that the new decision was better than the old decision." -- per Washington Internet Daily.

Key ACI study shows regulation is anti-innovation

Kudos to Larry Darby of the American Consumer Institute for his outstanding new study on the destructive effect of regulation on innovation. Please read it if you are at all interested in innovation.

The study debunks the views of some that government, regulation and regulators are somehow a font of innovation. 

After reviewing the relevant literature and evidence on the subject, Dr. Darby concluded that:

  • innovation is naturally flourishing without government involvement or micromanagement;
  • burdening broadband providers with new common carrier burdens would severely discourage innovation; and 
  • limiting innovation in one part of the ecosystem would ultimately diminish innovation in the entire Internet ecosystem.

At core, the new notion floated by some that more FCC regulation would encourage innovation is nonsensical and unsupported by any literature or evidence.

The big takeaway here is that new "Mother may I" regulations, which effectively require some market participants to get FCC approval for their innovations, in order to protect or advantage others' innovations, is not innovation policy. It is old-fashioned industrial policy where government picks market winners and losers. This is a policy approach long proven to grossly underperform market-based policies.










Q&A One Pager Debunking Net Neutrality Myths