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Must read Broadband industry letter to FCC: Title II reclassification would do incalcuable harm

In one of the best, most strongly-worded and serious letters to the FCC that I have read in my 18 years following FCC issues closely, the united broadband industry's letter to FCC Chairman Genachowski is simply a must-read; it explains why the FCC's serious interest in reclassifying unregulated broadband information services as regulated telecom services is among the worst and most destructive ideas the FCC has ever seriously considered.

The letter characterized Title II reclassification as:

  • "a radical new direction,"
  • "regulating the Internet,"
  • "a profound mistake,"
  • "betraying decades of bipartisan support for keeping the Internet unregulated,"
  • "misguided regulatory overreach," and a
  • "Pandora's Box."

A particularly strong summary statement was:

How much should Google be subsidized?

Pending FCC policy proposals in the National Broadband Plan and the Open Internet regulation proceeding would vastly expand the implicit multi-billion dollar subisidies Google already enjoys, as by far the largest user of Internet bandwidth and the smallest contributor to the Internet's cost relative to its use.

Interestingly, the FCC's largely Google-driven policy proposals effectively would:

  • Promote Google's gold-plated, 1 Gigabit broadband vision for the National Broadband Plan at a time of trillion dollar Federal budget deficits;
  • Recommend a substantial expansion of public subisidies for broadband that would commercially benefit Google most without requiring Google to contribute its fair share to universal broadband service; and
  • Regulate the Internet for the first time in a way that would result in heavily subsidizing Google's out-of-control bandwidth usage. 

I.   Does Google need more subsidies?

Google is one of the most-profitable, fastest-growing, cash-rich companies in the world, with over $10b in annual free cash flow, 17% revenue growth, and ~$25b in cash on hand.

FCC Chairman's "broadband engine" speech raises big questions

FCC Chairman Genachowski's speech to NARUC: "Broadband: Our Enduring Engine for Prosperity and Opportunity" raises some big open questions.

The biggest open question is whether Chairman Genachowski believes the titular "broadband engine" of his speech should remain a private sector "engine" that is private property and fueled by profit and investment returns, or whether the "broadband engine" should somehow become quasi public property, heavily regulated like a public utility, and more government funded and controlled.

Another big open question arises out of Chairman Genchowski's adoption of electricity as his new guiding metaphor in place of interstate highways.

  • "Some compare high-speed Internet to building the interstate highway system in the 1950s. It’s a tempting comparison, but imperfect.
  • In terms of transformative power, broadband is more akin to the advent of electricity. Both broadband and electricity are what some call “general purpose technologies” -- technologies that are a means to a great many ends, enabling innovations in a wide array of human endeavors.
  • Electricity reshaped the world -- extending day into night, kicking the Industrial Revolution into overdrive, and enabling the invention of a countless number of devices and equipment that today we can’t imagine being without.

Irresponsible Talk of Reversing Info Services Precedents

It is irresponsible for the FCC to consider self-creating new legal authority to impose net neutrality on ISPs by re-classifying currently unregulated information services as regulated telecom services (in the event that the D.C. Circuit Court of Appeals rules that the FCC does not have the legal authority to regulate the Internet in the FCC-Comcast case). 

First, claims of justifying such a hyper-regulatory potential FCC reclassification based on "the pro-competitive 1996 Telecommunications Act" is upside-down logic, given that the well-known purpose of that act was "To reduce regulation and promote competition...".  [bold added]

  • After over a decade of successful experience and legal precedents promoting competition by reducing monopoly-era regulation, it would be a big lift indeed to try and justify re-imposition of the monopoly-era regulation that the Congress and the FCC have spent so much time and effort reducing.     

    Second, if the Appeals Court overseeing the FCC concludes in the Comcast case that the FCC does not have the authority to regulate the Internet under current law, does the FCC really think that that same court won't see through, and overturn, an elaborate FCC political ruse to manufacture legal authority all by itself without new congressional authorization?

My comment submission to FCC's Open Internet NPRM

FOR IMMEDIATE RELEASE

Contact:  Scott Cleland

January 12, 2010

703-217-2407

 

NetCompetition.org Submits Comments on FCC Open Internet NPRM

“Preserving, not reversing, competition policy, best preserves the open Internet.”

 

 

First Amendment 2.0 Ratified by 3 FCC Commissioners? The Principle-less-ness of Net Neutrality

The foundation of American Democracy for over 200 years has been respect for the U.S. Constitution and the rule of law. The advent of the mainstream Internet in the 1990's created a new and exceptional medium for free expression, much as telephone, radio, movies, TV, faxes, dial-up, email, texting, etc. have created new technological mediums for free expression.

  • The argument that the Government must regulate broadband providers in order to preserve 200 year-old First Amendment rights is disingenuous, duplicitous, and dystopian.  

Current justifications for new net neutrality regulations to implement a "21st Century First Amendment" via three votes by un-elected FCC commissioners as net neutrality proponents like Marvin Ammori advocate, could not be a more radical assault on America's real institutions of democracy. 

 If net neutrality supporters really cared about   advancing American Constitutional Democracy, they would respect that the U.S. Constitution is designed to prevent Government tyranny of the people by creating powerful institutional checks and balances, a Bill of Rights, and definitive processes to change laws or amend the Constitution.

Critical Gaps in FCC’s Proposed Open Internet Regulations

Like the FCC’s National Broadband Plan task force identified seven critical gaps in the path to the future of universal broadband, the FCC should resolve six identified “critical gaps” in the FCC’s proposed Open Internet regulations before moving forward to regulate the Internet for the first time -- by dictating Internet access pricing, terms and conditions or dictating what services which businesses can and cannot offer on the Internet.

  • Here are six critical gaps in the FCC's proposed open Internet regulations:

 

Credibility Gap: The FCC isn’t "preserving," but changing the Internet by regulating it for the first time.

Kudos to ACI for its new book on "The Consequences of Net Neutrality Regulations"

I commend The American Consumer Institute for their excellent new book of scholar essays, “The Consequences of Net Neutrality Regulations on Broadband Investment and Consumer Welfare.”

  • It's refreshing and very useful to have a bipartisan collection of of 13 essays authored by 11 senior economists and public policy experts, both Republican and Democrat. 
    • "The book provides insight about consequences Net Neutrality regulations have on two economic concepts that affect broadband consumers: “price and demand” and “cost and supply.”

The net neutrality/open Internet debate needs more of this kind and quality of substantive professional analysis.

Debunking the Rewrite of Internet Privatization History

To help the neutralism movement de-privatize the Internet and transform broadband providers into quasi-public-utilities, some attempt to rewrite the long and very bipartisan history of Internet privatization as a partisan history, despite overwhelming evidence to the contrary. 

Is FCC Declaring 'Open Season' on Internet Freedom?

The piece below ran on BigGovernment.com today. (One-page version here.)

 

Is FCC Declaring 'Open Season' on Internet Freedom?

The FCC, in proposing to change the definition of an “open Internet” from competition-driven to government-driven is setting a very dangerous precedent, that it is acceptable for countries to preemptively regulate the Internet for what might happen in the future, even if they lack the legitimacy of constitutional or legal authority to do so, or even if there is the thinnest of justification or evidence to support it.

 

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Q&A One Pager Debunking Net Neutrality Myths