The FCC’s Threat to Internet Freedom
‘Net neutrality’ sounds nice, but the
Web is working fine now. The new rules will inhibit investment, deter
innovation and create a billable-hours bonanza for lawyers.
Tomorrow morning the
Federal Communications Commission (FCC) will mark the winter solstice by taking
an unprecedented step to expand government’s reach into the Internet by
attempting to regulate its inner workings. In doing so, the agency will
circumvent Congress and disregard a recent court ruling.
How did the FCC get here?
For years, proponents of so-called
“net neutrality” have been calling for strong regulation of broadband
“on-ramps” to the Internet, like those provided by your local cable
or phone companies. Rules are needed, the argument goes, to ensure that the
Internet remains open and free, and to discourage broadband providers from
thwarting consumer demand. That sounds good if you say it fast.
Nothing is broken that needs fixing,
however. 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. Ample laws to
protect consumers already exist. 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.
Analysts and broadband
companies of all sizes have told the FCC that new rules are likely to have the
perverse effect of inhibiting capital investment, deterring innovation, raising
operating costs, and ultimately increasing consumer prices. Others maintain
that the new rules will kill jobs. By moving forward with Internet rules
anyway, the FCC is not living up to its promise of being “data
driven” in its pursuit of mandates—i.e., listening to the needs of the
It wasn’t long ago that
bipartisan and international consensus centered on insulating the Internet from
regulation. This policy was a bright hallmark of the Clinton administration,
which oversaw the Internet’s privatization. Over time, however, the call for
more Internet regulation became imbedded into a 2008 presidential campaign
promise by then-Sen. Barack Obama. So here we are.
Last year, FCC Chairman
Julius Genachowski started to fulfill this promise by proposing rules using a
legal theory from an earlier commission decision (from which I had dissented in
2008) that was under court review. So confident were they in their case, FCC
lawyers told the federal court of appeals in Washington, D.C., that their
theory gave the agency the authority to regulate broadband rates, even though
Congress has never given the FCC the power to regulate the Internet. FCC
leaders seemed caught off guard by the extent of the court’s April 6 rebuke of
the commission’s regulatory overreach.
In May, the FCC leadership
floated the idea of deeming complex and dynamic Internet services equivalent to
old-fashioned monopoly phone services, thereby triggering price-and-terms
regulations that originated in the 1880s. The announcement produced what has
become a rare event in Washington: A large, bipartisan majority of Congress
agreeing on something. More than 300 members of Congress, including 86
Democrats, contacted the FCC to implore it to stop pursuing Internet regulation
and to defer to Capitol Hill.
Facing a powerful
congressional backlash, the FCC temporarily changed tack and convened
negotiations over the summer with a select group of industry representatives
and proponents of Internet regulation. Curiously, the commission abruptly
dissolved the talks after Google and Verizon, former Internet-policy rivals,
announced their own side agreement for a legislative blueprint. Yes, the effort
to reach consensus was derailed by . . . consensus.
After a long August silence, it
appeared that the FCC would defer to Congress after all. Agency officials began
working with House Energy and Commerce Committee Chairman Henry Waxman on a
draft bill codifying network management rules. No Republican members endorsed
the measure. Later, proponents abandoned the congressional effort to regulate
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Still feeling quixotic
pressure to fight an imaginary problem, the FCC leadership this fall pushed a
small group of hand-picked industry players toward a “choice” between
a bad option (broad regulation already struck down in April by the D.C. federal
appeals court) or a worse option (phone monopoly-style regulation).
Experiencing more coercion than consensus or compromise, a smaller industry
group on Dec. 1 gave qualified support for the bad option. The FCC’s action
will spark a billable-hours bonanza as lawyers litigate the meaning of
“reasonable” network management for years to come. How’s that for
To date, the FCC hasn’t
ruled out increasing its power further by using the phone monopoly laws,
directly or indirectly regulating rates someday, or expanding its reach deeper
into mobile broadband services. The most expansive regulatory regimes
frequently started out modest and innocuous before incrementally growing into
On this winter solstice, we
will witness jaw-dropping interventionist chutzpah as the FCC bypasses branches
of our government in the dogged pursuit of needless and harmful regulation. The
darkest day of the year may end up marking the beginning of a long winter’s
night for Internet freedom.
Mr. McDowell is a Republican commissioner of the Federal