Internet Regulations Unnecessary

Regulators recently announced they are injecting themselves into the Internet’s development by, among other things, requiring that tech and communications companies seek permission before turning out new Internet services and business models. In response, this week Internet providers – both small and large – sued to strike down the rules for transgressions of administrative and constitutional law.

Americans are waking up to this regulatory overreach.

For two decades, the hands-off policy of Congress and the Federal Communications Commission during the Clinton and Bush administrations let the Internet develop into the engine of innovation we all depend on. Unlike established industries like manufacturing, agriculture, transportation and finance, this liberating policy made Silicon Valley and tech companies unique, with no federal agency requiring compliance to industry-specific obligations. It appears, however, laissez faire for the Internet was too good to last, sacrificed for the amorphous principle of “net neutrality.”

Government may be slow, but it’s persistent. Purportedly to protect the Internet’s open nature, the FCC is importing many of its most intrusive rules to cudgel broadband and technology companies. Better known to the American public for its bumbling attempts to dole out fines for televised wardrobe malfunctions, the FCC has quickly transformed into a new front for partisan trench warfare, joining agencies like the IRS and EPA.

Though subject to competition and consumer protection laws, Internet companies are ostensibly protected from prescriptive rules, per the U.S. policy that Internet services should be “unfettered by federal and state regulation.” This policy recognizes that markets – even imperfect markets – are superior to government planning in fast-moving industries. In a legally fraught maneuver, the FCC is reversing policy in order to claim “Title II authority,” thereby subjecting Internet companies to regulations intended to rein in the old AT&T long-distance telephone monopoly.

This new framework was demanded mostly by an army of “clicktivists” led by a small group of academics and consumer groups who perpetually agitate for bureaucratic oversight of media to coerce it into operating “for the public interest.” These forces, with assistance from a few web companies and foundations, carried out a policy coup before many were aware of what was happening.

The FCC’s latest actions inject politics into an apolitical subject: broadband network architecture. Unlike the old AT&T monopoly network, the Internet is not a single entity; it comprises tens of thousands of daisy-chained and interconnected privately operated networks. Trillions of bits of data are transmitted daily through cable, copper, fiberglass wires and the airwaves to our computers, televisions and smartphones. Internet service providers connect us to these networks for a monthly fee and, every few years, upgrade their capacity and computing to keep up with demand for services like Netflix and Skype.

If courts don’t strike down these Title II rules, the FCC will have vast authority over commercial transactions in the well-functioning Internet marketplace. Among other powers, the FCC will have broad discretion to ban new broadband services it determines – after gathering input from self-interested firms and professional activists – are not “just and reasonable.”

Title II rules mean that many potential music, television, gaming and telemedicine services will be presumptively illegal. Further, the FCC will also prohibit new technologies and business models online if, in the FCC’s view, they “impact free expression” negatively. Though an imperfect analogy, the FCC’s actions have drawn comparisons to the much-reviled Fairness Doctrine, which was gutted in the 1980s for its chilling effect on controversial speech.

It’s tempting, in light of government propensity to control, to simply be grateful that the Internet was shielded from regulators for as long as it lasted. Nevertheless, many Americans are beginning to realize that regulators are going too far. Many favor net neutrality principles but support narrowly tailored rules to prevent marketplace abuses. They correctly perceive that Title II is a butcher cleaver when a scalpel would suffice.