Friday, May 09, 2014

Time to "Pan" Proposals for More Internet Regulation

by Deborah Taylor Tate 

Consumer advocacy groups and even the media are causing quite a racket over the net neutrality debate. Some may think that banging pots and pans and shouting arguments to reclassify broadband as a telecommunications service is a sound policymaking approach. But the old saying “the empty vessel makes the loudest sound” comes to mind. Distractions may abound, but it is important for Chairman Wheeler’s reasoning to remain grounded in the law, exercise regulatory humility, and resist calls to impose burdensome “Open Internet” rules or Title II regulations on broadband services.   

In writing to my state PUC colleagues in my 2010 piece, Don't Stifle Internet Services With More Regulation, I noted that deregulatory Internet policy is not new; it still the law of the land. Congress ably crafted the 1996 Telecommunications Act and declared that the policy of the United States was "to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by federal or state regulation." Over 240 members of Congress from both sides of the aisle reiterated that policy, when the House voted to reject the FCC’s proposed Internet “neutrality” rules regulating Internet providers in early 2011.

In May 2012, I wrote that the FCC had no business, and no legal authority for, regulating the economic side of network management. Indeed, special access—paying more for certain specific services for a negotiated price—was an acceptable principle even in the highly regulated Title II wireline telephone regime. Thus, companies should be able to differentiate their products, service lines, marketing techniques and yes, even pricing, without interference by the pricing police. 

In another piece from July 2009, I also recognized that it was not fair for a grandmother who might send a few emails or look at some baby pictures online every few days to pay the same as a 24/7 gamer who uses many times the amount of broadband. What is fair is to pay for what you use.

However, even after two D.C. Circuit decisions, and a Democrat FCC Chairman recognizing that indeed traditional public utility-style regulation is not warranted, there is still a renewed call to bring out the "pots and pans” in favor of Title II reclassification. Free State Foundation President Randolph May offered two of the many reasons why adoption of net neutrality or Title II reclassification is unwarranted in his May 9 blog. We have long moved past the plain old telephone service, or "POTS," regime and should "pan" this suggestion.                                               

With today's continued explosion of innovation, over a trillion dollars of investment in the digital economy, and more competition occurring across multiple platforms everyday, why would we even consider a different direction?