CAGW Letter to FCC Commissioners on Net Neutrality
January 13, 2010
by: Tom Schatz

Letters to Officials

Chairman Julius Genachowski
Commissioner Meredith Attwell Baker
Commissioner Mignon Clyburn
Commissioner Michael J. Copps
Commissioner Robert McDowell
Federal Communications Commission
445 12th Street, SW
Washington, DC 20554

January 13, 2010

Dear Chairman Genachowski and Commissioners:

Citizens Against Government Waste (CAGW) is writing this letter in response to the Federal Communications Commission’s (FCC) 09-191 request in the matter of preserving the open Internet broadband industry practices.  CAGW is a private, non-partisan, non-profit organization representing more than one million members and supporters nationwide.

The Internet has thrived in an open and competitive market to become a vital part of society and the global economy.  There has been incredible growth in both the speed and quality of the web, largely because the government has resisted onerous regulations.  According to the World Bank’s Development Indicators, Internet users as a percentage of U.S. population skyrocketed from 0.8 percent in 1990 to more than 72 percent in 2008. 

The FCC currently relies on four “guiding principles” for network managers that were established in a 2005 broadband policy statement.  These principles call for open access to legal content, choice of applications, use of various personal devices, and easily obtainable service plan information from competing providers. 

Although fierce competition in the marketplace has kept prices low and consumer choices plentiful, the FCC is proposing to codify the four principles and add two more to the list: a non-discrimination rule that would prohibit providers from selectively blocking or slowing web content or applications, and a transparency rule that would require providers to share network management practices with consumers.  Implementing these new rules would prohibit Internet providers from discriminating or acting as “gatekeepers” of web content. 

The notion of equality on the Internet may sound reasonable, but net neutrality is instead an attack on private sector business models.  The new rules would require providers to treat all web traffic equally and would prohibit them from restricting access to illegal content.  Providers would also be barred from slowing access to services or sites that consume excessive bandwidth or are offered by rivals.  This policy will ultimately inhibit broadband providers from offering expedited delivery speeds at higher prices, a choice that should be up to consumers.

Regulation of the Internet would prevent carriers from managing their own networks, including the ability to curtail viruses and other harmful content.  Forcing wireless carriers to open their networks to data-heavy applications like streaming video, graphic-rich games, and movies and music downloads, would only exacerbate the problem, slowing service and potentially causing other disruptions for customers.

Proponents of net neutrality want the online world to be forced “open” at the expense of successful Internet providers, but fail to recognize the many tradeoffs to “openness” such as increased spam, fewer privacy controls, slower service, and perhaps most importantly, decreased incentives for investment and innovation.  For example, in 2009 AT&T’s U.S. capital investments totaled $18 billion, the highest of any company.  The looming threat to limit what telecom companies can charge and to whom will undoubtedly discourage the large investments that have helped the Internet expand so rapidly.
 
The proposed regulations are an unnecessary government intrusion into the free market and attempt to solve a problem that does not exist.  The broadband industry is already a competitive market.  The government should not be regulating the pricing options that broadband service providers can charge.

The Internet exists primarily for the sharing of knowledge and ideas.  As America’s greatest renewable resource, ideas drive imagination and vibrancy in our economy.  Codifying and amending net neutrality rules will undoubtedly stifle Internet innovation, limit the dissemination of knowledge and ideas, and adversely affect economic growth.  CAGW strongly urges the FCC to tread lightly on the net neutrality issue and consider its significant impact on America’s flourishing broadband industry.
 
Sincerely,

Tom Schatz, President