CAGW Tells FCC: We Refuse to Stay Neutral
On January 13, 2010, Citizens Against Government Waste (CAGW) filed comments urging the Federal Communications Commission (FCC) to tread lightly on the net neutrality issue and consider its significant impact on America’s flourishing broadband industry. CAGW filed a second letter on April 7, 2010 reaffirming its opposition to the proposed net neutrality regulations and urging the FCC to steer clear of a reclassification of broadband under Title II of the Communications Act.
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 the U.S. population skyrocketed from 0.8 percent in 1990 to more than 72 percent in 2008. Clearly, the light regulatory model adopted in the 1990s continues to work as hundreds of millions of Americans utilize high-speed broadband.
Although fierce competition in the marketplace has kept prices low and consumer choices plentiful, the FCC apparently still plans to forge ahead with implementing a non-discrimination rule which would prohibit broadband providers from selectively blocking or slowing web content or applications, and a transparency rule, which would require providers to share network management practices with consumers. Employing these new rules would prohibit Internet providers from acting as “gatekeepers” of web content.
The notion of equality on the Internet may sound reasonable, but net neutrality is actually an attack on private-sector business models. The FCC’s new rules, if adopted, 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, an option that should be made available to consumers.
In 2009, Comcast was censured by the FCC for violating the agency’s net neutrality principles when the company slowed traffic for some subscribers who were downloading big files that were clogging its network. Comcast defended its case in court, claiming that providers should be allowed to maintain their networks as necessary to ensure quality service for their customers. On April 6, 2010, the U.S. Court of Appeals for the District of Columbia ruled that the FCC lacked the authority to require Comcast to treat all Internet traffic equally on its network.
This verdict should be a wake-up call to the FCC that mandating these stringent net neutrality rules is an overreach of the agency’s authority and any further efforts to impose similar policies will undoubtedly be met with rigorous legal challenges.
Proponents of net neutrality want to force the online world “open” at the expense of successful Internet providers. Legal issues aside, net neutrality supporters fail to recognize the many trade-offs to “openness,” such as increased spam, fewer privacy controls, and slower service. Regulation of the Internet would prevent Internet service providers from managing their own networks, including the ability to curtail viruses and other harmful content. Forcing wireless broadband providers to expose their networks to data-heavy applications like streaming video, graphic-rich games, and movies and music downloads, would slow service and potentially cause other disruptions for customers.
Perhaps most importantly, regulating the Internet would decrease incentives for investment and innovation. In 2009, AT&T’s U.S. capital investments totaled $18 billion, the highest of any company. The looming threat of limiting what telecom companies can charge and to whom will undoubtedly discourage the large investments that have helped the Internet expand so rapidly.
In light of jurisdictional questions and pending legal challenges, net neutrality proponents are calling for the FCC to reclassify broadband as a Title II service, imposing landline-style regulations on Internet providers that could include price regulation, service quality controls, and technological mandates. However, Title II classification would be counterproductive. The non-discrimination requirements applicable to Title II services would deny providers the flexibility to enter into voluntary business agreements to help recover the costs of building next-generation networks. Instead, these additional costs will be forced onto consumers, ultimately discouraging broadband usage and expansion.
Net neutrality proponents are desperately trying to justify an unnecessary government intrusion into the free market and attempting to solve a problem that does not exist. The broadband industry is already a competitive market, and the FCC’s interference will only stifle Internet innovation, limit the dissemination of knowledge and ideas, and adversely affect economic growth. CAGW hopes the commission will reconsider its regulatory approach and instead facilitate the competitive market that has been so vital to the success of the Internet.
— Erica Gordon
