CAGW Reacts to FCC Chairman Tom Wheeler’s Net Neutrality Plans | Citizens Against Government Waste

CAGW Reacts to FCC Chairman Tom Wheeler’s Net Neutrality Plans

Press Release

For Immediate Release Contact: Leslie Paige 202-467-5300
February 4, 2015  


(Washington, D.C.) - Citizens Against Government Waste (CAGW) today reacted to the release of Federal Communications Commission Chairman Tom Wheeler’s proposal to regulate the Internet and his op-ed in Wired, which promotes using antiquated common carrier regulations under Title II of the Telecommunications Act of 1934 for the Internet.  In short, Chairman Wheeler plans to treat the Internet like a dial-up telephone, which will hinder innovation and raise costs.

The Communications Act of 1934 created the foundation for regulating the telephone industry through common carrier rules and interconnection rate schemes.  The law also established the Federal Communications Commission as the regulator body for the telecommunications industry.  As technology developed, amendments to the Act were adopted, the most recent of which was the Telecommunications Act of 1996.  Congress is currently working on modernizing the law, which is one of many reasons why the FCC should not act to promulgate regulations. 

The phenomenal success of everything associated with the Internet is that it operates in an open, free manner that encourages growth and innovation.  If Chairman Wheeler’s proposal is adopted, it will inhibit future technological advances by treating innovators in telecommunications and technology like plain old wireline telephone companies. 

Even though the Chairman’s plan calls for forbearing, or refraining, from imposing provisions of Title II that are not relevant to broadband services, such a decision is at the discretion of the FCC.  The plan at least relieves providers from contributing to the Universal Service fund and defers to the congressional moratorium on Internet taxes. 

However, some states are preparing to implement state fees on broadband services based on the FCC’s proposed reclassification, as noted by Vermont Telecommunications Director Jim Porter, who said that it would give the state “the ability to assess a universal service fee on broadband services.”  According to the Progressive Policy Institute, the changes being proposed by Chairman Wheeler could increase the average state and local fees imposed on wireline and wireless subscribers between $67 and $72 per year, along with an increase in federal fees of $17 per year.  This constitutes a $15 billion increase in new user fees to consumers.

It appears that Chairman Wheeler is using forbearance in an attempt to both mollify the strong objections to his proposed regulation of the Internet and give opponents of proposed reform legislation in Congress another excuse to object to such efforts.  Forbearance can be changed at any time, and is not an appropriate way to regulate any industry.

“Congress gave the FCC the authority to regulate the rules, not re-write the law through manipulation, forbearance and a flimsy analysis of court decisions,” said CAGW President Tom Schatz.  “It is unfortunate that Chairman Wheeler wants his agency to intrude further into Americans’ daily lives and interfere with the most successful component of the U.S. economy.  Once again, and typical of the Obama administration, ‘government knows best.’ As Congress considers legislation to modernize telecommunications laws, strong consideration should be given to whether the FCC is doing more harm than good and should be altered or eliminated altogether.  At the very least, a biannual reauthorization of the agency is in order so that it will be required to justify its existence on a regular basis.”

 Citizens Against Government Waste is the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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