The Federal Communication Commission and the Obama administration continue to tout net neutrality as a populist answer to corporate favoritism online. Critics of the plan, however, are increasingly worried about the FCC’s lack of transparency in crafting the rules.
At worst, some say, the current net neutrality plan is a massive government power grab of the one place where ideas are spread with limited meddling by gatekeepers; at best, it’s a solution in search of a problem destined to stifle technological innovation and online competiveness.
With the FCC expected to approve the net neutrality rules at a Feb. 26 hearing, Congressional Republicans are scrambling to hold hearings to investigate the rule-making process. Currently, lawmakers in both chambers are actively seeking information whether the White House pressured the FCC on the rules.
Since the agency has released only limited information about its 322-page Internet proposal, the lawmakers have little to go on in predicting the extent to which the bureaucrats want to regulate online activities. But based on the complaints of FCC commissioner Ajit Pai, a Republican, the government is looking to gain “broad and unprecedented discretion to micro-manage the Internet.”
“It is worse than I imagined,” Pai told reporters Tuesday.
The dissenting commissioner also claimed that the FCC rules will likely also lead to billions of dollars in new taxes.
Former Democratic Congressman Rick Boucher of Virginia made a similar argument in a Wednesday column for The Wall Street Journal. Boucher, an honorary chairman of the Internet Innovation Alliance, backed up his argument with a study of how a similar Internet regulatory scheme imposed in Europe has limited broadband access to populations and increased costs by stifling provider incentive.
Consider capital investment, without which broadband networks do not exist and cannot be modernized. Fixed-broadband operators in the U.S. invested $137 billion in 2011 and 2012, more than four times Europe’s $31 billion over the same time period. U.S. mobile operators, at $55 billion, invested twice as much as their European counterparts’ $29 billion. Even when the comparison is made as a percentage of industry revenue, the U.S. investment advantage persists.
Europe’s “wholesale-access” regulatory regime, under which fixed operators must make their networks available to competitors at a regulated price, was ostensibly designed to promote competition. Yet in Europe, powerful incumbent carriers hold 65% of the local telephone market, while in the U.S. 59% of the local telephone market is served by new competitors. More than 90% of U.S. households can choose from among 10 or more providers.
European officials eventually learned from their mistakes and opted in 2013 to take steps to scale back regulatory burdens on Internet providers.
Boucher believes that makes it a particularly bad time for U.S. officials to be considering similar Internet regulations because they could “send capital overseas to a more welcoming investment environment.”
Other critics of the net neutrality plan have focused on the inconvenience consumers could face if the government becomes more heavily involved in their day-to-day online activities.
A group called Protect Internet Freedom is releasing comical videos detailing how future Internet users could find themselves burdened by confusing new Internet taxes and regulations on their personal computers and devices.
On its website the group argues that the current proposal’s basis in Title II of the antiquated 1934 Communications Act will lead to what basically amounts to a massive middle-class tax increase.
“The various state and local rules alone could add an additional $84 or more to your household’s yearly Internet bill for each wired and wireless Internet account you have. When you add it up, Title II classification will likely cost users $15 billion in new fees.”
Most maddening to many critics is that it’s not net neutrality they oppose, it’s making the Internet a public utility.
And the FCC, Broucher noted, can “use its existing authority to adopt strong network-neutrality protections without reclassifying broadband as a public utility.”
So why would the FCC go so far? If congressional Republicans are able to dig up any communications between the agency and the White House, Americans may get the full answer.
In public, Obama claims it’s about making the Internet operate more smoothly for the people.
“You know what it feels like when you don’t have a good Internet connection,” he said back in January. “Everything is buffering, you try to download a video and you’ve got that little circle thing that goes round and round, it’s really aggravating.”
Of course, it’s probably safe to assume the president has grander ambitions for Internet control given the headaches it has caused for the White House during his tenure.