Thursday, December 23, 2010

What is net neutrality?


Georgians by now realize that the fancy, technical names given by politicians to laws and policies are often misleading. The Democrats seem especially guilty of this tactic since so many of their ideas would be unpopular if the people knew their details. After all, if the people of Georgia and America knew that the Patient Protection and Affordable Care Act would actually drive up prices and lead to shortages of health insurance, it would have been even more unpopular than it already was.

Such is the case with net neutrality. If Georgians knew that it was going to result in more government regulation of the internet and higher costs to access the web, while at the same time discouraging investment and stifling innovation, they would have strongly opposed the policy. Instead, almost nobody noticed the bland-sounding policy.

The term “net neutrality” evokes images of protecting the internet from undue political or corporate influence, yet in reality the opposite is true. Net neutrality was a call from leftists groups for increased government regulation and oversight of the internet.

Writing in the Wall Street Journal, John Fund describes the backers of net neutrality. The concept began as a media reform campaign by Robert McChesney’s Free Press organization. McChesney wrote that “the battle over network neutrality is not to completely eliminate the telephone and cable companies… but the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.”

Fund goes on to describe how a confederation that included most of the same groups that created the “Astroturf” movement demanding campaign finance reform has pushed net neutrality. Campaign finance reform resulted in the McCain-Feingold law, which was ultimately ruled to be an unconstitutional limit on free speech. These leftist groups, including Free Press and the Pew Charitable Trusts, sponsored studies backing net neutrality. These studies were prominently cited in the FCC’s “National Broadband Plan.”

The FCC originally tried to impose net neutrality in a ruling against Comcast in August 2008. However, in April 2010, a federal appeals court in Washington, DC decided that Congress had not given the FCC legal authority to regulate the internet.

The following month, a bipartisan group of congressmen sent letters to FCC Chairman Julius Genachowski stating in no uncertain terms that his plans for net neutrality were a bad idea. A letter by seventy-four Democrats stated that it would “jeopardize jobs" and "should not be done without additional direction from Congress.” Thirty-seven Republicans wrote that Genachowski’s planned rules were “heavy-handed 19th century regulations" that are "inconceivable" and illegal.

In response, the FCC unilaterally decided to reinterpret its jurisdiction over telephones to include the authority to regulate the internet. This week’s vote to impose net neutrality rules in a party line vote among the FCC’s five-member board. Chairman Genachowski and two Democratic members of the board voted for net neutrality, while the two Republican members opposed it. The FCC essentially extended government control over the internet after being told by both Congress and the courts that it did not have that authority. President Obama appointed Chairman Genachowski and the FCC answers to the President.

What does net neutrality mean for you?

The new net neutrality regulations will prohibit internet service providers (ISPs) from blocking access to legal websites and allow the FCC to determine if ISPs are “unreasonable” in prioritizing internet traffic on its network.

However, there has been no history of companies blocking access to websites. This was a manufactured crisis (a la Rahm Emanuel) in order to justify increased regulation. In reality, ISPs have voluntarily refrained from blocking web access. In contrast, the federal government has been shutting down websites without due process.

The use of the word “unreasonable” is ambiguous. As Republican Commissioner Robert McDowell said, it is “perhaps the most litigated word in American history.” The wording leaves the enforcement of the regulations open to arbitrary interpretation. This means that, not only will there be legal challenges, but internet companies will be forced to lobby FCC and other government officials to gain approval for their business plans. As Woodrow Wilson said, “If the government is to tell big business men how to run their business, then don't you see that big business men have to get closer to the government even than they are now? Don't you see that they must capture the government, in order not to be restrained too much by it?”

Additionally, the new rules say that ISPs can charge more to customers who use more bandwidth. This means that, where most internet users now pay roughly the same, if you watch a lot of online videos or movies or play memory-intensive games, you might have to pay more for your internet access in the near future.

Finally, the new rules will likely inhibit investment and innovation. New regulations will likely make it harder for new companies to enter the web marketplace. In the past few years, new internet companies have risen from inception to multi-billion dollar firms in a few short years. Google and Facebook are both ubiquitous but less than fifteen years old. New hardware, software and websites are being introduced constantly. Government interference can only slow and hamper this process.

In summary, everyone is unhappy with the FCC’s net neutrality rules. Leftists who fear corporations and embrace government control want harsher rules. Conservatives and libertarians who believe in limited government feel that the FCC should stay out of the internet, especially since Congress has not extended the agency authority to regulate it. There will almost certainly be legal challenges due the vague and arbitrary nature of the law. Equally certain is that the Republicans will seek to rein in President Obama and his rogue agency when they take control of the House of Representatives next year.


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