Democracy & Technology Blog Net Testimony in Hoosierland

On Monday morning I testified before the Indiana Joint Committe on Regulatory Flexibility. Sexy, I know. I was joined by Ray Gifford and John Rutledge of the Progress and Freedom Foundation. Some 30 legislators listened as Rutledge expertly surveyed the global economic scene, with emphasis on energy, telecom, and Asian growth. I described the American technology scene and tried to show how a number of recent events — eBay’s purchase of voice-over-IP provider Skype, Google’s entry into VoIP and even wireless infrastructure, Yahoo!’s invasion of Hollywood, and the CableCos’ and TelCos’ invasions of each other’s businesses — make our already antiquated telecom laws and regulations more useless than ever. Ray Gifford then offered a cogent history of telecom law at the federal and state level and explained why state price controls should be abandoned, why universal service is a mess and must be reformed, and why statewide video franchising makes sense.

Several states have now taken the lead in telecom reform — Texas, Oklahoma, and Missouri, among them — and it appears Indiana, which attempted sound legislation in the 2005 session but barely failed, may now be on an exciting track.

In my testimony, I also critiqued new draft legislation emerging from Washington (the Barton bill) that could stifle this flood of new activity on the Net. Concepts like Net Neutrality, which could morph into a new, additional, deeply intrusive layer of FCC-enforced anti-trust are exactly the type of micromanagement the dynamic Net cannot withstand. The Barton bill also creates new definitions (“broadband video service provider”) that may not make sense a few years from now, let alone today. Do we really want to apply cable TV regulations created over a decade ago to the bountiful realm of Internet content? Rep. Barton’s and Sen. Ensign’s telecom reform bills do have their merits, and the hope is they can be simplified into slim deregulatory efforts.

The 1996 Telecom Act, which barely mentioned the Internet, can only fairly be judged as a disaster. Ten years later, in 2006, Congress may revise these laws. Let’s get it right this time. At least the ’96 Act didn’t regulate the Net, as some of today’s Washington efforts potentially would. We don’t want to look back in 2016, as China and India have just enjoyed another decade of pro-technology hyper-growth, and ask what those silly Americans were thinking.

-Bret Swanson

Bret Swanson

Bret Swanson is a Senior Fellow at Seattle's Discovery Institute, where he researches technology and economics and contributes to the Disco-Tech blog. He is currently writing a book on the abundance of the world economy, focusing on the Chinese boom and developing a new concept linking economics and information theory. Swanson writes frequently for the editorial page of The Wall Street Journal on topics ranging from broadband communications to monetary policy.