Democracy and Technology Blog

Another FCC attempt to regulate broadband

Share
Facebook
Twitter
googleplus Google+
arroba Email

Another FCC attempt to regulate broadband

FCC Chairman Julius Genachowski outlined his game plan for asserting FCC control over broadband services this week in a speech entitled: “The Third Way: A Narrowly Tailored Broadband Framework.”
This is the FCC’s third major attempt to regulate broadband services, as my colleague Jim Harper pointed out in conversation today. I think it will also be the FCC’s third strike.
Genachowski is engaging in a futile attempt to slice and dice the Internet as a definitional matter for the purpose of expanding his agency’s regulatory grasp while hopefully containing many of the harmful consequences of regulatory overreach.
Regulating an essential component of the Internet as a “telecommunications service” would still amount to a form of Internet regulation in violation of a long-standing bipartisan consensus favoring competition and private investment over regulation and public subsidies. It is a quixotic quest.
For one thing, FCC jurisdiction isn’t necessary to protect consumers, because the Federal Trade Commission guards against deceptive business practices and applies the antitrust laws to protect competition.
Network neutrality regulation could also negatively impact jobs and investment. A study by the Brattle Group, for example, just concluded that more than 65,000 jobs could be put in jeopardy throughout the economy in 2011 as a result of net neutrality regulation, with the total impact growing to almost 1.5 million jobs affected by 2020.
The good news is broadband providers invested almost $60 billion in 2009 alone in broadband networks, according to one estimate. The bad news is regulation cannot compel private investment, but it can discourage it by creating uncertainty and risk for investors.
Even if confined to a limited portion of the Internet, there is no way to limit the potentially heavy-handed and costly consequences of regulation. The reality is regulation usually results in unintended consequences, which regulators subsequently try to fix with more and more regulation. No one can predict where it will lead.