The Internet has always been a free and open environment in which human communication can thrive and new businesses can grow. It is now one of our most important tools for economic growth and innovation, and this advancement happened with very little government interference. However, storm clouds are gathering. President Barack Obama has instructed the Federal Communications Commission (FCC) to regulate the Internet under rules originally created for phone companies in the 1930s. Proponents claim these sweeping new regulations are needed in order to preserve the free and open Internet we already have. However, their case for doing this is very weak.
The demand for new regulations springs from a doctrine called “net neutrality.” This is the idea that every piece of data on the Internet must be treated equally in terms of how and at what speed it moves, with no regard to the purpose of the data. This model was fine when the Internet and World Wide Web were young, but it no longer fits the way we use the Internet. We now transmit many different kinds of information, from e-mail to music to HD video, and it is clearly appropriate to treat these various types of data differently in order to meet the needs of the consumer.
Proponents of net neutrality fear that Internet service providers will set up “fast lanes and slow lanes,” charging more for faster service. Perhaps you’re already paying a premium for higher speed, but that only applies to the Internet connection to your house. The fear is that if companies such Comcast begin to control data flows in a similar way, your service could suffer.
Then what keeps providers from doing this today? In a word, competition. Apart from monopolies created and preserved by local governments, any firm that dares to disadvantage the Internet consumer runs the risk of losing business to smarter and more efficient firms. No costly regulations are needed, just simple market economics. The primary role of government on the Internet should be to enforce contracts and remove barriers to competition, not to micromanage voluntary and lawful transactions among market participants.
The disadvantages of letting Washington D.C. take over the Internet? Higher bills, as firms must pass along to their customers the costs of complying with regulations. The proposed regulations also empower the FCC to control pricing and levy taxes on the Internet, resulting not only in higher bills but in poorer service as price controls inevitably cause shortages. We’ll see a slowdown in innovation once all important decisions are forced through Washington’s lawyer-powered waste machine, making investors reluctant to fund new Internet-based ventures.
If real problems exist that can only be handled through government action, narrow legislation is called for, not sweeping new powers for hungry regulators. As we’ve seen in health care, heavy-handed government control is the enemy of freedom, vitality and innovation. Contact your representatives in Washington and let them know where you stand on this issue.