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Ehrlich: The Wrong Way to Enact The Wrong Policy — The FCC’s No Good, Very Bad Day

By / 2.26.2015

“This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech,” said Federal Communications Commission Chair Tom Wheeler, whereupon he cast the deciding vote for the most far-reaching plan ever developed to regulate the Internet.  Let’s hope he isn’t in charge of the First Amendment, too.

As a veteran of the Clinton Administration, whose policy of light regulation set the stage for today’s burgeoning Internet, Wheeler’s decision is a disappointment, to say the least. This Administration – an administration that in almost every other aspect I support – is shackling the Internet in a regulatory straitjacket designed for the monopoly phone system eight decades ago in order to implement “net neutrality.”  It isn’t going to be a very good fit.

Neutrality is the idea doctrine that everything on the Internet should travel at the same speed, whether it’s a high-definition concert or video game, a signal from a remote heart monitor, an email to Aunt Tilly, or a video of a cat playing the xylophone.  Advocates prefer this “one size fits all” approach to letting the market decide how price and quality should be lined up, much the same way Sears does when it offers the consumer “good,” “better,” and “best.”

But advocates – often paid by the big Internet sites who like the Internet just like it is, thanks – have conflated this issue and used language as surreal as Wheeler’s, claiming this market-based process is equivalent to letting service providers throttle or impede the traffic they don’t like, or asserting that “priority” service will kill the innovative Internet, as if first class travel killed air travel or Priority Mail ended daily delivery to the home.

But it’s one thing to implement a mistaken policy.  It’s even worse to do so in a mistaken way.  Right now, as we speak, there is a bipartisan effort underway in the Congress that would enact the core protections of “neutrality,” but would do so by statute, period, full stop, as opposed to the long and tortuous road today’s decision will find itself on when it is challenged (and probably overturned) in the Courts.

The difference is important.  Aside from eliminating the possibility of legal challenge, The Congressional route would eliminate the regulatory baggage that today’s “reclassification” potentially allows.  For example, the FCC can force a provider of a phone-like service to offer their infrastructure to competitors at government-reviewed prices, and can even regulate prices generally.  Chairman Wheeler says the FCC will “forebear” these extreme regulatory prerogatives, but if he’s serious about that, then why not embrace a Congressional law that makes that clear?

What I fear, and fear greatly, that the advocates for “reclassifying” the Internet as a phone-like service really want more than “net neutrality” – they want the Internet to be a public utility for all purposes.  After all, they might argue – and some have, calling on us to emulate failed public-sector Internets in places like Australia – the Internet is just so damned important that it needs to be under public control.

Yes, the Internet is important.  So is food, but we let farmers grow it.  And the Internet is not at all like public utilities we’ve known, like electricity and the old phone system.  The Internet is not a series of “dumb pipes” that blindly carry content the way the phone system was a “dumb system” that just closed circuits or “dumb wires” carried electricity.  It’s a complex system that requires management and that doesn’t tolerate “busy signals” or “brown outs” if there’s overload.

But more importantly, unlike electricity or phones, there are many ways to provide broadband connectivity in the market today.  Virtually every household in America now can receive broadband from three or four sources – from cable systems, from fiber or, when fiber isn’t there, from ever-improving DSL over the old phone lines, from mobile sources (in which we are the world’s leader), or from satellite, often the last alternative, but usually an acceptable one.

What the “public utility” view really argues is that the government should pick one of these, or some combination of these, to meet our broadband needs rather than letting this competition play itself out, which is something like deciding the winner of a ballgame in the middle of the second inning.  It’s this very “platform competition” that has allowed the U.S. to vault past most of our industrialized competitors, certainly those that don’t crowd their populations into cramped apartment blocks that are cheap to wire.  Is that what we, as Democrats, really want?

There’s still time to adopt a legislative compromise, achieve the “neutrality” objective, and put the issue to bed for good.  And if the making of sound policy doesn’t move my Democratic friends, consider this:  A future Republican President is elected and announces that the FCC will change course and go back to the framework first laid out by President Clinton.  Without a statute in place, there is nothing to prevent President Jeb, Rand, Ben, or whomever from putting net neutrality on the shelf and leaving the Internet without even the most basic consumer protections most would agree are necessary.

And during the debates leading up to that election, President Rick or Rick or Carly will look over at Secretary Clinton and ask if the Clinton Administration made a mistake when it championed the 1996 Telecommunications Act and brought over a trillion dollars of investment in to build the Internet.

If good policy doesn’t move you to accept the legislative solution, perhaps that unfortunate political outcome will.