President Obama’s call this week to regulate the Internet as a public utility is like pushing to replace the engine of a car that runs perfectly well. The U.S. data sector — including wired and wireless broadband — is the envy of the world, administering a powerful boost to consumer welfare, generating high-paying jobs and encouraging tens of billions of dollars in corporate investment. Indeed, the prices of data-related goods and services have dropped by almost 20 percent since 2007.
Putting the Federal Communications Commission in charge of regulating broadband rates and micromanaging Web services, as the president proposes, would slow innovation and raise costs. It would be bad news for the economy. It would also be a serious misstep for the Democratic Party, marking a retreat from market-based, pro-competition policies pioneered by President Bill Clinton in the 1990s.
The issue here is how best to ensure an open Internet, in which big and small companies alike have unfettered access to customers. After the courts threw out the old open Internet rules in January, virtually all concerned parties agreed the United States needed strong regulations to prevent blocking or discrimination online, to require real transparency for network-management policies by Internet service providers and to ban paid prioritization that could divide the Internet into fast-lane “haves” and slow-lane “have-nots.”
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