Kelly William Cobb
FCC Sides with Neo-Marxists and Continues Internet Takeover
This week, the Federal Communications Commission chose to end discussions aimed at finding a compromise on how and whether to regulate the Internet. In doing so, the FCC is solidifying it’s alliance with neo-Marxist media reform groups to place 1930’s era regulations on top of our modern day broadband Internet.
The FCC facilitated the talks between anti-regulation Internet service providers and pro-“Net Neutrality” websites, who want the Commission to establish rules for managing Internet data traffic. However, as discussions evolved over the past months, the FCC continued its infamous “Title II” proceedings, which would be used to both enact Net Neutrality under arcane laws and open the door to numerous other regulations.
As soon as the talks appeared to become fruitful (with both sides coming to some agreement), the neo-Marxists who have the ear of FCC Chairman Genachowski balked. “It is the end of the Internet as we know it,” whined Josh Silver of Free Press, decrying the fact that private Internet companies were reaching agreement on their most contentious policy issue. Then, almost on a dime, the FCC halted the discussions, somehow blaming it on select parties for reportedly reaching a deal on one way to quickly deliver content.
The truth is the FCC is held hostage by the neo-Marxists at Free Press, Public Knowledge, and Media Access Project, for whom regulating the Internet is not about how companies should manage Internet traffic. For these groups, its about giving government the ability to turn the Internet into a de facto public utility with the authority to set prices, monitor content, and establish other regulations.
These organizations also appear to serve as the FCC’s public relations offices. Suspiciously, this situation mirrors one in May when the FCC was reportedly backing down from enacting Net Neutrality. After Free Press began a campaign to manufacture public support, the FCC announced its heavy regulatory Title II proposal two days later. It is no coincidence that Chairman Genachowski’s press secretary is the former communications director of Free Press.
Now that the FCC has backed away from finding consensus on regulation, expect for the Commission’s Title II Internet takeover scheme to continue unabated. And expect for Free Press, Public Knowledge, and others to continue pulling the FCC further and further to the left.
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Michiganders: Rick Snyder is Open to Raising Taxes
Ahead of tomorrow's primary in Michigan, Republican gubernatorial candidates Rick Snyder and Sen. Tom George (R-Kalamazoo) are joined by Democrats Virg Bernero and Rep. Andy Dillon (D-Redford) in refusing to sign the Taxpayer Protection Pledge. The Taxpayer Protection Pledge is a commitment to constituents to “oppose and veto any and all tax increases.”
In contrast, Attorney General Mike Cox, Sheriff Mike Bouchard, and Rep. Pete Hoekstra have all ruled out tax increases by signing the Pledge. They are joined by 71 candidates for the State House of Representatives and 28 candidates for State Senate.
Worse, when asked if he would sign, Rick Snyder called the Pledge “kind of a gimmick.” In response, ATR president Grover Norquist made the following statement:
Rick Snyder called a promise to veto tax increases a ‘gimmick,’ but signing the Taxpayer Protection Pledge is an action that will provide Michigan residents and businesses with certainty that the state is no longer in the business of raiding your wallet. The simple fact is that Lansing’s tax and spending addiction has contributed to Michigan’s single-state recession. Snyder is leaving the door open to tax increases that will further this trend.
I commend Mike Cox, Mike Bouchard, and Pete Hoekstra for signing the Pledge. These candidates understand that the first step to bringing Michigan’s economy back is to stop Lansing’s tax and spending addiction. Tomorrow’s primary voters have a clear choice between two types of candidates: those who are leaving the door open to the tax increases that have been common in Michigan over the last decade, or those who have Pledged to oppose all tax increases, taking tax hikes completely off the table.
Google's Government Conundrum
In a free-market system, it is not the role of government to pick winners and losers in the marketplace. Yet, today Google finds itself pushing for heavy government regulation of its competitors, while simultaneously lobbying to prevent regulations on itself.
On the one front, Google is heading a major coalition lobbying for so-called "Net Neutrality" rules to regulate the Internet for the first time in history. The effort would essentially turn private Internet service providers (ISPs) into public utilities, by giving the Federal Communications Commission vague authority to dictate how ISPs manage their networks that comprise the Internet. A win would solidify Google’s powerful place in the market while undercutting ISPs; it would give Google permission to continue “free-riding” across ISPs networks with the government’s blessing.
Yet, Google now finds itself in the unusual position of fighting back against the government on two fronts. First, Google is pushing back against the Federal Trade Commission’s absurd project on the “Reinvention of Journalism.” A draft paper from the FTC last month suggested $35 billion in higher taxes to expand public media and undercut private news outlets. Amidst this proposal was a tax on news aggregator websites, such as Google News and the Drudge Report. Google fired back with a letter to the FTC stating: “Regulatory proposals that undermine the functioning of healthy marketplaces and stall the pace of change are not the solution.” If that’s Google’s principled position, then they should probably abandon their push to regulate the Internet.
Additionally, last week a group of 38 state Attorneys General began a joint investigation into how Google’s Street View cars collected personal information from unsecured wireless networks. Though it has yet to be shown if Google actually violated the law, a letter from the AGs contains detailed and biting questions. It has also sparked threat of regulation from Members of Congress concerned about possible privacy violations.
Worse for Google, their strongest non-business ally in the Net Neutrality debate is the neo-Marxist organization Free Press, who views Net Neutrality as “the tip of the iceberg” that merely opens the door to other radical regulations. Free Press founder Robert McChesney has gone so far to state: “there is no real answer but to remove brick by brick the capitalist system itself, rebuilding the entire society on socialist principles.” Google has found a partner to help enact Net Neutrality regulations, but soon may find its chickens coming home to roost. For example, the proposal by the FTC to tax Google News was adopted directly from recommendations by Free Press’s McChesney.
These episodes should remind Google that government and radical progressive groups are less a friend than a foe; that their grand plans for the nation also involve telling you what your grand plans are. Given the close-knit ties between the FCC and Free Press (e.g., the FCC chairman’s press secretary is the former communications director at Free Press), the threat of regulation beyond Google’s desire is very real.
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FCC's Report on Broadband Internet "is Not Reasonable and Timely"
Today, 95% of all Americans have access to at least 4 Mbps broadband Internet – something unheard of a decade ago. 59% of Americans use a laptop or mobile phone with a wireless connection to get online. Well over three-quarters of Americans have access to 3G wireless Internet, with a choice of multiple providers. And amidst this development, the price to access the Internet has dropped by 23 percent since 2004, while overall consumer prices went up.
Yet, this week the Federal Communications Commission issued its Sixth Annual Broadband Deployment Report (PDF), concluding all of this success “is not reasonable and timely.” By what measurement? Since 2005, telecommunications and IT companies have invested $576 billion into building out infrastructure, which now accounts for almost half of non-infrastructure investment. Since 2003, Internet service providers have dropped $27 billion per year into expanding and improving networks. I'd say that's a reasonable amount of investment.
The FCC’s latest broadband report is hollow rhetoric. It was manufactured for the sole use of bashing Internet service providers simply to justify the Commission’s unnecessary and burdensome scheme to regulate the Internet. It predictably follows the same strategy as the FCC’s wireless report from May that is being used to justify further regulations.
Instead of changing the facts (many of which the FCC helpfully supplies), FCC Chairman Julius Genachowski simply ignored them. Though, the Commission completely changed the metric for defining “high-speed Internet” to a minimum of 4 Mbps speed (which, George Ou points out, is almost twice the necessary speed to stream 720P video content online). Further, only in a footnote and the two dissenting statements of Commissioners Robert McDowell and Meredith Attwell Baker does it mention the fact that over 95% of Americans already have 4 Mbps broadband Internet access. This is something the Commission highlighted just months ago in their National Broadband Plan, but suspiciously ignored here.
Instead, I would argue the FCC’s conclusion “is not reasonable and timely.” The Commission ignored multiple indicators that broadband Internet speeds, access, adoption, and investment are on the rise. The report was released in the middle of the FCC’s proceeding to impose onerous regulations on the Internet and was clearly intended to justify their baseless policy goals. As we’ve mentioned before (here, here, and here), these regulations will have a disastrous impact on broadband expansion – something that certainly won’t help the remaining 5% of American households without high-speed broadband connect to the Internet any faster. And if they don’t get online, expect the FCC to double-down with misguided reports and regulations to "fix" that too.
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Dodd-Frank Financial Regulation Bill is a Massive Taxpayer Funded Bailout. Period.
During today’s signing of the Dodd-Frank financial regulation bill, President Obama proclaimed:
"There will be no more taxpayer-funded bailouts. Period."
Follow the bill’s signing, Grover Norquist, president of Americans for Tax Reform, released the following statement:
“The Dodd-Frank financial regulation bill is one big taxpayer funded bailout. Period. It is an utter lie for Obama to claim that the bill ends taxpayer funded bailouts when it allows the Treasury to continue bailing out any financial institution they deem ‘unstable.’ Even worse, the Democrats have given Treasury the go-ahead to completely take over, restructure, and liquidate any firm – even ones that aren’t begging at the trough for taxpayer-funded support.
“The Dodd-Frank financial ‘reform’ bill contains costly and colossal new regulations and bureaucracies cloaked around empty rhetoric about consumer and taxpayer protections. This bill burdens banks with billions of dollars in new fees and restrictions that will be passed onto individuals and small businesses in the midst of an economic downturn. Further, in this Congress’s Orwellian tradition, the bill creates a massive new government agency with the power to monitor virtually any American citizen's or business’s bank accounts.
“This ‘reform’ does nothing to get at the root cause of financial crisis. Instead of ending failed government slush funds like Fannie Mae and Freddie Mac, the Democrats have targeted and demonized the very Wall Street firms they look forward to continuing to bail out in the future. Thanks to the Dodd-Frank bill, Americans can look forward to another financial crisis brought about by excessive regulations and fees that stall investment and the continuation of failed government programs that helped get us into this mess.”
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Sen. DeMint Offers Bill to Halt FCC's Internet Regulation Scheme
Amidst the Federal Communications Commission’s overzealous drive to regulate the Internet, Senator Jim DeMint (R-S.C.) today introduced a bill that would curb the ability for the FCC to apply regulations at whim. The Freedom for Consumer Choice Act (or FCC Act) requires the FCC to provide clear evidence of a market failure before any regulations on the Internet could be enacted. It also requires the Commission to review the potential costs of its actions (which we’ve partially highlighted here, here, and here) and to revisit regulations every five years to ensure they are still relevant.
Sen. DeMint's legislation rightly questions the FCC's Internet regulation scheme, while simultaneously calling the Commission out for failing to justify the need for such regulations. It already has the support of Sens. Hatch (R-Utah), Ensign (R-Nev.), Thune (R-S.D.), Coburn (R-Okla.), Cornyn (R-Texas), and Sessions (R-Ala.). From ATR’s letter of support to the U.S. Senate:
Today, over 95 percent of Americans have access to high-speed broadband by the FCC’s own admission. The Internet is universally regarded as free, open, and flourishing. It has become a vital backbone in the American economy, outpacing the overall economy nearly four to one. The telecommunications and IT industries are a source of hundreds of billions in U.S. investment – nearly half of all non-structural investment – and have created hundreds of thousands of jobs. Yet, the FCC’s onerous regulatory ambitions will severely imperil this and future innovation, investment, and job growth.
To date, a vast bipartisan majority in Congress have expressed concern that the FCC’s regulatory proposal will be detrimental to broadband expansion and adoption. U.S. courts have ruled that the Internet should remain unregulated and that the FCC is attempting to “shatter” the bounds of its authority. Minority groups, family groups, labor unions, and limited government activists alike are part of the public’s overwhelming chorus of opposition to the Commission’s plan.
To see the entire letter, click here.
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ATR Files Comments Against FCC's Internet Regulation Scheme
Yesterday, Americans for Tax Reform’s Digital Liberty Project filed comments with the Federal Communications Commission in strong opposition to their attempt to regulate the Internet for the first time in history. Under the FCC’s plan, the Internet would be subject to onerous regulations under Title II of the Communications Act that were designed in the 1930s for monopoly telephone carriers – 60 years before the Internet was even conceived.
Our comments focused on the many effects these regulations would have and the vast bipartisan opposition it faces, including:
- The regulations could result in as many as 500,000 to 700,000 jobs lost and a GDP decrease of $62 to $80 billion over the next 5 years.
- Since 2004, the price to access the Internet has dropped by 22.7 percent, while consumer prices rose by 13 percent. Yet, under the FCC’s plan, consumer bills could rise by as much as $55 per month.
- The plan creates great uncertainty for businesses looking to invest in broadband expansion. The FCC says they do not want to apply most regulations under Title II to the Internet, and then simultaneously ask the question: “Are there others [regulations] that should be added to this list?” This uncertainty has already impacted stock prices and individual company investments.
- Virtually all Congressional Republicans and at least 77 House and Senate Democrats – together a vast majority in Congress – have sent letters in opposition. U.S. courts and multiple presidential administrations of both political parties have set longstanding precedent that the Internet should remain unregulated. Most importantly, the American public opposes Internet regulations 53 to 27 percent.
Meanwhile, the comment process appears more of a procedural nuisance for FCC Chairman Genachowski than anything else. While the FCC’s proceeding was intended to ask how (if at all) the Internet should be regulated, the Chairman and the Commission’s majority have already sounded off on a regulatory plan called the “Third Way.”
For a copy of the comments, click here.
Free Press Manufactures Non-Profit Support for Internet Regulation
Remember when the socialist group Free Press was outed for their failed effort to manufacture support in Congress for Internet regulation? Now they’re at it again with third party non-profits. With the help of the Nonprofit Technology Network (NTEN), Free Press last week released a letter with 150 non-profit signers calling for Net Neutrality regulations on the Internet. Only many of the signers do not work on telecom or media policy – or really policy at all – and some were outright opposed to Internet regulation or took no stance. Included in this incredibly bizarre coalition were Helping Hands Pet Rescue, Planned Parenthood of North Texas, Amazing Kids!, and the Dr. Pepper Museum.
Almost immediately, signers started backpedaling. The Juvenile Diabetes Research Foundation International (JDRFI) sent a letter to the FCC requesting their name be taken off the letter and said a rogue employee signed on without consent from the organization. Then, it was realized that two of the signers ran the same organization, Network for Good. Another, Shaye Olmstead, signed twice – once from Helping Hands Pet Rescue and once from Operation Catnip.
Yesterday, an investigative piece in The Daily Caller found that some of the signers didn’t even know what Net Neutrality was or were outright opposed to it. Olmstead refused to return a call or email when asked what Internet regulations had to do with pet rescue and spaying operations. Melissa Ogden of Planned Parenthood of North Texas, said “I’m a member of the Nonprofit Technology, um, I can’t remember what it stands for, but they put the survey together.” Sounds like she has a vested interest in the FCC regulating the Internet.
Even worse, Jack McKinney of the Dr. Pepper Museum in Waco, Texas, wasn’t even aware their name was on the letter. When the reporter noted that the Internet isn’t currently regulated (as we’ve pointed out here, here, here, and here) McKinney interjected with “…and thank god for that!” He went on to note that the museum also runs the Free Enterprise Institute. “That isn’t good…I think someone has usurped us on this,” he said.
That usurper just so happens to be the socialist radicals at Free Press.
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Free Press: First Amendment for Me, Not for Thee
When the Federal Communications Commission merely met with private sector representatives to try to broker a legislative solution on Internet regulation last week, the neo-Marxist media reform group Free Press went berserk. As we mentioned before, the battle over Net Neutrality regulations is mainly between Internet service and content providers. But when the FCC agreed to meet with these two sides, Free Press’s President Josh Silver – who is one of the most vocal proponents of heavy Internet regulation – took issue with the FCC for just talking to the stakeholders that would be most impacted by the regulations he demands.
First, the group demonized the private sector and the FCC for daring to meet with anyone aside from Free Press and the far-left. This came despite the fact that a representative for the pro-Internet regulation coalition that Free Press is a prominent member of was one of the attendees at the gathering. That wasn’t enough, however. Free Press then dropped $42,000 on a single Washington Post ad (normally $122,000) chiding the FCC for including Internet service providers in the meeting. Again, they failed to mention that their coalition and the main private sector companies that also want Net Neutrality were in attendance. And, continuing their unbridled streak of false and illogical statements (see our FCC comments), they tried to wrap the attack ad in utterly irrelevant and populist sentiment about oil companies and banks.
Meanwhile, Free Press and their pro-regulation allies have had no less than thirty meetings with the FCC, not to mention the many meetings they had with the Obama administration’s transition team. If that’s not enough, Free Press’s former press director is now FCC Chairman Genachowski’s hand-picked Press Secretary, and the latest FCC plan to regulate the Internet looks like the staff of Free Press wrote it themselves.
There are two major takeaways here. First, the First Amendment of the Constitution expressly provides a right to petition government. Free Press has had their fair share of meetings at the FCC, but that’s neither here nor there. The fact is that in Free Press’s worldview, they run the entire telecom industry by silencing their opponents, since the right to lobby the FCC only applies to them and not those most impacted by their unwarranted and overreaching regulatory ambitions.
Second, how can anyone trust Free Press’s claim that they don’t believe this Internet regulatory power grab will lead to censorship of Internet and media content? (See here and here). If dismissing one clause of the First Amendment while claiming to embrace another isn't enough, they also go around manufacturing a “right” to Internet access. Show me that one in the Constitution. This should make clear Free Press's hypocrisy, manipulation of rhetoric, and their wildly inconsistent view on rights.
Free Press: You’re not the only voice in this debate. Quit pouting and get over it.
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British Regulators Oppose Net Neutrality
Americans are finding a growing number of policy decisions in Washington are rooted in the European-style regulatory state, but there is at least one place where the U.S. is “out-Europeing” Europe: Net Neutrality Internet regulations.
While some European governments (France, Norway, Sweden, and the EU) have created working groups, voluntary guidelines, or begun regulatory proceedings, yesterday the United Kingdom’s Office of Communications (Ofcom) released a preliminary report on Net Neutrality. Their conclusion: “there is currently insufficient evidence to justify regulation.”
The report takes a fairly reasoned look at how Internet service providers manage how data flows across networks – the very thing the Federal Communications Commission wants to regulate. Ofcom determined that such practices can actually bring a net benefit to consumers since their ultimate utility is preventing congestion and ensuring maximum Internet broadband speed. (Tell that to the socialist “consumer protection” advocates at Free Press.) In contrast, Net Neutrality is akin to letting all cars and trucks on the road enter a one-lane tunnel at the exact same time.
Proponents like Free Press have tried to argue that ISPs will prioritize or charge websites for consumers to access certain content, at times completely contradicting themselves to try to make the “doomsday scenario” point (see page 3 of our FCC comments). While the report looks at the potential for ISPs to engage in such business practices, they conclude that preventing it through regulation “is unlikely to lead to efficient market outcomes” and can actually be bad for consumers.
Ofcom argues the Internet is a “two-sided market” between content providers and consumers, with ISPs acting as a conduit between the two (though in reality most provide significant content themselves). If ISPs charge consumers too much, consumers won’t value the Internet. If they charge content providers too much, investment in content and applications will decrease, and – again – consumers won’t value the Internet. The goal is a balance between these sides to maximize efficiency and keep the cost low, something everyone desires.
ATR has long argued that consumers – not government – are the best regulators of business. Consumer demand in a free-market will balance the interests of ISPs and content providers alike to best ensure growth and innovation in all aspects of the Internet ecosystem. We’re glad Britain’s regulators appear to agree.