Kelly William Cobb
The FCC Has Left the Internet Alone for...25 Years and Counting
The organization Free Press has placed a haunting clock on their blog claiming that for the past 23 or so days the Internet has been left unregulated. Oh, the humanity! The problem is the clock is off by a little over 25 years. That's when the first dot-com address was purchased and the Internet began its basically unregulated tenure. And I think it’s fair to say the Web has done quite well for itself since that time.
Free Press is referring to the day this month that a U.S. Court of Appeals ruled the Federal Communication Commission has absolutely no authority under current law to regulate the Internet with seemingly benign “Net Neutrality” rules. But since this was the first time the FCC tried to lay down its heavy regulatory hand, it’s not like the Commission had any authority to do it before the court ruling. There is no change of precedent here. For the past 23 days, the law of the land is as it’s been for the past 25 years.
Nevertheless, Neutrality proponents continue to paint this as a sudden crisis. Free Press’s Megan Tady has proclaimed she doesn’t want to “wake up six months from now and find that the Internet has changed forever.” Um…yeah, me either. But this is exactly what Megan Tady, Free Press, and many other Net Neutrality supporters want: to reclassify the Internet under an antiquated regulatory scheme designed in the 1930’s for monopoly telephone service. As we mentioned time and time again, the Internet has never been a heavily regulated entity. In fact, this would mark the FCC’s first major change in Internet policy.
On the other hand, I do want to wake up six months from now and see Internet innovation and adoption continue. Over the past seven years, adoption of broadband has grown from 15% to 63%, while access is available to over 90% of households. Meanwhile, prices have dropped by 23% since 2004, while the overall consumer price index in the U.S. rose by 13%. There are no barriers to creating or accessing any lawful content, and growth in the digital economy continues to outpace the overall economy by roughly four to one. Yet, unnecessarily bludgeoning this innovation over the head with a heavy regulatory hammer is exactly what Free Press and other advocates want to do, and it will most assuredly have a negative impact across the entire Internet ecosphere.
So, it appears I’m the one who doesn’t want to see the Internet changed forever, and Net Neutrality/Title II regulation advocates do. I’d recommend that Free Press reset their clock back a couple decades, and then let it run. Or at least get their backwards rhetoric straight.
ATR Files Comments to FCC Opposing Net Neutrality
Yesterday, ATR filed comments with the Federal Communications Commission strongly opposing government regulation of the Internet under proposed Net Neutrality rules. We focused on many aspects, including Net Neutrality’s negative impact on competition, investment, and employment. However, the bulk of the comments are directed at why the FCC’s latest attempt to treat Internet service like 1930’s era telephone service is so incredibly ill-conceived. In the process, we also took aim a number of false, hypothetical and at times completely contradictory claims made by proponents of Net Neutrality. For example, the idea manufactured for political mileage that the Bush administration deregulated the Internet, despite the fact that the Internet has never been a regulated service.
Official federal rulemaking comments may not be the most exciting things to read, but in the fight to keep the federal government’s hands off the Internet – another 1/6th of the economy – they can be pretty important. ATR was pleased to join 47,000 opposing comments from individuals supporting the Internet Freedom Coalition.
To read ATR’s comments opposing Net Neutrality, click here.
New E-Commerce Tax Threatens Privacy Rights
The following is cross-posted from www.StopETaxes.com.
Earlier this year, Colorado became the first state to employ a new and controversial way to force consumers to pay tax on online purchases. House Bill 1193 required out-of-state retailers to provide the Department of Revenue with detailed customer information on purchases made, so that the state can pursue residents who fail to pay “use tax.” Use tax is sales tax on out-of-state purchases that requires the consumer, not the retailer, to collect and pay up.
Obama's Next Tax: The Internet
Since its tax day and you’ve (probably) already paid your taxes for last year, it might be worth noting one huge tax hike coming down the pike: the Internet tax. Yesterday, FCC Chairman Julius Genachowski testified before the Senate Commerce Committee about his recently proposed National Broadband Plan, which amongst other things would expand the Universal Service Fund (USF) tax on landline and cell phones to broadband Internet. You wouldn’t notice from his statement to the committee, however. Here’s how Genachowski so eloquently described what his plan does:
Fact Checking for The New York Times on Internet Policy
This weekend, the New York Times published an op-ed by University of Michigan professor Susan Crawford on the why the FCC should regulate the Internet. The op-ed outlines a unique history of an industry that was deregulated, leading to higher prices and lower speeds where discrimination can run rampant. It's unique because it's fanciful and untrue, as I alluded to in a prior post. Here are a few clarifications and corrections that the New York Times editorial board should have caught.
Crawford: "It wouldn’t be the first time that the F.C.C. relabeled Internet access services."
Every time the FCC has deliberately considered how to treat the Internet it has always found it to be a Title I, unregulated "information" service (see here, here, here, and here). So, it would be the first time. While DSL, it is argued, existed as a Title II "telecommunications service" until 2005, this was basically by default since DSL runs through phone lines, which fall under Title II. When the FCC first looked at how to treat DSL Internet specifically in 2005, they decided on Title I. Meanwhile, cable, wireless, and all other types of services, which make up over 70% of the market, have always been "information services" and were never under Title II. Reclassification would be the first time all Internet access services were relabeled, a significantly more "radical" idea than keeping them unregulated in the first place.
Crawford: "But under the Bush administration the F.C.C. deregulated high-speed Internet providers."
First, you can't de-regulate something that was never really regulated (see above). The FCC simply continued its hands off approach to regulating the Internet. Nevertheless, it appears Net Neutrality proponents are now trying to wrap this issue in the Bush administration for some sort of political gain. Yet opposition to Net Neutrality is not a partisan issue at all. The Clinton administration, at least as far back as Chairman Kennard, repeatedly referred to the Internet as an information service that shouldn't be regulated. And while Rep. Ed Markey has a bill to enact Net Neutrality (HR 3458) with 21 mostly Democratic co-sponsors, last fall 72 House Democrats sent a joint letter to the FCC opposing Net Neutrality. When Markey gets 72 Democratic co-sponsors, we'll talk. Until then, leave politics out of this.
Crawford: "The Bush F.C.C. hoped that deregulation would prompt greater competition in Internet access services. But a wave of mergers instead reduced it. Prices stayed high and speeds slow."
First, the number of providers increased by 22% between 2005 and 2008 (from 1,270 to 1,554), so there is certainly more competition. Second, while the consumer price index for all goods went up by 13.6% between 2004-2009, Internet access prices dropped by 22.7%. So, prices are dropping. Lastly, there is little consistent data on Internet speeds, but there are a couple things worth highlighting (calculated from FCC reports). Between 2002 and 2007, the number of people connecting to high-speed Internet went from 19.9 to 121.2 million and most of them switched from dial-up service. Furthermore, the number of people accessing speeds above 25 mbps grew by 66% between 2005 and 2007. When cable soon rolls out new technology (called DOCSIS 3.0), speeds across the country will reach up to 100 mbps. For a few more points and other arguments against Crawford's claim that the FCC can just classify the Internet however they want if they give "a good reason," check out this blog post by Scott Cleland.
All this "deregulation," proponents argue, means that ISPs are now able to discriminate against certain websites and therefore the Internet should be reclassified under Title II. However, in all this history, there are only two instances of discrimination ever known to occur, and only one has served as the evidence based talking point for Net Neutrality. Most importantly, that one instance garnered so much negative attention (lasting up to at least this blog post) that no ISP since has ever dared to manage their networks in such a fashion for fear of a similar market backlash.
Polls: Get Your Micromanaging, Moneygrubbing Hands Off The Internet
Following last week’s major setback in the FCC’s grand plan to regulate the Internet, a couple of polls have come out showing where the public stands on the issue. Needless to say, they lean strongly for less government involvement.
Day 2 and the Internet Still Works!
U.S. Court Strikes Down FCC's Internet Takeover
Connecticut Joins the eTax Fray
Crossposted from www.StopETaxes.com.
Last week, Connecticut joined a growing chorus of states considering a tax on e-commerce to help shore up budgets. The state's Joint Finance, Revenue and Bonding Committee held a hearing on Thursday where legislators hinted at eventual support for advancing the bill (HB 5481), which would require e-retailers to collect taxes on residents if they advertise through a third party based in the state.
Also, click here for ATR's letter to the Connecticut Joint Finance, Revenue and Bonding Committee opposing the bill.
Washington Legislature Battles Over Which Taxes to Raise
Now that Washington lawmakers have done away with that pesky, voter-approved I-960 measure that required a 2/3 vote to raise taxes, the tax-and-spend spree in the Evergreen State has kicked into high gear. House and Senate democrats have been tossing tax hike proposals back and forth for a couple weeks now. As we mentioned previously, the hang-up is whether to enact a massive tax hike through numerous, targeted tax increases (economic death by a thousand cuts) or to enact a massive tax hike through a larger, broad based tax hikes (economic death by guillotine).