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Liddick: Government meddling on the Internet

by Morgan Liddick

If you use the Internet, Julius Genachowski has plans for you.

For those among us who focus our attention elsewhere, Mr. Genachowski is Barack Obama’s former campaign technical advisor and currently his chairman of the Federal Communications Commission. Over the past few months, he has been casting about for a way to insert government regulation more firmly into the business of the Internet, particularly the development of its broadband capabilities.

One would think that he would know better. Mr. Genachowski has been – among other things – a player in Internet services development, serving as an executive in two venture-capital firms specializing in this area. As such he should know about the effects of government regulation on investment, particularly in areas of emerging technology. So maybe it’s his Harvard Law School background reasserting itself, or perhaps he is thinking back to his former service on the FCC board during the Clinton Administration. Whatever the reason, his calls for “more diversity” in media ownership rules, his support for subsidized broadband access and his embrace of a “National Broadband Plan,” which would inject the FCC directly into questions of Internet regulation, give some reason for pause.

Three weeks ago, the FCC Chairman called for the reclassification of the “transmission component of broadband access” as a regulated telecommunications service. The immediate effect of this change – and its immediate implementation was part of the package Mr. Genachowski advocates – would be to place those who provide any type of broadband Internet access into the same highly regulated category as telephone service. Ask Qwest how that worked out for them.

One of the reasons for the proposed change is last month’s federal appeals court ruling that the FCC cannot interfere with access providers’ decisions about Internet traffic over their networks. Not only was this decision (the Comcast case) guaranteed to stoke the ire of an agency dedicated to regulation, it flew in the face of those embracing “fairness” and “equality” through appropriation of private property (created network bandwidth) for the use of politically favored users or groups. Make no mistake: When people start talking about “net neutrality” or other such abstractions, what they are really saying is that they don’t trust you to make decisions for yourself about what you demand from a provider. And despite assurances that the purpose of new regulation of service providers will not extend to content, when the word “fairness” is heard, do not doubt that this is the ultimate objective.

Several things are at stake here. The first concern is economic: Over the past two years, about $120 billion has been invested in developing new broadband services. There is now grave concern in the business community and in Congress that further investment will be curbed by uncertainty over new regulations. Congressman John Dingell acknowledged this possibility in a recent note to the FCC about Mr. Genechowski’s proposals, and 73 of his Democrat colleagues agreed. Of course, to someone who believes that all significant services in a society should be provided by the government, this withering away of business involvement is no objection at all; it may even be a goal.

The second concern is that the change in regulation seems to be a solution for which no problem has been discovered. The present regulatory environment seems to be working well, with the occasional glitch being quickly resolved. In the absence of need, there should be an absence of action.

The third problem has to do with wasting the people’s time and treasure. Given the appellate court’s decision in Comcast, most people who pay attention to these sorts of things agree that applying old rules in new ways, which is what Mr. Genachowski proposes, is also likely to fail a judicial challenge. Which in turn suggests that the FCC chairman’s proposal smacks more of petulance than of probity.

The last issue is that of nebulous concept and unintended consequence. If “fairness” or “neutrality” are the problems to be addressed – and both seem implausible complaints to me on Planet Internet, where I can easily discover both the Huffington Post and AnnCoulter.com – they are better addressed through the political process than in the opaque world of regulatory rule-making. At least there will be less risk of litigation on whether search-engine rankings are, ipso facto, “fair.”

And there is the philosophical objection to allowing a political appointee to arbitrate what is “fair.” Call me cynical, but I suspect the outcome might have to do with where one stands.

And with who pays the bills.

Summit County resident Morgan Liddick pens a Tuesday column. E-mail him at mcliddick@hotmail.com. Also, comment on this column at http://www.summitdaily.com.


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