Regulation threatens Internet vitality

When then-FCC Chairman Michael Powell first articulated the principles in 2004, he explained that he was doing so to avoid rules. “[T]he case for government-imposed regulations regarding the use or provision of broadband content, applications and devices is unconvincing and speculative,” he said. “Such interference should be undertaken only where there is weighty and extensive evidence of abuse.”

We have no such evidence. A few exaggerated incidents over a decade do not a crisis make. Americans enjoy ever-increasing access to all manner of innovative content and services at the click of a mouse. By making bureaucrats the ultimate arbiters of network management, rather than engineers and entrepreneurs, so-called “network neutrality” rules would discourage investment and harm broadband deployment.

Approximately 90 percent of the country has access to 10-megabit-per-second broadband. That’s not insignificant. Some are calling for 100 percent access to 100-megabit-per-second service. I support such aspirations, but we cannot spend our way to broadband nirvana.

Although the February 2009 stimulus bill allocated $7.2 billion for broadband grants and loans, the project awards are already late, have totaled less than $185 million as of mid-December, and may prove ineffectual, according to industry observers. Moreover, the full price tag for achieving nationwide availability of 100-megabit-per-second service would cost $350 billion, according to Blair Levin, the executive director of the FCC’s Omnibus Broadband Initiative. Taxpayers cannot afford that bill.

Our best hope remains the commercial market. This year alone, cable, wireline and wireless companies invested $60 billion. But the private sector is not going to foot a $350 billion tab if it must suffer under the thumb of an FCC Internet czar that micromanages how companies operate networks.

Companies are even reluctant to spend other people’s money when network neutrality strings are attached, as evidenced by reports that most major industry players passed on stimulus funding because of network neutrality restrictions the implementing agencies placed on the money.

This is not a new debate. Former FCC Chairman William Kennard noted in 1999 that “[t]he fertile fields of innovation across the communications sector and around the country are blooming because from the get-go we have taken a deregulatory, competitive approach to our communications structure — especially the Internet.”

He was criticizing calls to force “open access” on cable systems. But whether we call it “open access” or “network neutrality,” it boils down to old-fashioned, common carrier regulation. And as Chairman Kennard recognized in that same speech, “regulation of data services as regular common carrier transmission would inhibit flexibility and in turn development and deployment of these already competitive services.” Indeed, it was only after the defense agencies turned the Internet over to the private sector that we saw the phenomenal growth and innovation that is rampant today.

Adding insult to injury, the FCC is proposing to apply the new rules to cable and phone companies but not Web-based companies. In 2004, Chairman Powell was clear in reciting each of the original four principles that they were meant as guideposts for “all facets of the industry.”

For the FCC to pick winners and losers by applying rules discriminatorily is wholly inappropriate. Doing so would hinder competition by favoring entities on the edge of the Internet ecosystem over those in the center. Government should encourage innovation throughout the Internet, not sway its evolution in a particular direction.

For all these reasons, I, Energy and Commerce Committee ranking member Joe Barton (R-Texas), Minority Leader John Boehner (R-Ohio) and Minority Whip Eric Cantor (R-Va.), more than 70 House Democrats, the U.S. Chamber of Commerce, the National Association of Manufacturers, the International Brotherhood of Electrical Workers, the Communications Workers of America, more than 10 state governors from both sides of the aisle, and many others wrote letters of concern when word of the proposed rules began to leak.

The good news is it’s not too late. Public comment in the FCC’s proceeding is not due until Jan. 14 and replies are not due until March 5. Perhaps the FCC will see the folly of its proposal. But in case it doesn’t, I am working on a bill that would prohibit the FCC from adopting network neutrality regulations absent concrete evidence of a market failure, and that would require any rules to be applied in a nondiscriminatory manner. Let’s hope the bill will not be necessary.

Stearns is the ranking member on the House Energy and Commerce Subcommittee on Communications, Technology, and the Internet.