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FCC Commissioners Should Reject Net Neutrality Rules

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FCC Commissioners Should Reject Net Neutrality Rules

Proposed Regulations Would Stifle Wireless and Broadband Markets

Washington, D.C., December 20, 2010 – Tomorrow morning, the FCC will hold a vote on network neutrality rules, mere days before Christmas celebrations begin.

However, telecom analysts at the Competitive Enterprise Institute urged FCC commissioners to vote against the proposed rules, arguing that they would thwart the Internet’s evolution and empower an obsolete, destructive regulatory agency to continue meddling with an increasingly competitive marketplace.

Statement of Wayne Crews, CEI Vice President for Policy:

America’s challenge is not for FCC to ‘do something’ in the communications and Internet realm, but rather to dismantle and move beyond earlier regulatory impediments that have limited our creative freedoms in expanding infrastructure and content access.

The FCC’s proposed net neutrality rules rest on the fallacy that government action is needed to ensure a vibrant, innovative Internet. In reality, today’s Internet is as free and innovative as ever, while consumer choice among broadband providers is at an all time high. Even the “limited” net neutrality rules set to be announced tomorrow would empower a heavily politicized federal agency to dictate the outcomes of otherwise-private disputes over network access and pricing.

The FCC needs to bring something to the table apart from an appetite for regulation. When liberalizing a heavily regulated segment of a mixed economy, the gauge of the impending reform’s appropriateness is simple: The body of private activity subject to regulation must decrease, not increase.

Statement of Ryan Radia, CEI Associate Director of Technology Studies:

Any rules established at tomorrow’s meeting will likely be overturned by federal courts, which have previously ruled that the FCC does not have the authority under the Communications Act to enforce network neutrality principles. The incoming Congress may well pass legislation limiting the FCC's ability to regulate the Internet.

The vagueness of the FCC’s proposed rules is especially troubling. No one knows exactly what constitutes “unreasonable” discrimination, or how future commissioners will interpret such language. Given how fast commerce and technology evolve on the Internet, politicizing the business decisions of broadband and wireline providers is a recipe for stagnation and unintended consequences. Discouraging network investment through regulation poses a far greater threat to the Internet's future than hypothetical neutrality violations.

If net neutrality is as virtuous as its proponents suggest, then it will ultimately triumph on its own merits -- without government intervention. But exclusionary, proprietary networks may yet play an invaluable role in propelling connectivity, despite closed systems' shortcomings. The proper role of government in the telecom sector is to respect property rights and stay out of market disputes.