Broadband Plan Would Vastly Expand Government Power over the Internet

Washington, D.C., March 16, 2010 – Statements by Competitive Enterprise Institute telecom policy analysts Wayne Crews and Ryan Radia on the FCC’s National Broadband Plan:

Wayne Crews
Vice President for Policy
Competitive Enterprise Institute

The FCC deserves praise for acknowledging the importance of competition among technologies as a key ingredient for promoting a national broadband policy. At the same time, unfortunately, the Commission’s plan seeks new realms to rule even as the very need for regulation evaporates.

America’s challenge is not for the FCC to ‘do something’ in the communications and Internet realm, but rather to dismantle obsolete regulatory impediments that constrain the market’s freedom to expand infrastructure and content access. If we were starting from a clean slate in today’s world, we wouldn’t create a Federal Communications Commission with command over price, entry and services.

If ever an economic sector needed a coherent vision for substantial liberalization, broadband is it. The Internet has been among mankind’s most liberating technologies, erasing the constraints of distance and information scarcity while making broadcasters out of billions of people. Today’s communications landscape has empowered individuals to speak and exchange ideas in ways that our nation’s framers could never have imagined.

Ryan Radia
Associate Director of Technology Studies
Competitive Enterprise Institute

A year ago, Congress tasked the FCC with developing a plan for promoting broadband access and adoption throughout the United States. Unfortunately, the Commission seems to have interpreted this mandate as a license to vastly expand its regulatory powers in spheres ranging from energy to health care to education. These proposals endanger Internet freedom and threaten to further subjugate the broadband market to political manipulation.

The national broadband plan proposes the creation of numerous new federal programs designed to bring America closer to “universal” broadband access. But as the Universal Service Fund has illustrated, government-centric efforts to expand telecommunications networks suffer from inefficiencies, waste, and fraud. Actual consumer demand should drive the growth of broadband networks, not government slush funds. Federal programs to subsidize the expansion of broadband service, whether funded via new taxes on broadband users or spectrum auction proceeds, amount to economically destructive wealth-redistribution schemes that divert resources from productive uses to unproductive ones.

The FCC’s proposals to expand access to spectrum should come as welcome news to consumers of mobile telecom services. If the airwaves are to realize their full potential, however, the Commission must resist the temptation to intervene in spectrum markets by imposing “public interest” conditions or other artificial constraints that have plagued past spectrum auctions. Such attempts by the agency to steer the future of the communications and broadband markets in politically favored directions threaten to harm consumers and obstruct the creation of telecommunications wealth.