FCC’s Destructive Inquiry Demands Congressional Action

Washington, D.C., June 17, 2010 – Reactions by
Competitive Enterprise Institute telecom policy analysts Ryan Radia and
Wayne Crews on the Federal Communications Commission’s Notice of
Inquiry on broadband regulatory classification:
Ryan Radia
Associate Director of Technology Studies
Competitive Enterprise Institute
The Notice of Inquiry launched today by the FCC will
take America’s broadband market down a dangerous path that threatens
competition, innovation, and consumer protection.
Congress has never permitted the FCC to mandate ‘open’ broadband Internet networks, as the Comcast court reaffirmed. In fact, many members of Congress have explicitly called on the FCC not to apply
telecommunications service regulation to the broadband sector. Yet
instead of heeding the call of Congress, the sole source of the FCC’s
authority, the Commission is attempting to grasp unnecessary and
destructive regulatory powers by offering legally dubious proposals to
reclassify Internet service providers. 
America’s telecommunications landscape wilted for much of
the 20th century under the FCC’s public utility-style regulation –
precisely the type of regulation the Commission now wishes to
perpetuate in the broadband sector. To the extent that there is
insufficient broadband competition in the United States, price controls
and other federal mandates are
to blame. Broadband
users need less government, not more.
Broadband networks and, more
importantly, networks that have yet to be created all hold enormous
promise for America’s economic future. It’s not a coincidence that
America’s most vibrant communications platform, the Internet, has
evolved largely free from regulatory intervention. As today’s
reminds us, the greatest obstacle to the evolution of
communications wealth is the FCC itself.
Wayne Crews
Vice President for Policy
Competitive Enterprise Institute
U.S. communications is at an important
inflection point. As today’s proceeding indicated, our national
communications laws are woefully outdated. These laws hinder broadband
competition and are responsible for legal distinctions at odds with
market developments.

Net neutrality is the perverse policy
that infrastructure companies should not control content, but that content
companies, in conjunction with FCC, should control infrastructure. So at the
outset, today’s proposal to arbitrarily classify frontier communications
technologies into self-serving government silos is backward,
destructive and offensive – and sets the stage for future political predation
against today’s temporary victors. It is the duty of Congress now to rein
in FCC’s inability to acknowledge when it needs to step aside, or recognize it
is not an elected lawmaker.

Communications policy must acknowledge
that competition between technologies is a key ingredient not just for
competition, but for promoting a national broadband policy. The best
way to achieve these objectives is through a series of deregulatory
legislative initiatives. Communications regulation deserves more than a
mere “update” – largely, it must be phased out.

The removal of
government regulation – deregulation – does not mean that the industry is
unregulated. Competition, or even the threat of competition, regulates
the behaviors of companies in efficient and consumer-enhancing ways. In
communications, competition exists among an increasing number of
platforms, and more.

Congress must consider these broad market developments and act in
tailored ways that change communications law and reforms the agency
that administers it. A next generation communications policy must
distinguish economic regulation from social welfare initiatives.
Congress should eliminate rules that regulate market performance and
focus on ways to implement social policy – such as universal service – in
ways that do not require FCC oversight. Finally, Congress should
restructure the FCC and provide a legislative mandate to increase the
market’s role in managing spectrum rights. 

CEI is a non-profit, non-partisan public interest
group that studies the intersection of regulation, risk, and markets.
For more about CEI, visit www.cei.org.