A solution in search of a problem. That’s the best way todescribe the Net Neutrality regulations that the Senate is currently debatingin anticipation of a vote later today.
The Internet is not broken. Given the present state of oureconomy, it is one of the few sectors that could be described as such. In justthe past decade the number of Internet users has soared from 513 million tomore than 2.1 billion. It has not only fundamentally changed how individualslearn, communicate, and work, but has spawned an entire economic ecosystem,without which Google, Apple, Facebook, and thousands of other companies (andthe jobs they created) would not exist.
Moreover, all of this growth and innovation has occurred inlarge part without government regulation. Indeed, it is not a stretch to saythat the Internet is the definitivefree-market success story of our generation. Sadly, that hasn’t stoppedWashington from wanting to gets its hands on it. And unlike Midas (or SteveJobs, if we’re sticking to the theme), everything the government touches doesnot turn to gold.
By way of background, Net Neutrality is the principle thatInternet service providers should not block or slow-down consumer’s access tonetworks. The fear, as Sen. John Kerry (R-MA), explainedon the Senate floor yesterday, is that “the people who control those accesspoints [to the Internet] can start discriminating about who gets access at whatspeed . . . and begin to charge mo"re for [faster access].”
Except there is little evidence that would ever happen. Whatsupporters of Net Neutrality seem to forget is that consumers tend to not likegetting shoddy, slow, or overpriced service.
That’s one of the reasons internet service providers have been fallingall over themselves to invest in the needed infrastructure. Consider the recentbattle between Verizon Wireless and AT&T – each of which have spentmillions of dollars in an ad war about the relative strength of their mobile “3G”networks. Consumers are increasingly savvy about these sorts of things and thefree market has worked to keep them not only honest, but pushing forimprovement. That’s one of the reasons that 93percent of broadband subscribers are happy with their service – more than10 times higher than the 9percent approval rating Americans give Congress.
But while Net Neutrality proponents rest their claims onunfounded predictions of some future harm, the threat of the FCC’s proposedregulations are very real.
Implementing Net Neutrality regulations would require theFCC to have deep access to the business practices of the regulated internetservice providers. This would include the ability to constantly monitor anddraw data from network structures, content types, delivery modes and speed,applications, user preferences, and usage activity. This is not merely aprivacy concern. It would equip the FCC with a vast body of information thatcould enable the implementation of a long-sought Internet taxation scheme. Andwith Democrats constantly on the search for more revenues to fund theirspending habits, the temptation for Internet tax schemes grows.
In searching for a solution to a phantom problem, the federalgovernment threatens to create a very real one – stifling investment in ourmost promising source of economic growth. There is no market failure here thatrequires the government to regulate. Rather, the Internet is a free marketsuccess story that, if Net Neutrality regulations proceed, could end up with a verysad ending.