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Dear FCC: How About a Fourth Way?
Posted By: Andrew Moylan - 06/15/10

This coming Thursday marks the next step in the raging debate regarding the ambitious effort of the Federal Communications Commission (FCC) to regulate the Internet. On June 17th, the FCC will conduct an open meeting in which they will discuss their plans for so-called "reclassification" of broadband Internet in order to impose net neutrality regulations, an issue that has been the cause of much dispute in the past several months.

The root of this disagreement lies in the Comcast Corp vs. FCC U.S. Court of Appeals ruling this past April. It's a long story (surprise!), but Comcast had been exposed as slowing down traffic on some torrent sites in order to prevent their network from being overloaded and the FCC attempted to crack down on them legally. The Supreme Court ruled, however, that the FCC lacked the authority to dictate how the Comcast Corporation could manage its network. But even without that legal action, Comcast had announced that it would stop the practice after hearing an outpouring of opposition from their paying customers. The FCC was soundly rebuked for its regulatory overreach, and Comcast agreed to stop slowing traffic so as to avoid angering any more of their customers. End of story, right? Not exactly.

The Federal Communication Commission decided to retaliate against this Appeals Court ruling by redefining their terms. The FCC is likely to begin proceedings on Thursday in their plan to "reclassify" broadband Internet from its current status as an "information service" to a "telecommunications service" regulated under Title II of the Communications Act. For those of you who aren't regulation nerds (and really, who is?), that basically means that the Internet would change from being regulated under the lighter regime that has allowed its exponential growth in recent years to a regime intended to regulate monopoly telephone providers back before World War II. Because, you know, the Internet is totally what Congress had in mind when drafting Title II in 1934. That seemingly minor regulatory change could generate any number of extremely onerous new restrictions, like having the government dictate prices.

Though the FCC hopes to present this reclassification in light of warm, fuzzy terms like "consumer protection," the real question here is this: who should have the ability to manage the multi-billion dollar networks that comprise the heart of the Internet, bureaucrats in the FCC or the businesses that built, own, and maintain them?

On Thursday, this issue will be discussed in light of three specific points:

  • The legitimacy and legality of the Commission's previous decision to call broadband Internet an "information service."
  • The consequences of reclassifying broadband Internet as a "telecommunications service."
  •  Whether or not to adopt the Orwellian "third way," in which FCC Chairman Julius Genachowski would basically cross his heart and totally promise that this regulation would be minimal and not expand in size and scope like every other government effort ever.

The solution to this issue lies not in a cagey reclassification of terms, but rather a free market approach. Call it a "fourth way," if you're feeling Genachowski-esque. Recently a group of broadband and high-tech companies -- the Broadband Internet Technical Advisory Group -- voluntarily collaborated in order to facilitate discussion on how to create their own solution to network management and technical Internet issues. Much-deserved kudos to the member companies for cooperating to try to face the real issues of network management head on, as many of them have been at each other's throats for years in the marketplace and on net neutrality, for cooperating to try to face the real issues of network management head on. This is the solution we should be advocating because the last thing the Internet needs is an army of bureaucrats deciding how it should be managed.

After all, do you think we should trust the regulation of the Internet to the geniuses behind the unintentional comedy that is the FCC KidsZone? I mean, the site has information about cutting edge technology like PAGERS and ANSWERING MACHINES!

So how can you get involved? The best thing to do right now is to call your Member of Congress! It seems like a cliché, but it works and it's necessary. Since the FCC seems determined to do whatever the heck it wants, rules be damned, Congress needs to assert its authority to tell Genachowski to simmer down. Call your representatives and tell them you oppose net neutrality and reclassification in order to regulate the Internet!

 

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New Series at Government Bytes: And WE'RE Astroturf? Part I
Posted By: Andrew Moylan - 05/10/10

You've no doubt heard liberal Members of Congress and other interest groups calling the Tea Party movement "astroturf," a play on the term grassroots.  Like our good friend Nancy, for example...

Or the liberal pro-net neutrality group Free Press, which has an entire section on its site devoted to "outing" so-called Astroturf operations.  This page includes a handy-dandy widget with a graphic of large corporations pulling the strings of Congress.

They claim that the whole movement is the invention of a bunch of Beltway insiders backed by piles of corporate cash.  For them, it simply does not compute that ordinary Americans could be fed up with trillions of dollars in debt, tax hikes, and runaway spending.  It MUST be the orchestrations of rich puppet-masters in DC, right?  Instead of spending hours debunking those claims, I'll point to a post I made on our old blog after the massive 9/12 March on Washington that NTU helped to organize.  Several hundred thousand people from all across the country do a better job of dismissing these silly claims than I could here.  Instead, the "And WE'RE astroturf?!" series will focus on liberal activists employing exactly the kind of shady strategies that they accuse us of using.

So, that group I mentioned, Free Press?  The ones that have a page on their site to expose "Astroturfing?"  Last week, they were outed as being the true authors behind a letter supposedly written by Congressman Jay Inslee (D-WA).  The letter is being passed around to various Congressional offices to solicit support for FCC Chairman Julius Genachowski's radical effort to thumb his nose at the limits of his regulatory authority.  But the properties of the electronic file show that the real author of the letter was not Mr. Inslee or a member of his staff, but none other than Free Press Policy Director Ben Scott!

I've worked in government affairs for the National Taxpayers Union for nearly five years now.  Never in my life have I ghost-written a letter for a Member of Congress, nor have I offered to or been asked to do so.  It's just not a part of the discussions we have with Congressional offices.

So, Free Press, what say you?  Are you pulling Jay Inslee's strings?  What other seemingly spontaneous pro-net neutrality efforts have you coordinated?  How many other letters or bills have you written behind closed doors without getting caught?

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Amazon & North Carolina Spar Over Customer Data
Posted By:  - 04/22/10

Interesting bit of back and forth between Amazon and the North Carolina Department of Revenue over what information Amazon must provide to the state of North Carolina.  The heart of the issue?  Fairness, of course.  According to Kenneth R. Lay, the state's Revenue Secretary, "[Local] businesses are at a competitive disadvantage when they have to collect sales taxes that other businesses do not. The Department is committed to supporting North Carolina small business and facilitating the equitable collection of taxes from both individual and corporate taxpayers."  The "problem" for equitable collection is always that wacky Quill decision and its nexus standards that protect taxpayers and prevent states from running roughshod over out-of-state businesses.

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NTU to Connecticut: Don't Tax Broadband
Posted By:  - 04/19/10

Today, NTU sent an open letter to the members of the Connecticut Legislature, urging them to oppose HB 5255. The letter reads:

"HB 5255 would raise property taxes on broadband service equipment, which is already subject to the highest property tax rate in Connecticut. Broadband providers would simply pass along the cost of this tax increase to their customers, who would in turn see higher prices for cable television, telephone service, and high-speed Internet service. Increasing taxes on struggling businesses and raising prices for consumers makes no economic sense."

"Connecticut residents already live under one of the highest state and local tax burdens in the nation. Meanwhile, the state’s total expenditures have grown by more than $3 billion over the last three years. This largesse could have closed the $371 million projected gap for the next fiscal year eight times over. The state must end its dependence upon the unhealthy prescription of higher taxes and government spending. Instead, targeted budget cuts are necessary to restore government to its proper, sustainable size, while taxes should be reformed and reduced to provide relief to overburdened Connecticut taxpayers and spur economic growth."

Let's hope that the Legislature takes this recommendation to heart, for the sake of all broadband users, small businesses, and Connecticut residents.

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Broadband Doesn't Need .gov's Help
Posted By: Andrew Moylan - 04/01/10

Some super-genius guy wrote a super-genius op-ed in today's Washington Times entitled, "Spare Us the Broadband Plan."  In it, that super-genius guy (hint: that's me, and I'm joking. I'm just a regular genius) talks about the grand scheme released by Chairman Julius Genachowski of the Federal Communications Commission, known as the "National Broadband Plan."

I'll save you the excruciating task of reading all 376 pages of it and instead give you the Cliff's Notes here: Genachowski thinks the federal government needs to implement a wide range of regulations and tax infrastructure changes to subsidize the expansion of broadband internet services to people who can't get it currently.

"Hey, super-genius guy," I hear you saying, "wouldn't it be a good thing to spread high-speed internet access all across the country? Think of the benefits that would bring!"  To which super-genius guy responds, "First of all, I already pointed out that I'm just a regular genius. And second, of course it would be good, but is it worth $56,000 per home to do it?"  Here's part of the op-ed that discusses the true cost of extending broadband that last little bit...

"Even the hardest-to-serve Americans who live in remote areas can choose from several satellite providers that offer speeds of 1 megabit per second (18 times faster than dial-up) for $60 to $70 per month. That's not as fast as cable or telephone companies' broadband speeds, but it would seem to make more sense than spending $24 billion to build 4-megabit-per-second land lines out to those remote areas, as the FCC estimates it would cost.

Economist Jerry Ellig of the Mercatus Center at George Mason University points out just how costly it will be to do things the FCC's way: "That $24 billion 'funding gap' also deserves comment. That's the amount of subsidy the plan estimates will be required to make 4 Mbps broadband available to all Americans. If you read the plan carefully, you will also find that a whopping $14 billion of that is required to bring broadband to the highest-cost two-tenths of one percent of American housing units - 250,000 homes (see page 138 of the National Broadband Plan). That works out to $56,000 per housing unit!" Incredibly, $56,000 would be enough to buy satellite Internet service for each of those households over the next 66 years."

Silliness aside, there are real issues at stake with this broadband plan. In roughly a decade, we've gone from just 8 million people having broadband service to more than 200 million. The increase in internet speeds has been mind-boggling, even to those that follow the industry very closely.  I can vividly remember logging on to the internet via a 9,600 bps modem not too long ago.  When we finally upgraded to 56k, it seemed like a miracle, and we're already light-years past that.

Simply stated, broadband has expanded quite well without any centralized doctrine from Washington.  While the goals of the National Broadband Plan are admirable, it's not at all unreasonable to think that the rapid advancement of technology would make its guidelines obsolete within just a few years.  Combining the Plan with so-called "net neutrality" regulations would be a double-whammy for taxpayers to revolutionize an industry that's been revolutionizing itself without bureaucratic bungling.

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Amazon Drops Affiliates in Colorado after "Amazon" Tax
Posted By:  - 03/09/10

ZDNet reports that Amazon has dropped its affiliates program in Colorado after Governor Bill Ritter signed an "Amazon" tax bill into law.

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