This week, NTU filed comments to the Federal Communications Commission (FCC) on the agency’s “Restoring Internet Freedom” Notice of Proposed Rulemaking. In those comments we reaffirm our support of FCC Chairman Ajit Pai’s efforts to lift the burdensome and outdated “Title II” regulations on broadband Internet service, and return to the governing approach that has ably served consumers for so many years. But as NTU pointed out in its filing, public officials all too often overlook another important constituency that benefits from Internet freedom: taxpayers.
The cumbersome Internet rules currently in place were enacted during the Obama Administration under then FCC Chairman Tom Wheeler. Title II regulations are a product of the Telecommunications Act of 1934 and were designed to oversee telephone monopolies of nearly a century ago. And these rules were actually inspired by railroad regulations of the late 1800s – hardly an ideal method to govern something as fast evolving, innovative, and vibrant as the Internet.
As we outline in our comments, an Internet once allowed to thrive without excessive government interference fostered an environment of significant economic growth, broadband expansion and life-enhancing innovation. Adding the cloud of Title II, as the previous FCC leadership did, resulted in widespread uncertainty and an overall drop in network investment ($4 billion last year alone). This was a first since consumer broadband Internet service took off in the mid-1990s.
From a taxpayer perspective, more government involvement in the Internet, or just about any area for that matter, means more fiscal hits on everyday Americans. Taxes and regulations often form a menacing “tag team” that delivers those punches. Even though last year NTU and its allies won a key protection against discriminatory state and local taxes on Internet service, threats like Title II remain. We only have to look at lagging consumer innovation and hefty taxpayer burden within the European Union to see what our future will look like if we don’t keep fighting back.
But even as we consider what could happen if big government is allowed to prevail, we must also remember the positive developments for taxpayers if we succeed in taking a different path from Title II. Scaling back the size and invasiveness of government, while at the same time encouraging innovation has resulted in proven cost savings at the federal, state, and local levels. These include cloud-based data storage, teleconferencing among agencies, online licensing applications, and more efficient human resources policies for government employees. Add in the potential future benefits of breakthroughs like superfast 5G wireless service – among them traffic system management and first responder communications – and the payoff from smart policy is only higher.
We are equally encouraged that the FCC is choosing to let the numbers, rather than an ideological slant, lead the way by emphasizing a cost-benefit analysis as part of the rulemaking process. Policymaking without a sound economic foundation results in disaster for taxpayers and consumers alike.
Ultimately, while the FCC’s efforts with this rulemaking process are critical, the ideal solution to this ongoing problem must come from Congress. Democrat and Republican-led FCC’s will endlessly go back and forth on the preferred method of regulation of the Internet. Lawmakers in Congress can stop this swinging pendulum by codifying into law an Internet free of outdated regulations. In any case, this is a timely endeavor, since Congress last fundamentally updated telecommunications policy in 1996. To say much has changed in the decades following is quite an understatement. This effort is all the more important the longer interpretation of this outdated law is left in the hands of unelected bureaucrats who are not accountable directly to the affected taxpayers.
NTU supports a free and open Internet, not an onerously regulated, stagnant one. We hope that the current efforts of the FCC, and eventually Congress, will help guarantee that we have a truly taxpayer- and consumer-first Internet once and for all.