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Thursday, March, 25, 2010

W. Kenneth Ferree (The Progress & Freedom Foundation) assesses the FCC's authority to engage in such far-reaching regulation

PLI: More fundamentally, is there any public policy reason for the FCC now to be meddling with something as wildly successful as broadband Internet services?

W. KENNETH FERREE: There is no evidence of a market failure in the broadband market.

There has been no significant discriminatory ISP blocking of subscriber access to Internet content or applications, and on the rare occasions that it has occurred, it has swiftly been remedied in the marketplace.
The FCC is — as charged by Congress — in the midst of developing a national broadband plan. Establishing rules regarding the usage and management of networks in advance of that plan is nonsensical.

There are significant risks associated with regulatory intervention in technologically dynamic markets.

The proposed rules may actually discourage investment and inhibit the development of new networks. If large Internet Service Providers are not going to invest in new infrastructure, who will?
Markets and technologies move faster than bureaucrats. No matter how capable and impartial the regulator, there is no single formula now, and certainly not looking forward, that captures all reasonable network management practices. Worse there is no reason to believe that the regulator will not be subject to political manipulation.
As my Colleagues Adam Thierer and Berin Szoka have pointed out, there is an aspect of "mutually assured destruction" to government regulation of the Internet infrastructure. The FCC's assertion that this proceeding involves only neutrality at the infrastructure layer of the Net rings hollow; hints of regulatory creep already are appearing.
The implications of broad government regulation of the Internet at multiple levels are troubling. As Google Chief Executive Eric Schmidt has noted: "It is possible for the government to screw the Internet up, big time." Mistakes made in the competitive marketplace can be quickly identified and remedied; regulatory mistakes can last a lifetime.

The FCC has, for reasons shrouded in the mists of Washington politics, overreached in its Notice proposing to establish new rules limiting what Internet Service Providers can, and cannot, do. Its authority to adopt rules in this area is severely constrained — if it has any at all — and its decision to regulate in this area is unwarranted and risky.

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