Harms of a Potential New FCC De-Competition Policy — Reply comments to FCC Open Internet NPRM

April 5, 2010

 

The FCC’s proposed Open Internet Regulations and/or the oft-rumored potential re-classification of broadband as a Title II telephone service effectively would create a new FCC “de-competition policy.” (For the one-page PDF submitted to the FCC click here)

 

A new FCC “de-competition policy” would:

  • Supplant market-based competition policy with outdated common carrier regulation policy;
  • Shift the FCC’s primary purpose from promoting competition to promoting openness;
  • Replace the core mechanism for advancing consumer welfare from a voluntary, bottom-up, market-based competition system, to a coerced, top-down, centralized, FCC regulation system; and
  • Remove users from being in charge of the Internet to the FCC asserting control over the Internet.

 

A new FCC “de-competition policy,” unauthorized by Congress, would effectively:

  • Devolve existing communications law from its purpose in the 1996 Telecom Act “to promote competition and reduce regulation” to promote regulation and reduce competition;
  • Abandon existing Congressional Internet policy in law, which is “to preserve the…competitive free-market…Internet…unfettered by Federal or State regulation;
  • Distort the notion of an “open” market to mean government-driven, not competition-driven; and
  • Install the introduced, but never marked up or passed, Markey-Eshoo bill (HR 3458) as new national policy.

 

The harms of a potential new FCC “de-competition policy” are:

  •  Missing the point of competition and its unique benefits:
    • Best at anticipating consumers’ ever-evolving and diverse demands — in real time;
    • Best at responding to demand with a diverse offering of consumer choices and platforms;
    • Best at incenting real innovation through opportunity for reward and the discipline of risk;
    • Best at delivering sustainable economic growth and good job creation broadly; and
    • Best at generating sustainable, long-term, multiple-technology infrastructure investment.
  • Over-reaching regulatory hubris:
    • Ignoring the Federal fiscal reality that the FCC must rely on robust private investment for universal broadband;
    • Positing without evidence, that the FCC’s visible hand can outperform market’s invisible hand;
    • Deeming the lobbying contest for specially-granted regulatory prices, terms & conditions to be “competition,” but facilities-based, multi-technology competition for consumers’ business based on price, value, innovation, and differentiation – to not be competition; and
    • Over-reaching with big regulatory changes without authority, justification, or consensus.
  • Undermining the National Broadband Plan’s consensus with de-competition policy’s major strife.
  • Regressing backwards to a 19th century regulatory paradigm designed for a single technology monopoly (railroads), away from a 21st century competition paradigm for diverse technologies.
  • Halting progress by changing the rules and moving the goalposts mid-game, requiring a complete — regulatory, legal, policy, business, investment, competition, and innovation — do-over.
  • Supplanting technology-neutral policy with industrial policy favoring Google, eBay & Amazon.
  • Ignoring the FCC’s well-known regulatory/legal failures from a decade ago and the consequent bubble speculation and crash they helped cause (CLEC & fiber bankruptcies, dotcom bubble) with no lessons-learned or analysis why new de-competition policy won’t result in déjà-vu.

The FCC’s proposed Open Internet Regulations and/or the oft-rumored potential re-classification of broadband as a Title II telephone service effectively would create a new FCC “de-competition policy.” (For the one-page PDF submitted to the FCC click here)

 

A new FCC “de-competition policy” would:

  • Supplant market-based competition policy with outdated common carrier regulation policy;
  • Shift the FCC’s primary purpose from promoting competition to promoting openness;
  • Replace the core mechanism for advancing consumer welfare from a voluntary, bottom-up, market-based competition system, to a coerced, top-down, centralized, FCC regulation system; and
  • Remove users from being in charge of the Internet to the FCC asserting control over the Internet.

 

A new FCC “de-competition policy,” unauthorized by Congress, would effectively:

  • Devolve existing communications law from its purpose in the 1996 Telecom Act “to promote competition and reduce regulation” to promote regulation and reduce competition;
  • Abandon existing Congressional Internet policy in law, which is “to preserve the…competitive free-market…Internet…unfettered by Federal or State regulation;
  • Distort the notion of an “open” market to mean government-driven, not competition-driven; and
  • Install the introduced, but never marked up or passed, Markey-Eshoo bill (HR 3458) as new national policy.

 

The harms of a potential new FCC “de-competition policy” are:

  •  Missing the point of competition and its unique benefits:
    • Best at anticipating consumers’ ever-evolving and diverse demands — in real time;
    • Best at responding to demand with a diverse offering of consumer choices and platforms;
    • Best at incenting real innovation through opportunity for reward and the discipline of risk;
    • Best at delivering sustainable economic growth and good job creation broadly; and
    • Best at generating sustainable, long-term, multiple-technology infrastructure investment.
  • Over-reaching regulatory hubris:
    • Ignoring the Federal fiscal reality that the FCC must rely on robust private investment for universal broadband;
    • Positing without evidence, that the FCC’s visible hand can outperform market’s invisible hand;
    • Deeming the lobbying contest for specially-granted regulatory prices, terms & conditions to be “competition,” but facilities-based, multi-technology competition for consumers’ business based on price, value, innovation, and differentiation – to not be competition; and
    • Over-reaching with big regulatory changes without authority, justification, or consensus.
  • Undermining the National Broadband Plan’s consensus with de-competition policy’s major strife.
  • Regressing backwards to a 19th century regulatory paradigm designed for a single technology monopoly (railroads), away from a 21st century competition paradigm for diverse technologies.
  • Halting progress by changing the rules and moving the goalposts mid-game, requiring a complete — regulatory, legal, policy, business, investment, competition, and innovation — do-over.
  • Supplanting technology-neutral policy with industrial policy favoring Google, eBay & Amazon.
  • Ignoring the FCC’s well-known regulatory/legal failures from a decade ago and the consequent bubble speculation and crash they helped cause (CLEC & fiber bankruptcies, dotcom bubble) with no lessons-learned or analysis why new de-competition policy won’t result in déjà-vu.

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2 Responses to “Harms of a Potential New FCC De-Competition Policy — Reply comments to FCC Open Internet NPRM”

  1. I do not want the fcc to control what is read and said on the internet. we have plenty of comments about anything and everything. LEAVE THE INTERNET AS IT IS!!!

  2. Jean Shaffer said

    Just another attempt to move us closer to communism. I don’t trust any governmental agency being run by this administration. If the FCC solely controls the internet, you know that it will be taxed heavily and cost Americans more. Then we will be stuck without any price competition. I don’t want the internet regulated by the government, if I did I would move to China.

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