Tag Archives: Net Neutrality

News

New study: stronger net neutrality laws are a tax on Internet use

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The leftist Washington Post reports on a new study which counts the cost of the Obama administration’s proposed “net neutrality” policies.

Excerpt:

[A] new study suggests that strong controls on Internet providers might force Americans to pay more for their Internet, anyway.

Internet service providers would be subject to more than $15 billion a year in new fees if the Federal Communications Commission decides to start regulating them with Title II of the Communications Act — the same tool the agency uses to police telephone service, according to Hal Singer and Robert Litan, two economists who support less-aggressive net neutrality rules. And those charges, they say, would inevitably be passed along to you.

Regulating broadband under Title II would allow federal, state and local governments to collect the same fees from ISPs that they already levy on phone companies. Among these are a “universal service” fee that was established decades ago to help ensure everyone in the country had access to telephone service.

In a paper published by the Progressive Policy Institute, Singer and Litan argue that these and other charges stemming from various state and local rules could add $84 or more to a U.S. household’s yearly Internet bill.

“Although the state and federal governments collect these fees from broadband providers,” Singer and Litan write, “history shows — and economic models of competitive markets predict — that the fees are passed along to customers, just as they are now on telecommunication services. So consumers’ Internet bills will soon have all those random charges tacked on at the end, much like they see on their phone bills.”

The study is the latest effort by opponents of strong net neutrality rules to describe the potential economic fallout of regulating ISPs under Title II. Last month, telecom lobbyists argued to the FCC that aggressive regulation would slow down the pace of industry investment in network upgrades, to the tune of $45 billion over the next five years.

And there is this from the Heartland Institute, a free-market think tank:

On June 17, FCC Chairman Julius Genachowski pushed through a 3-2 vote along party lines to begin his agency’s process of reclassifying broadband Internet access under a more restrictive regulatory regime known as Title II. Once the Internet is reclassified as a telecommunications service rather than an information service under Title I, the FCC will have seized the power necessary to micromanage the vibrant medium we take for granted.

Numerous studies have found FCC enforcement of net neutrality rules would harm the digital economy and consumers. The research on net neutrality points out regulation would stifle innovation and impose costs that would be passed on to consumers. Study after study finds net neutrality is an attempt to fix a “market failure” that doesn’t exist.

A recent study from New York University concluded net neutrality would cost Americans 500,000 jobs and $62 billion over the next five years. The international market research firm Frost & Sullivan found net neutrality regulations would likely pass on to the consumer up to $55 per month in additional costs. These and other studies show a hands-off approach to Internet regulation maximizes social and economic welfare.

The rest of the Heartland post links to studies that discuss the impact to the economy and to consumers of these net neutrality laws.

Commentary

A great article that explains what is at stake with “net neutrality”

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From the American Spectator. (H/T ECM)

Excerpt:

Yet, without compelling reason, law or even politics on their side, on December 21, on a 3-2 party line vote, the FCC voted to impose its “net neutrality” rules on the Internet. What net neutrality means is that the government now has the power to decide how ISPs and broadband operators manage the access they provide to the Internet. It is as if the government decided to regulate how FedEx delivers its overnight mail, and what routes and what vehicles they use.

The FCC starts out by proclaiming that its net neutrality rules are just meant to ensure equal access by all to the Web. But as George Orwell showed us, that is how socialism started out too, until we later discovered that some were more equal than others. Once the founding principle is laid for government regulation and control, then that power can be used to regulate and control access to the Internet “in the public interest.” In English translation, that means in the special interest of the Ruling Class. There are precedents in China and Iran for how that has worked out in practice.

Dissenting FCC Commissioner Robert McDowell explained further in the Wall Street Journal on December 20 why the FCC’s net neutrality regulation makes no sense:

Nothing is broken and needs fixing, however. The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s. Its nature as a diffuse and dynamic global network of networks defies top-down authority. Ample laws to protect consumers already exist. Furthermore, the Obama Justice Department and the European Commission both decided this year that net neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure.

But what I have learned in life is that when something doesn’t make sense, that means there is something else behind it that people are trying to hide.

And that is exactly what we have here. For what is behind the FCC’s net neutrality crusade is reflected by an organization calling itself Free Press. That is an Orwellian title in this case, because what Free Press is for is the opposite of a free press. Free Press is one of those pseudo-Marxist front groups that Barack Obama has always traveled with so easily throughout his life. It is a grown-up, slick, sophisticated version of those campus radicals who shout down college speakers with whom they don’t agree.

That is what Free Press is after with its “net neutrality” regulation. It is laying the groundwork for government control of the Internet. Once that it is established, it will be able to shout down websites with which it doesn’t agree, if not shut them out altogether.

The entering wedge for net neutrality so far is not public freedom to access and navigate the Internet, which no one can credibly claim is not currently as free as could be. The entering wedge for now is use of Internet access and broadband services by competing commercial concerns like Netflix and YouTube, which consume huge proportions of bandwidth that can consequently interfere with use by consumers and others.

The problem has not become unmanageable yet, but threatens to be. The concern is that broadband operators will limit use of their service by other commercial operations that are effectively bandwidth hogs, to preserve the viability of their service for the general public, which is exactly what they should do. The supposed purpose of net neutrality regulation so far is to prevent broadband operators from doing this.

The solution is for broadband operators to charge heavier commercial users of their service heavier fees to cover the costs. Those heavier fees can then be used to build even bigger and better broadband and Cyberspace access, sufficient to fully accommodate even the heaviest commercial broadband users.

But that [solution] doesn’t involve the expanded government power that Obama’s FCC and net neut advocates like Free Press are after. So it is not on the table as the answer. Government takeover is the only answer they will consider, just as in health care. But if the government is going to take control over the big investment bucks broadband providers put in the ground or into orbit, America is not going to get the Internet investment and access it needs. That is why America’s Internet access is already lagging behind other countries.

[…]This FCC episode raises a broader question about the Obama Administration in the next two years. Because what we see here is what we are already seeing elsewhere in the Administration as well, from HHS Secretary Sebelius’s takeover of health insurance, to the EPA’s takeover of the economy based on global warming fantasies. That broader question is: Are we going to be governed by democracy and the rule of law in America, or not?

Worth reading. I am trying to write about the problems in Obamacare and with the EPA raising energy costs on American consumers and businesses. But taking over the Internet could be an even bigger disaster if the government can prevent the truth about what they are doing from being reported.