Like a cancerous growth spreading throughout an otherwise healthy body, government overreach, regulation, and control of every aspect of our free-market system continues to expand, infesting and damaging economic activity one organ, or industry, at a time. The Internet, that bastion of freedom and entrepreneurship, is about to become the government’s newest victim.
Federal Communications Commission (FCC) chairman, Tom Wheeler, an Obama appointee, is presenting the president’s “net neutrality” plan for the commission’s vote in two weeks. As promoted publicly by the administration, even on the White House website, the concept sounds meritoriously egalitarian, preventing internet providers from doling out more bandwidth to some paying customers, like Netflix, than others. But it’s clearly designed to facilitate much more.
The administration’s plan calls for reclassification of the Internet, in toto, as a Title II telecommunications service. Such a designation would allow the government to regulate the Internet based on the Communications Act of 1934, just like the telephone industry.
The 332 page proposal has not yet been made public, though the recommendations are widely known. The “net neutrality” proposal wording was enough for one FCC commissioner to conduct a news conference this week to warn the public of the “secret plan to regulate the Internet.” FCC Commissioner Ajit Pai said the plan was even “worse than I imagined,” and will invariably lead to “rate regulation and taxes.”
The full report and recommendation will not be released to the public until after the FCC approves it at their Feb. 26th meeting. FCC Chairman Wheeler must subscribe to the Nancy Pelosi regulatory and legislative mantra, that it has to be passed so we can know what’s in it. Yet another administration slap in the face of “transparency.”
As reported in National Journal, commissioner Pai acknowledged that the actual regulations take up just eight pages of the document. Another 79 pages are citations of the Communications Act, which will also dictate the practices of broadband providers. The rest of the document is a summary of public feedback and reasoning for the FCC’s decision, which Pai said is “sprinkled” with unofficial rules.
According to Pai, about the worst part of the proposal is exercising FCC dominion based on Title II. By implementing “net neutrality” under Title II, regardless of the prima facie reason for the new order, the FCC is “giving itself the authority to determine whether a variety of practices—including prices—are ‘just and reasonable.’” In other words, it’s the camel nose in the tent door metaphor. Pretty soon the camel (government regulators) occupies the tent and the providers are out on their ears.
The evidence seems to be on Pai’s side. He explains specifically, “The plan repeatedly states that the FCC will apply sections 201 and 202 of the Communications Act, including their rate regulation provisions, to determine whether prices charged by broadband providers are ‘unjust or unreasonable.'”
Commissioner Pai cautioned that not only does the proposal “open the door to billions of dollars in new taxes on broadband,” but that with the Title II reclassification, technically the government could exercise control over content, as well.
Current broadband consumption illustrates how ludicrous the proposal is. According to Sandvine data, “in home data consumption is approximately 150 to 200 times greater than mobile consumption. Google (including YouTube) and Netflix account for 45% of fixed broadband traffic. iTunes, Facebook, Amazon and Hulu account for 6% in aggregate. Google and Facebook account for 42% of mobile data. Netflix, Pandora and iTunes take an additional 14%.”
According to the new rules, broadband usage must be shared equally, without allowing providers the ability to adjust for consumption and demand, and other factors. So if you think you’re sick of seeing the spinning “buffering” wheel when watching video online, you “ain’t seen nothin’ yet!” Welcome to the world of net neutrality, a euphemism for broadband socialism – everyone gets their “fair share.”
These are the reasons John Chambers, CEO of Cisco Systems, said, “To go back to a 1950s voice mentality with Title II and net neutrality would be a tremendous mistake for our country… this is a very bad decision. I think the whole country has to rally [against it]. This will cost the country jobs and economic leadership.”
The first step of governmental encroachment into an area of the private sector is always the most crucial. For once the proverbial foot is in the door, they just keep pushing and shoving until the door is clear off the hinges, and they control the industry. We’ve seen it time and time again, from banking, telephony, energy, manufacturing, and most recently, health care insurance. The promises are always minimalist, yet the eventuality always exceeds even extreme expectations. Consequently control increases, costs of production and services increase, and those costs are passed from companies in the private sector down to consumers. And the process always seems most costly and punitive to the middle and lower classes.
Ronald Reagan explained this governmental cycle years ago. “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Except in the case of “net neutrality,” they’re regulating it first, and then will come the taxation, the fees, and perhaps even control over accessibility and content.
We’ve seen just recently how governmental control over private sector services changes an industry dramatically, a la Obamacare. It appears we’re about to see “Obamacare” for the Internet, if the FCC rules go into effect. But don’t worry, they promise us that everything will be just fine. If you like your broadband, you can keep it. That sounds eerily familiar.
Associated Press award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, Idaho and is a graduate of Idaho State University with degrees in Political Science and History and coursework completed toward a Master’s in Public Administration. He can be reached at [email protected].