The FCC as Perverted Innovation Czar

by Mike Wendy on January 3, 2011

“The Internet, alas, just became a regulated industry,” lamented WSJ’s L. Gordon Crovitz this morning, “but technologists can minimize the damage by making consumers, who are also voters, as happy as possible.”

I wish I were as optimistic as he after the FCC’s latest affront to the Internet  – that is, the agency’s imposition late last month of controversial new Net Neutrality rules designed “to preserve” the openness of the medium.

The press statement that accompanied their once-hidden rules had it only half-right:

The Internet is a level playing field.  Consumers can make their own choices about what applications and services to use and are free to decide what content they want to access, create, or share with others.  This openness promotes competition.  It also enables a self-reinforcing cycle of investment and innovation in which new uses of the network lead to increased adoption of broadband, which drives investment and improvements in the network itself, which in turn lead to further innovative uses of the network and further investment in content, applications, services, and devices.  A core goal of this Order is to foster and accelerate this cycle of investment and innovation.

Man, the Internet’s a pretty good thing, eh?

Well, maybe not.  Alas, the agency couldn’t leave well enough alone, and settled upon prophylactic regulations to ban blocking; prevent most forms of content “discrimination”; impose service “transparency”; and place question marks around “paid prioritization,” the wireless Internet and “specialized services” all because, well, something bad could happen.  Not that it actually has.  Yet.  But someday, mind you, network providers are gonna’ get uppity, and to prevent that, the gatekeeper who believes it is not – the FCC – has to step in to make sure the trains run on time.

There is no “Moore’s Law” for public policy.  Almost always, rules debated and then created are outdated virtually immediately by technology, habit, and bypass.  The FCC’s new regulations will be no different.  Sadly, however, innovation’s non-linear path will be perverted all because of administrative hubris.

Innovation doesn’t respect “mother-may-I” policies.  I guess that’s the font of Crovitz’s optimism.  Sure.  The FCC thinks it has set itself up as the Internet’s innovation Czar.  But it’s got another thing comin’. Still, the question remains, “Why the need for the new rules, especially when the market works?”  I return to this simple answer: Because the agency could.

Hopefully, consumers – who are also voters – will see this bald power grab for what is and work through Congress to minimize the rogue agency’s deleterious effect on our economy.

Now that’s something I could be happy about.

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