Liberals Mugged by Obamanet
Buyer’s remorse is already setting in for Google and other ‘net neutrality’ proponents.
Mr. Schmidt is not the only liberal mugged by the reality of Obamanet, approved on party lines last week by the Federal Communications Commission. The 300-plus pages of regulations remain secret, but as details leak out, liberals have joined the opposition to ending the Internet as we know it.
The Progressive Policy Institute said: “There is nothing progressive about the FCC backsliding to common carrier rules dating back to the 1930s.” The Internet Society, a net-neutrality advocate, said: “We are concerned with the FCC’s decision to base new rules for the modern Internet on decades-old telephone regulations designed for a very different technological era.” Former Clinton official Larry Irving wrote in the Hill: “Most of today’s proponents of a utility model for the Internet either have forgotten or never knew the genesis of the ‘regulatory restraint’ model that helped spur and continues to support Internet expansion.”
Verizon poked fun at the FCC’s retrograde move by issuing a news release in Morse code and in an old-fashioned typewriter font, dated “February 26, 1934,” the year Congress passed the Communications Act to regulate the telephone monopoly—the law the FCC is now applying to the Internet.
FCC Chairman Tom Wheeler justified Obamanet by saying the Internet is “simply too important to be left without rules and without a referee.” He got it backward: Light-handed regulation made today’s Internet possible.
What if at the beginning of the Web, Washington had opted for Obamanet instead of the open Internet? Yellow Pages publishers could have invoked “harm” and “unjust and unreasonable” competition from online telephone directories. This could have strangled Alta Vista and Excite, the early leaders in search, and relegated Google to a Stanford student project. Newspapers could have lobbied against Craigslist for depriving them of classified advertising. Encyclopedia Britannica could have lobbied against Wikipedia.
Competitors could have objected to the “fast lane” that Amazon got from Sprint at the launch of the Kindle to ensure speedy e-book downloads. The FCC could have blocked Apple from integrating Internet access into the iPhone. Activists could have objected to AOL bundling access to The Wall Street Journal in its early dial-up service.
Among the first targets of the FCC’s “unjust and unreasonable” test are mobile-phone contracts that offer unlimited video or music. Netflix , the biggest lobbyist for utility regulation, could be regulated for how it uses encryption to deliver its content.
Until Congress or the courts block Obamanet, expect less innovation. During a TechFreedom conference last week, dissenting FCC commissioner Ajit Pai asked: “If you were an entrepreneur trying to make a splash in a marketplace that’s already competitive, how are you going to differentiate yourself if you have to build into your equation whether or not regulatory permission is going to be forthcoming from the FCC? According to this, permissionless innovation is a thing of the past.”
The other dissenting Republican commissioner, Michael O’Rielly, warned: “When you see this document, it’s worse than you imagine.” The FCC has no estimate on when it will make the rules public.
The silver lining is a valuable lesson for Silicon Valley executives who thought it was safe to lobby for net neutrality, but instead got Obamanet: The only place on the Internet for Washington regulators is at arm’s length.
