As the list of candidates entering the 2016 presidential ring continues to grow, so does the “to do” list of policy priorities for pro-growth conservatives. Chief among them is to enable the expansion of the technology, media and telecommunications sectors—specifically how to (or how not to) regulate them.
Earlier this summer, the curtain came down on the greatest deregulatory success story of all time, the Internet, when the Federal Communications Commission (FCC) voted along party lines to regulate the Net like an old-fashioned phone monopoly under Title II of the 1934 Communications Act. The heavy-handed ruling has reclassified broadband service as a public utility—effectively equating the dynamic Net to our water or sewer systems.
Net regulation proponents originally sold their elixir as necessary to keep the Internet “open and free” by preventing Internet service providers (ISPs), like your cable or phone company, from blocking or slowing Web sites and apps. Over the past decade, however, activists massively expanded the goals of their movement to include economic regulation of the Internet sector. Undeterred by U.S. courts throwing out the previous two sets of FCC rules, the regulate-the-Net movement manufactured new pretexts and forged ahead to convince President Obama to personally call for the FCC to impose Title II on the Internet—a radical departure from Clinton-era light-touch policies and a clear loser for technologists and consumers.
Trouble is, nothing was ever broken that needed “help” from Washington. The free market was working just fine and consumers were protected by existing laws. But that didn’t stop the imposition of an ideology that throws the Internet into a “Way Back Machine” that transports it to the days of the black rotary-dial phone and will deter investment.
In a recent study published by Georgetown University’s McDonough School of Business, economists Robert Shapiro and Kevin Hassett found that the FCC’s decision to classify broadband as a Title II telecom service will decrease capital investment from at least about 5.5 percent to as much as 20.8 percent. An earlier report from the center-left Progressive Policy Institute determined that Title II regulation could trigger state and local regulations, taxes and fees costing consumers “a whopping $15 billion” a year. And that’s “on top of the adverse impact on consumers of less investment and slower innovation that would result.”
Fortunately for consumers—and for the future of the Internet—a solution still exists. Instead of what will unquestionably be years of legal battles, as we’ve seen following the last two attempted net neutrality regulations, Congress can jump start the bipartisan spirit that shaped Internet policy since its inception. Draft bills have already been written and the potential for a deal exists. The regulate-the-Net crowd is starting to realize that the FCC order was so poorly reasoned that it is likely to be tossed out by the courts — making a perfect hat trick of defeats for the FCC on this issue.
As I’ve said in the past, having close contact, and even coordination, between the FCC and congressional offices is a way of doing business that is as old as the Commission itself. In fact, such communications are a necessary and proper part of being an FCC commissioner or chairman. The FCC is a creature of Congress and is overseen and funded by those directly-elected representatives of the American people. What should raise eyebrows is when the FCC pulls up the drawbridge and crouches in the bunker to avoid, or work around, Congress.
With legislative intervention, the FCC can be protected by legislative certainty and bask in the glow of achieving statesmanlike bipartisan consensus. The future of the Internet, and America’s digital economy, deserve no less.
It’s time to consider a different path—one that leads through Congress—to end the net-neutrality fiasco. Although the legislative process can be perilous, Congress can provide all sides with a way out.
Robert McDowell served as a commissioner of the FCC from 2006-2013. He is a partner at Wiley Rein LLP and a senior advisor to Berenson & Co.
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