I Senator Rand Paul, II L. Gordon Crovitz: Obama finds another way to hurt US: Control our Internet!


I Senator Rand Paul, II L. Gordon Crovitz: Obama finds another way to hurt US: Control our Internet!

Kentucky Senator Rand Paul is circulating a petition calling for the Federal Communications Commission (FCC) to scrap its proposed takeover of the Internet, a plan it will vote on Feb. 26.

Feb  09, 2015
By Nick Sanchez

“An unregulated Internet has been the single greatest catalyst in history for individual liberty and free markets on the planet. It has created the greatest revolution since Henry Ford invented the Model T,” Paul said in a Monday email sponsored by the petitioning organization, Protect Internet Freedom.

“Let’s get this straight — technology has progressed because it has been driven by a free and open Internet — not because of DC bureaucrats. This latest attempt to regulate the web threatens to interrupt that positive innovation, set the market back, and kill jobs.”

Paul has long decried the FCC’s attempts to impose so-called “net neutrality” by regulating the business of Internet service providers (ISPs) like Comcast and AT&T.

The Wall Street Journal reported Sunday that the FCC’s previous attempt to create net neutrality was thwarted by a federal judge in 2010. If passed, the new plan will also be challenged in court by ISPs.

“A barrage of litigation which could well wind up in the Supreme Court is sure to follow,” Peter Karanjia, a former deputy general counsel at the FCC, told The Journal.

In its previous attempt, the FCC’s rule making relied on Congress’ 1996 overhaul of the Communications Act of 1934, whereas the current plan relies on the agency’s Title II authority for its legal underpinnings.

The new plan would classify the Internet as a public utility like railroads or water, however FCC Chairman Tom Wheeler said he won’t enact strict provisions like price controls.

“These attempts to regulate the Internet are a direct attack on the freedom of information and an innovative market. The government needs to stay out of the way,” Paul wrote Monday in response.

The Great Internet Power Grab


The Wall Street Journal, Feb. 8, 2015

Last week Washington abandoned open innovation when the chairman of the Federal Communications Commission yielded to President Obama ’s demands and moved to regulate the freewheeling Internet under the same laws that applied to the Ma Bell monopoly. Unless these reactionary regulations are stopped, they spell the end of the permissionless innovation that built today’s Internet.

Until now, anyone could launch new websites, apps and mobile devices without having to lobby a regulator for permission. That was thanks to a Clinton-era bipartisan consensus that the Internet shouldn’t be treated as a public utility. Congress and the White House under both parties kept the FCC from applying the hoary regulations that micromanaged the phone system, which would have frozen innovation online.

Last week’s announcement from FCC Chairman Tom Wheeler rejects 20 years of open innovation by submitting the Internet to Title II of the Communications Act of 1934. Once Mr. Wheeler and the commission’s Democratic majority vote this month to apply Title II, the regulations will give them staggering control. Any Internet “charges” and “practices” that the bureaucrats find “unjust or unreasonable is declared to be unlawful.”

This is an open invitation to entrenched companies challenged by new technologies. The Internet has been a source of creative destruction, upending industries from music, movies and newspapers to retail, travel and banking. History teaches that companies threatened by competition will hire as many lawyers as necessary to get regulators to protect them.

Under Title II, regulators will have the power to invalidate many Internet practices that deliver enormous value to consumers. Today, Amazon has a deal with Sprint enabling Kindle’s rapid downloads of e-books, which competing e-book sellers could claim was “unjust.” The WhatsApp messaging system acquired by Facebook lets people text for free, which traditional mobile phone companies might well consider “unreasonable.” Netflix will regret lobbying for Title II if its competitors object to its special deals that enable its smooth delivery of bandwidth-intensive video.

Under Title II, almost all Web operations will be subject to bureaucratic control. In 2005, the U.S. Supreme Court warned that if the FCC treated the Internet as a telecommunications service, it “would subject to mandatory common carrier regulation all information service providers that use telecommunications as an input to provide information service to the public”—in other words, almost all websites and apps would be subject to regulation.

This means the FCC will be able to decide the “reasonableness” of many websites and services: Regulators could micromanage Google search results on the ground that the company uses “telecommunications” to link to other sites. The FCC could oversee news publishers that link to other news sites or have online advertisements connecting to advertiser websites. Social media such as Facebook and Twitter involve telecommunication services, as do email services from Google and Yahoo .

In anticipation of Title II, BlackBerry is already lobbying the FCC to force Netflix and Apple to offer apps for its phones, which have a small market share.

Mr. Wheeler has promised to “forbear” from some regulations, but once regulators get power, they use it. And if there is any forbearance, there will be litigation from companies seeking to burden their competitors with regulation.

President Obama claims that Title II would boost broadband, but the opposite is true. Today, Google Fiber is the main threat to the phone and cable broadband duopoly. Under Title II, cable and telecom lawyers will be able to press the FCC to declare Google’s business model “unjust or unreasonable.” They can object to Google serving only certain areas. They can say it’s unfair that Google can charge consumers less because it benefits from advertising.

The FCC claims that it is supporting “net neutrality,” but Title II was not designed to keep the Internet free of content discrimination. It actually enforces non-neutrality and fast lanes so long as bureaucrats deem them “reasonable.”

It likely will take the courts into the next presidency to litigate the enormity of this FCC power grab, but the sooner we return to the national consensus against heavy regulation, the better. The culture of American innovation and the freedom of the Internet hang in the balance.

PS Louis Gordon Crovitz is an American media executive and advisor to media and technology companies. He is a former publisher of The Wall Street Journal who also served as executive vice-president of Dow Jones and launched the company’s Consumer Media Group. Crovitz is a Phi Beta Kappa graduate of the University of Chicago. He received a law degree as a Rhodes Scholar from Wadham College of Oxford University and later a law degree from Yale Law School.

Excerpted from: Why Download Europe’s Lousy Broadband Policy?

Treating the Internet like a utility has been tried, with deleterious effects on innovation and costs.

Wall Street Journal, Feb. 11, 2015

Europe has been experimenting with heavy-handed Internet regulation since 2002, and the results are a warning of what the U.S. can expect.

That is the conclusion of a new study by our organization, the Internet Innovation Alliance, a coalition of businesses and nonprofits. Over the past two decades, the U.S. has benefited from a bipartisan, light-touch broadband regulatory regime that has spurred more capital investment, more competition and—perhaps most important—more broadband capacity than in the European Union, which has a larger population and similar economy.

Consider capital investment, without which broadband networks do not exist and cannot be modernized. Fixed-broadband operators in the U.S. invested $137 billion in 2011 and 2012, more than four times Europe’s $31 billion over the same time period. U.S. mobile operators, at $55 billion, invested twice as much as their European counterparts’ $29 billion. Even when the comparison is made as a percentage of industry revenue, the U.S. investment advantage persists.

Europe’s “wholesale-access” regulatory regime, under which fixed operators must make their networks available to competitors at a regulated price, was ostensibly designed to promote competition. Yet in Europe, powerful incumbent carriers hold 65% of the local telephone market, while in the U.S. 59% of the local telephone market is served by new competitors. More than 90% of U.S. households can choose from among 10 or more providers.

The study’s analysis of mobile networks also illustrates how the U.S. offers greater access than Europe to the highest-speed, so-called LTE networks. In 2012 only 30% of European households had access to LTE, while 79% of American households did.

So where does this leave us? Net-neutrality proponents assume that the impact of common-carrier regulations will be minimal and that the U.S. will maintain its technology lead forever, but the European regulatory example suggests that such an outcome is far from certain. It is more likely that imposing regulations crafted for last century’s monopoly telephone service will have a crippling and chilling effect on broadband investment. Investment drives innovation: As the Internet Innovation Alliance study demonstrates, Europe has fallen badly behind the U.S.

Mr. Boucher, a former Democratic congressman from Virginia, is a partner at Sidley Austin LLP and honorary chairman of the Internet Innovation Alliance. Mr. Campbell, formerly chief of the Federal Communications Commission’s Wireless Bureau, is the author of the study discussed in this op-ed.

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