Recently, the chairman of the Federal Communications Commission sent a “National Broadband Plan” to Congress. The supposed goal of the plan is to make America a world leader in broadband and bring 100 megabyte speeds to 100 million American households. The Big Plan is being sold as being “free” to taxpayers since it will supposedly be paid for through the revenue generated from broadcast-spectrum auctions. Of course, if that spectrum were simply sold, the revenues could be used to help close yawning federal deficits.
This all sounds exciting doesn’t it? We’re all for increasing broadband usage and speed at no additional cost, right? I know I sure am!
But, it’s important to point out that Chairman Julius Genachowski is pushing hard for another Big Plan at the FCC – regulating the Internet under so-called “Network Neutrality” rules – which runs diametrically opposed to the stated goals of his National Broadband Plan.
Regulating broadband providers – telling them what they can and can’t do with their networks, and who they can and can’t charge for which services – will mean less investment in broadband. Currently, private-sector investment in broadband runs at about $60 billion a year, even in a down economy. Those massive investments, if the government simply leaves them alone, will lead to just the sorts of upward and outward success for the Internet Genachowski envisions in his National Broadband Plan.
If, however, Genachowski starts regulating broadband providers as if they were “common carriers” (think pre-Internet phone companies) then good luck finding new broadband investment dollars.
Right now, wireline broadband is available to 95 percent of the American population, and when you add 3G wireless, that number goes to 98 percent. Not everyone subscribes to those services, but it’s available. For those in remote areas, Internet speeds of one megabyte per second (20 times faster than dialup, but a third the speed of typical landline broadband) are available through satellite providers who charge about $70 a month.
This covers just about everyone in the country, and all of it happened without any Big Plan from the federal government. It happened because investors were willing to risk hundreds of billions of dollars into capitol-intensive networks in the hope they could recoup those investments by meeting the growing customer demand for broadband.
Compared to this rather stunning feat by broadband providers, do Congress and the Obama administration really think they know best how to invest resources and gauge real customer demand?
Genachowski is a longtime friend and former Harvard Law classmate of President Obama. He was a key Obama campaigner and did much to bring Internet search giant Google (which has sought Network neutrality regulations to ensure profits of its own) into the Obama camp. Whether it is the urge to reward Google and the far-left “netroots” citizens for their campaign support, or a genuine belief in the benevolence and capabilities of government, Obama and Genachowski appear firmly committed to expanding the size and scope of government’s reach into the Internet and the media.
Whatever you think of such strong faith in government, we must all understand that there remain hard tradeoffs between the urge to impose onerous regulations on private broadband providers while demanding those same broadband providers innovate, develop, and expand their services. We cannot expect companies locked in regulatory prisons to be free-market pioneers.
The stubborn fact is that Genachowski’s campaign to impose Network Neutrality regulations on the Internet flies directly in the face of his National Broadband Plan’s campaign to expand and improve the Internet. He can take his pick, but he can’t have both.
Eventually, President Obama and his FCC chairman must confront what the growing protest movement in America is trying to tell them: We cannot tax, borrow, and regulate our way to better health care, better cars, better housing, or in the case at hand, to a better Internet.
Paul Gessing is the president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.