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May 17th, 2017 11:41 am
Former FCC Commissioner: “The FCC Gets Set to Free Wireless”
Posted by Timothy Lee Print

In today’s Wall Street Journal, former Federal Communications Commission (FCC) commissioner Robert McDowell offers a timely and instructive commentary entitled “The FCC Gets Set to Free Wireless,” in which he explains the important work by new FCC Chairman Ajit Pai:

The Federal Communications Commission this month is launching initiatives that will shape the fate of America’s wireless industry.  Last week it started to examine competition in the market, and this week it will propose taking Depression-era utility regulations off mobile broadband while protecting an open internet.  This is only the beginning.  The FCC is acting on a rare opportunity to correct its recent mistakes and restore the Clinton-era light-touch regulatory framework that will drive economic growth and job creation.”

As we at CFIF have detailed, the internet flourished over two decades like no other innovation in human history, precisely because of the light-touch regulatory approach started under Clinton as McDowell notes, and continued through the Bush Administration.  But in 2015, Obama’s FCC under former Chairman Tom Wheeler decided to “fix” an internet that wasn’t broken by regulating it as a “public service” under the 1930s copper-wire telephone laws that McDowell references.  As Chairman Pai recently noted, domestic broadband capital expenditures fell for the first time ever outside of a recession.

McDowell notes how the mobile industry experienced “an explosion of entrepreneurial brilliance,” incredible innovation in just a few short years, massive investment, falling consumer prices (25% in the past decade) and arrival of the app economy.  Importantly, he highlights that, “Three quarters of the companies in the global app economy are American.”  Unfortunately, the Obama FCC’s rush to commandeer yet another sector of the U.S. economy imposed an unnecessary threat to that innovation:

Yet since 2009, the FCC has ignored its own studies and refused to determine that the market is competitive. That would have contradicted the rationale for its regulation binge, but new political and market realities make a fresh start possible.”

Fortunately, new leadership under Chairman Pai offers the opportunity to correct that mistake before the harm intensifies:

The FCC should begin by liberating wireless from the heavy-handed rules of a 1934 law called Title II, which was created when phones were held in two hands.  This antiquated law imposes powerful economic regulations on the internet, chilling investment in broadband.  On Thursday the FCC will propose to unshackle the net from this millstone of a law.  This would restore the bipartisan light-touch policies that nurtured the burgeoning internet Americans enjoy today.”

It’s unfortunate that a federal bureaucracy decided in its wisdom that regulating the thriving internet as a “public utility” under a 1934 law was a good idea in the first instance.  But as McDowell cheerfully notes, the opportunity to prevent further harm and restore the innovation and investment that characterized internet service for over two decades is here.  For that we should thank Chairman Pai and support his common-sense restoration of regulatory sanity at the FCC.

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