Freedom Line Blog

In an interview with CFIF, Thomas W. Hazlett, professor of law and economics at George Mason University and former chief economist of the FCC, discusses the ramifications of the recent Senate vote to reject an attempt to overturn the FCC’s net neutrality rules and his recent Encounter Books Broadside titled, “The Fallacy of Net Neutrality.”

Listen to the interview here.

If you need another reason to hope for a Republican majority in the U.S. Senate next fall, here you go: a resolution to overturn net neutrality — the Obama Administration’s attempt at a government takeover of the internet — failed today in the upper chamber by a narrow vote of 52-46 (it had previously passed in the House, 240-179).

Of the Republicans who fought the good fight, none put the issue in as sharp relief as Florida freshman Marco Rubio. This a man who gets the bigger picture, as the Daily Caller reports:

“The FCC and the federal government cannot keep pace with the Internet and the technology industries, and the government should not attempt to catch up through regulation or legislation,” said Rubio.

“And that’s an important point. We are asking this government, we are asking this bureaucratic structure which struggles to keep pace with issues we have been facing for the last 20 years, to somehow keep pace with issues and the technology and the innovations that arrive in the Internet world. Not only do I think that is asking too much, I think it’s impossible.” 

Rubio is right on the money, sounding the same cautionary note that CFIF’s Timothy H. Lee has repeatedly emphasized. America has had no more dynamic sector of the economy in the last two decades than the internet, a development that would have been impossible without a relatively light hand from the federal government. If Washington gets in the driver’s seat, we should expect the same results that have characterized government involvement in everything from health care to postal service to education: lower quality at higher prices with less convenience. It’s a Wi-Fi world and we’re handing off the internet to a dial-up government.

According to a new poll from Gallup, Americans rate the “Computer Industry” most positively among 25 business and government entities, with the “Internet Industry” close behind.  That’s no surprise – few innovations in human history have transformed our lives as rapidly and profoundly as the tech sector.

But here’s an irony.  The federal government, which constantly interferes with tech sector innovation via such bureaucratic assaults as so-called “Net Neutrality” and interference with the private proposed merger between AT&T and T-Mobile, is rated least favorably by Americans.  Only 17% of Americans rate the federal government positively, which 63% rate it negatively.  In contrast, the computer industry is rated positively by a 72% to 10% margin, and the Internet industry is rated positively by a 56% to 16% ratio.

Perhaps we’d all be better off if the tech sector began monitoring the federal government, rather than the converse.  It certainly appears that most Americans would agree.

Six months ago this coming Tuesday, the Federal Communications Commission (FCC) and its Chairman Julius Genachowski – Barack Obama’s old comrade and Harvard Law School classmate – hastily imposed the infamous and deceptively-named “Net Neutrality” regulations.  Just days before Christmas and fresh off the Administration’s effective takeover of the automobile, banking and healthcare sectors, Genachowski and his two fellow Democrat Commissioners rammed those regulations through against the wishes of (1) a solid majority of Americans, (2) a rare bipartisan Congressional majority and (3) a unanimous U.S. Court of Appeals for the D.C. Circuit, which declared the FCC’s “Net Neutrality” effort illegal mere months earlier.

The FCC’s maneuver move marked the first time in history that the federal government appointed itself authority to micromanage how Internet service providers operating in the ostensibly free market could and could not operate their own private networks.  Never mind, of course, the years and hundreds of billions of dollars in private investment required to build out and maintain those private networks – desperately-needed investment that continues to create rapid innovation and well-paying jobs.

The FCC’s illegal and unwise “Net Neutrality” regulations immediately jeopardized those billions of investment dollars, and will continue to do so should they somehow withstand judicial scrutiny.

Now, making things even worse, as the bare one-person Democratic majority moves full speed ahead with unnecessary and counterproductive Internet regulations on both wired and wireless Internet networks, Chairman Genachowski appears to be playing games by dragging his feet in order to obstruct the lawsuits and legislation to repeal the FCC’s unauthorized “Net Neutrality” rules.  Specifically, Chairman Genachowski appears to be delaying the publication of the FCC’s order in the Federal Registry to go forum-shopping and avoid the U.S. Court of Appeals for the D.C. Circuit where the FCC lost last year and will likely lose again.

Thus, just like Obama’s Environmental Protection Agency (EPA) and National Labor Relations Board (NLRB), the FCC has become a rogue government agency willing to act beyond its statutory authority to commandeer both the wired and wireless Internet.  As our economy and employment market continue to struggle, now is the time for us to stop the Obama FCC’s rogue effort via the courts and Congress.

Quote of the day from The Wall Street Journal’s L. Gordon Crovitz, writing in his weekly “Information Age” column:

In high-tech, by the time the political and legal systems catch up to an issue, the issue is moot.”

Whether anti-trust, so-called “Net Neutrality,” public broadband endeavors, wireless data roaming mandates or anything else, you can always count on bureaucrats to be a day late and a dollar short.  Are you paying attention, FCC?

One would think the Federal Communications Commission (FCC) had learned its lesson by now.

In the past calendar year, the FCC’s extralegal power grabs have brought judicial rebuke from a unanimous Court of Appeals for the D.C. Circuit, widespread public opposition and rare bipartisan Congressional condemnation.  But instead of internalizing those lessons, the FCC has once again endeavored beyond its legal authority by voting to impose data roaming mandates on private wireless carriers.  In a correspondence to the FCC, CFIF set forth the ways in which its latest rogue action is not only without legal foundation, but also unwise as a matter of public policy.

First, Section 332 of the Communications Act explicitly states that private mobile service providers “shall not be treated as a common carrier for any purpose under this Act.”  By  requiring wireless providers to forcibly enter agreements with other wireless carriers and allow non-customers to roam on their data networks, the FCC has violated that express provision. 

Second, a vibrant market for data roaming agreements already exists, meaning that this FCC action is unnecessary.  Carriers large and small already engage in very high rates of partnership, including Rural Cellular Association (RCA) members.  These agreements cover 3G and even 4G networks, contrary to extremists’ claims.  Indeed, numerous smaller carriers currently advertise nationwide broadband data coverage despite possessing relatively narrow license areas, meaning that they already have secured data roaming agreements.  Further, the prices negotiated in roaming agreements continue to decline. 

Third, the FCC’s bureaucratic intrusion into this realm will have the perverse effect of discouraging new investment and job creation in this cutting-edge sector.  After all, the FCC’s mandates will create incentives to piggyback on other networks rather than invest in new ones.  Carriers must be able to differentiate themselves and compete against counterpart carriers in the free market, which the FCC’s proposed mandates will undercut.  As data use continues to increase and smart phones impose new demands on network capacity, the inevitable result will be congestion, delay, fewer jobs and less investment.

Today’s FCC vote thus exceeds its legal authority and undermines new investment, while ignoring the fact that data roaming agreements are already prevalent.  It merely provides the latest evidence that the rogue FCC must be brought back to Earth, whether via Congress or the courts.

In this week’s “Freedom Minute,” CFIF’s Renee Giachino makes the case for conservative optimism.  Giachino points to the continued public backlash against ObamaCare, the growing movement against government excess, and widespread opposition to Cap-and-Trade and Net Neutrality, among other big government regulations, as evidence that the nation is committed to restoring to America’s founding limited-government principles.

Yesterday, the new House of Representatives took another step to make good on its campaign promises last fall to the American people.

The House Energy & Commerce Committee, by a 30 to 23 vote, approved a resolution prohibiting Obama’s rogue Federal Communications Commission (FCC) from imposing so-called “Net Neutrality” on the nation’s Internet sector. This follows last week’s 15-8 vote by the Communications and Technology Subcommittee on the same issue. The FCC doesn’t possess the legal authority to regulate the Internet via “Net Neutrality” in the first instance, as a unanimous court of appeals ruled last year.  Further, Americans oppose this sort of Internet regulation by a solid two-to-one margin, and a rare bipartisan majority of 300 from Congress has formally instructed the FCC against pursuing this lawless course.  Ignoring all of that, the FCC rammed through “Net Neutrality” by a partisan 3-2 vote in December.

Big-government activists claim that “Net Neutrality” is somehow necessary to prevent Internet service providers, who invest the tens of billions of dollars necessary to create the networks on which the Internet passes, from blocking various websites or maliciously discriminating in Internet traffic.  But they cannot explain why that hypothetical epidemic of blockage has never occurred despite two decades of explosive Internet growth in our lives.  And with good reason – any service provider that did so would quickly find itself out of business due to irate customers.  But never mind that.  What are facts, after all, against the desire to add yet another sector of the American economy to the Obama Administration’s regulation?

Fortunately, Americans know better.  And just as fortunately, Congress and the courts are doing something about it.

As we predicted from the start, so-called “Net Neutrality” continues down its path toward inevitable defeat.

Today, the House Energy and Commerce Communications and Technology Subcommittee voted by a lopsided 15-8 margin to overturn the rogue effort by Obama’s FCC to add the Internet to the Administration’s laundry list of commandeered industries.  The American public opposes “Net Neutrality” Internet regulation by two-to-one margins, a court of appeals unanimously ruled it beyond the FCC’s proper authority and a bipartisan group of 300 members of Congress instructed the FCC to refrain from this abusive effort.  Despite those realities, the FCC arrogantly voted in December to impose “Net Neutrality,” just as the Obama Administration seeks to impose card check, carbon cap-and-tax and other unpopular schemes via unaccountable and unelected federal agencies.

Today’s resolution will now proceed to the full House Energy and Commerce Committee, and a similar legislative effort to overturn “Net Neutrality” is underway in the Senate.  Meanwhile, a lawsuit proceeds in the same court that last year overturned “Net Neutrality,” meaning that the only question now is whether this ill-advised bureaucratic overreach will meet its end legislatively or judicially.  Either way, it can’t come soon enough for investors in our nation’s critical Internet sector.

Two months ago, when Obama’s Federal Communications Commission (FCC) passed its “Net Neutrality” proposal by a partisan 3-2 margin, we guaranteed that it would inevitably be defeated via legislation, the courts or both.

Sure enough, last month Verizon Communications challenged the FCC’s rogue vote in the U.S. District Court of Appeals for the D.C. Circuit, the same court that unanimously ruled last April that the FCC doesn’t possess lawful authority to impose Net “Neutrality.”  Now this week, both the House and Senate introduced resolutions to repeal the FCC’s rogue action.  The resolutions were introduced pursuant to the Congressional Review Act, which allows Congress to review and overrule federal agency regulations via simple majority.  Importantly, such resolutions are not subject to normal Senate filibuster hurdles.

“Net Neutrality” constitutes a destructive and illegal federal intrusion into the Internet, which has managed to flourish just fine over the past two decades without Obama Administration micromanagement, thank you very much.  The American public opposes it by a 2-to-1 margin, courts have rejected it unanimously and Congressional opposition is bipartisan.  While “Net Neutrality’s” demise is a matter of when, not if, it is still absolutely critical that we as citizens maintain our resolve to spare the Internet sector from becoming bureaucrats’ tech version of ObamaCare.

Last month, President Obama’s Federal Communications Commission (FCC) voted by a partisan 3-2 margin to regulate Internet service via Net “Neutrality.”  On that date, we predicted,”The FCC’s reckless effort to regulate Internet traffic will now begin a slow death march to ultimate defeat from legal challenges and Congressional action.”

Exactly one month later, the judicial front in that battle is underway.

Yesterday, Verizon Communications challenged the FCC’s rogue vote in the U.S. District Court of Appeals for the D.C. Circuit.  That’s the same court that unanimously ruled last April that the FCC doesn’t possess lawful authority to impose Net “Neutrality,” but the FCC defiantly pressed ahead despite that unequivocal ruling.  In so doing, the FCC also defied 2-to-1 public opposition and a bipartisan group of 300 from Congress.  Obama took to the pages of The Wall Street Journal this week to profess a new commitment to regulatory restraint in pursuit of a healthier economy, job creation and more humble federal government.  But his own FCC belies that supposed commitment with its Net “Neutrality” agenda.

Leaders of the new 112th Congress have also committed to overturning the FCC’s destructive attempt to regulate Internet service.  Whether the demise of Net “Neutrality” comes legislatively or judicially, it can’t come soon enough for American consumers, investors and employers.

The nation’s capital is abuzz today over President Obama’s Wall Street Journal commentary, “Toward a 21st Century Regulatory System.” Astonishingly, Obama actually praises America’s free market system as “the greatest force for prosperity the world has ever known” while promising regulatory reform:

I am signing an executive order that makes clear that this is the operating principle of our government.  This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth.  And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive.  It’s a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.”

Whether Obama speaks honestly, or simply seeks to deceive the electorate in anticipation of 2012, lies beyond our powers of divination.  The available evidence, however, justifies extreme skepticism.

One cause for doubt stands out immediately.  In identifying examples of the federal regulatory state run amok, the best Obama can do is point to saccharine, saying that the Food and Drug Administration (FDA) permits it for consumption in coffee while his Environmental Protection Agency (EPA) labels it a “dangerous chemical.”  That’s it?  That’s the best example he can cite?

Just one month ago, Obama’s own Federal Communications Commission (FCC) flagrantly defied two-to-one public opposition, a unanimous Court of Appeals and a bipartisan group of 300 members of Congress by voting to regulate the Internet via “Net Neutrality.” Obama claims in his column that he aims to prevent “regulations that stifle job creation and make our economy less competitive,” but that’s exactly what “Net Neutrality” will do.  The FCC seeks to regulate an Internet sector that has thrived over the past two decades precisely because the federal government has refrained from interfering with regulations such as this.  The result will be fewer incentives for continued Internet investment, expansion and innovation, as well as declining service as capacity fails to keep pace with demand.

Additionally, Obama’s Labor Department seeks to impose “card check,” which will end secret ballot voting in union elections, and his EPA seeks to impose global warming carbon cap-and-tax regulations.  Both of those agenda items failed miserably in Congress even when controlled by Democratic supermajorities, but Obama’s regulatory agencies now seek to impose them anyway.

So Obama talks a good game in today’s op/ed.  But unless he issues an immediate cease-and-desist order on “Net Neutrality,” card check and cap-and-tax, his words will prove just as meaningless as his other broken promises.

Just prior to the Christmas holiday, the FCC on a 3-2 party line vote approved so-called “Net Neutrality” regulations on the Internet.  It did so in the face of overwhelming opposition by the American people, a bipartisan majority in Congress and in defiance of a ruling by the federal courts.  

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez on the issue.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

The Wall Street Journal’s L. Gordon Crovitz just puts on a clinic on tech policy each Monday with his weekly “Information Age” column.  Today is no exception.  Entitled “Tech Resolutions for the New Year,” Crovitz directs his first resolution toward Chairman Julius Genachowski and the Obama Federal Communications Commission (FCC) that has again defied public opinion, a unanimous D.C. Court of Appeals and a bipartisan Congressional majority with last month’s “Net Neutrality” resolution:

For Julius Genachowski, FCC Chairman:  Focus on competition, not regulations, lobbyists and lawyers.  By a partisan 3-2 vote, the Agency just before the holidays issued a plan to regulate the Internet.  The claim is ‘net neutrality,’ but throughout the 194-page order the reality is vague standards such as ‘reasonableness.’  This uncertainty creates a ‘regulator-may-I?’ approach to innovation and ensures years of litigation for a vital industry that evolved freely.  The real problem remains a lack of broadband competition, caused by government grants of monopolies and duopolies.  As open source guru Lawrence Lessig recently argued in Newsweek, the FCC should be replaced with regulators whose mission is ‘minimal intervention to maximize innovation.'”

Good advice.  Crovitz’s weekly commentaries are a must-read – especially if your name is Julius Genachowski.

So let’s review:

The Internet revolution has brought us a level of innovation and prosperity unprecedented in human history.

Throughout two decades spanning both the Clinton and Bush administrations, deregulation has provided the fertile ground for private investment and productivity measured not in the billions, or even hundreds of billions, but in the trillions.

On that basis, the public opposes federal Internet regulation by a two-to-one margin.

Further, a unanimous D.C. Court of Appeals rejected Federal Communications Commission (FCC) authority to impose “Net Neutrality” just eight months ago.

Finally, a rare bipartisan coalition of 300 members of the House and Senate have admonished the FCC against its rogue “Net Neutrality” scheme.

So what does the unelected FCC do?  Learning nothing from the Administration’s ObamaCare fiasco, it moves full speed ahead with its hyperpartisan “Net Neutrality” agenda by a party-line 3-2 vote anyway.  As dissenting (i.e., sober) FCC Commissioner Meredith Attwell Baker summarizes, the FCC’s intervention threatens the future of the Internet:

The rules will give government, for the first time, a substantive role in how the Internet will be operated and managed, how broadband services will be priced and structured, and potentially how broadband networks will be financed.  By replacing market forces and technological solutions with bureaucratic oversight, we may see an Internet future not quite as bright as we need, with less investment, less innovation and more congestion.  Discouragingly, the FCC is intervening to regulate the Internet because it wants to, not because it needs to.”

The FCC’s reckless effort to regulate Internet traffic will now begin a slow death march to ultimate defeat from legal challenges and Congressional action.  In the meantime, unfortunately, the cost will be even more uncertainty at a time when our economy cannot afford it.

This week, the Battelle Memorial Institute reported that China will surpass Japan in 2011 as the second-largest spender on research and development, spending $154 billion to Japan’s $144 billion.  An interesting milestone, perhaps, but that should be kept in its proper perspective.  Specifically, that the United States still spends well over twice as much on R&D – over $405 billion in 2011.  That’s significantly more than China and Japan combined.

This isn’t merely esoteric or trivial.  To the contrary, it’s important to keep in mind at a time when naysayers here and around the globe question America’s continuing leadership role, and threaten to undermine American preeminence via regulations such as “Net Neutrality” and other big-government “solutions” in search of imaginary problems.

Remember how ObamaCare was furiously crafted behind locked doors, despite Obama’s assurances it would be “on C-Span?”  The public revolted against those tactics, but Obama’s Federal Communications Commission (FCC) apparently thought it all went pretty well.  Look no further than its secrecy in concocting its latest “Net Neutrality” draft, despite FCC Commissioner Julius Genachowski’s own promises of “transparency.”

In this way, “Net Neutrality” imitates ObamaCare beyond the broader fact that it seeks to commandeer 1/6 of the American economy.  Like ObamaCare, it is strongly opposed by the public and judicially suspect, and proponents know that exposing its manufacturing process to the sunlight would only help doom it.  Accordingly, Chairman Genachowski appears intent on concealing his “Net Neutrality” proposal as long as possible before dumping it on the public later this month.

Why all the secrecy?  What do Chairman Genachowski and “Net Neutrality” proponents fear so much?  Instead of secrecy, they should follow Commissioner Meredith Attwell Baker’s call to immediately make the draft public.  Apply the same “openness” that you claim to desire for the Internet, Chairman Genachowski.

By a two-to-one margin, Americans reject “Net Neutrality” Internet regulation efforts.  A unanimous Court of Appeals has rejected the FCC’s claim to authority to impose it.  Bipartisan groups of Congressional Democrats and Republicans have written letters to the FCC explicitly opposing it.

So how does Obama’s FCC react in the face of these unequivocal signals?  Apparently, by steering full-speed ahead to impose it anyway.

For those still unfamiliar with “Net Neutrality,” it is very simply a far-left effort to regulate Internet service.  Yes, the same Internet that has prospered to date and revolutionized our lives precisely because of the absence of big-government regulatory interference allegedly needs to be “fixed” by “Net Neutrality” regulation.  One need only consider the forces that favor “Net Neutrality” to recognize its destructiveness.  Chief among those activist forces is Free Press, whose founder Robert McChesney unapologetically advocated a government takeover of the Internet to something called the “Socialist Project“:

What we want to have in the U.S. and in every society is an Internet that is not private property, but a public utility.  We want an Internet where you don’t have to have a password, and that you don’t have to pay a penny to use.  It is your right to use the Internet.”

Simply put, “Net Neutrality” is ObamaCare for the Internet.  Please take a moment to contact your Representative and Senators to demand that they stop the rogue FCC from suffocating private Internet investment and innovation with its toxic “Net Neutrality” agenda.

This week’s edition of the Liberty Update, CFIF’s weekly e-newsletter, is out. Below is a summary of its contents:

Lee:  2012 May Be Even Brighter for Conservatives Than 2010
Senik:  Four Surprising Lessons from the Midterm Elections
Ellis:  Election Results for Candidates Profiled by CFIF
Release:  2010 Midterm Elections: Net Neutrality Winners and Losers

Freedom Minute Video:  The Way We Were: A Look Back at Liberal Rule, 2009-2010
Podcast:  International Author Shares Diary from World War II
Jester’s Courtroom:  How Not To Rob a Bank

Editorial Cartoons:  Latest Cartoons of Michael Ramirez
Quiz:  Question of the Week
Notable Quotes:  Quotes of the Week

If you are not already signed up to receive CFIF’s Liberty Update by e-mail, sign up here.

A group calling itself the “Progressive Change Campaign Committee,” which sounds so 2008 and even employs the same font and shade of blue as Obama’s “Organizing for America” page, is attempting to portray a false consensus in favor of new federal Internet regulation.

The group trumpets its success in getting 95 Democratic House and Senate candidates to sign a pledge favoring Internet regulation via so-called “Net Neutrality.”  But notice an interesting thing about those 95 candidates.  Namely, not a single one is in a race labeled “Solid Democrat,” “Likely Democrat” or even “Lean Democrat” by the Cook Political Report.  Not one.  Of the 95, 79 are in races labeled “Solid Republican,” with 11 in either “Likely Republican” or “Lean Republican,” and only five in races even labeled “Toss Up” by Cook.

In other words, this pledge is a “Hail Mary” by desperate candidates and Internet regulation advocates.  It also reflects the fact that significant majorities of Americans surveyed oppose new Internet regulation by the federal government.  The last thing the Internet needs right now is for the federal government to turn it into the tech version of ObamaCare, and voters shouldn’t be deceived by this sort of silly season antic.