Cleland served as Deputy United States Coordinator for Communications and Information Policy in the George H. W. Bush Administration. Eight Congressional subcommittees have sought Cleland’s expert testimony and Institutional Investor twice ranked him the #1 independent analyst in his field. Scott Cleland has been profiled in Fortune, National Journal, Barrons, WSJ’s Smart Money, and Investors Business Daily. Ten publications have featured his op-eds. For a full bio see: www.ScottCleland.com.
Latest posts by Scott Cleland (see all)
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In February the FCC imposed Title II 1934 telephone utility regulations on the Internet.
To prevent future net neutrality problems the FCC has yet to identify, the FCC effectively slowed the business of Internet down to the speed of government.
American innovation leadership will be collateral damage. That’s because the FCC changed the Internet’s ethos from innovation without permission, to innovation without the permission of the FCC — risks bans, fines and lawsuits.
Title II is Depression-era, one provider one decider regulation. Its basic purpose was getting the same rotary telephone service to all Americans.
It took the FCC 50 years to accomplish that singular Title II universal service task, and during that half-century period the rotary phone did not change. Title II regulation effectively froze telephone innovation in the year 1934.
In stark contrast, two-thirds of Americans adopted broadband smartphones in the eight years since the FCC fully liberated the wireless marketplace from Title II’s smothering “mother may I?” regulation.
Title II regulation has blocked other major innovation and competition.
Despite Bell Labs’ invention of cell phone service in 1947, the FCC would not approve the amazing innovation for consumers for 35 years.
Despite Bell Labs inventing the computer modem in the 1950s, the FCC would not clear the way for its widespread consumer adoption for almost 40 years.
Title II regulation and innovation have long been bitter enemies, because they have opposite purposes.
Title II is about centralized command and control to enforce sameness. Innovation is about freedom, creativity and differentiation to enable competition, change, and progress.
Consider the strongly pro-innovation, pro-market competition purposes of the 1996 Telecommunications Act: “To promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.”
Liberated from a Title II regulatory mentality, America today enjoys the most facilities-based broadband and wireless competition in the world, and America is well known as the epicenter of communications innovation.
Congress’ bipartisan wisdom of less regulation unleashed America’s exceptional communications innovation.
Consider the effective contrary purpose of the FCC’s recent Title II decision: to promote regulation so that the FCC has the power to approve prices, quality and innovation.
To ensure the FCC’s new Title II “rules of the road” are followed, i.e. no Internet traffic blocking, throttling, or paid prioritization, the FCC has assumed the role of the Internet’s traffic cop and packet police.
To prevent paid prioritization, the FCC must detour everyone from their preferred market fast lane and most direct route, to the government’s innovation slow lane and the FCC’s serpentine route to innovation approval.
We all know the government’s common traffic signs — SLOW, CAUTION, SPEED BUMP, SPEED LIMIT, YIELD, STOP, DETOUR, DO NOT ENTER, WRONG WAY, ONE WAY, etc. All are about slowing things down.
The self-appointed FCC Internet packet police will be no different; they will slow things down too.
Title II regulation presumes new communications technology is harmful to consumers, when it is not. This false presumption of harms onerously flips the legal burden of proof from the government proving that a particular innovation is harmful, to the inventor that their innovation is not harmful — before it can be introduced in the marketplace.
Finally, the high speed of market-based communications innovation will slow because of the inherent slow speed of government bureaucracies, with all their complex procedures, forms, rules, comment periods, and regulations that businesses don’t have.
In a nutshell, the FCC forcing innovators to detour from the fast lane of Internet business to the slow lane of government bureaucracy increasingly will cause unnecessary collateral damage to innovation, competition, consumer choice and economic growth.
Congressional bipartisanship needs to step up to resolve this unnecessary, unproductive, and unworkable Title II mess as soon as possible.
[Originally Published at the Daily Caller]