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The FCC and White House Weigh In on Internet Regulation

November 25, 2014

iStock_000003994351MediumFederal Communications Commission (FCC) Chairman Thomas Wheeler recently briefed leaders on Capitol Hill about the commission’s new net neutrality rules. We’re not certain if lawmakers discussed municipal broadband in the meetings, but given other recent developments, they should have.

Both Chairman Wheeler and President Barack Obama have recently said they want to see the Internet treated as a utility. On Oct. 31, Reuters said the FCC’s new rules “would treat part of the web network as a public utility” and last week President Barack Obama said something similar. According to The Atlantic, “A new ‘net neutrality’ plan released by the White House on Monday morning includes an endorsement of an old idea that some activists have been pushing for years: the treatment of the Internet as a public utility.”

These comments could have implications not only for upcoming net neutrality rules, but also for the current debate about whether the FCC should usurp state laws concerning government ownership of broadband networks. (As a reminder, Wheeler has also said he wants more local governments to own their own broadband networks – an assertion that is especially ironic considering he asserted the independence of his own agency after the president’s net neutrality proposal was released. If the FCC is independent from the White House, shouldn’t individual states be able to decide how to sort out these issues instead of federal officials asserting their own will for the whole nation?)

Allowing that the Internet should be treated like a utility, of course, invites the notion that utilities or other government entities should also own their own networks.

As we reminded readers earlier this year, when President Bill Clinton and Congress passed the Telecommunications Act of 1996, lawmakers specifically said they wanted to keep the government from building broadband networks, preferring private investment as the best means to bring the Internet to more people. As former National Telecommunications and Information Administration (NTIA) Administrator Larry Irving wrote in The Hill, “Twenty years ago, the Clinton administration believed that the principal role of the government was promoting private-sector investment through appropriate tax and regulatory policies,” to build broadband networks itself. Irving argued the “trillions of dollars of private-sector investment” and “explosion of broadband-enabled activities, products and services, and millions of Americans are connected to the Internet” showed “we got the policy right in the ’90s, and private-sector investment continues to be the right path going forward.”

The Clinton Administration’s policy was especially prescient given the fact that so many government-owned networks (Groton, Conn., UTOPIA and Marietta, Ga.) have failed leaving taxpayers holding millions in debt. Efforts to increase Internet regulation threaten the private investment the Clinton Administration fought so hard to foster.

The Internet is an essential part of American life because private sector companies have invested billions to extend high-speed access to virtually every American. Changing what the Internet is – from a place where private investment flourishes, to a utility-based system where local governments own individual networks and get to write the rules they (and their competitors) live by – will be bad for consumers.