-By Scott Cleland
The FCC’s proposed Open Internet Regulations and/or the oft-rumored potential re-classification of broadband as a Title II telephone service effectively would create a new FCC “de-competition policy.” (For the one-page PDF submitted to the FCC click here.)
A new FCC “de-competition policy” would:
- Supplant market-based competition policy with outdated common carrier regulation policy;
- Shift the FCC’s primary purpose from promoting competition to promoting openness;
- Replace the core mechanism for advancing consumer welfare from a voluntary, bottom-up, market-based competition system to a coerced, top-down, centralized, FCC regulation system; and
- Remove users from being in charge of the Internet to the FCC asserting control over the Internet.
A new FCC “de-competition policy,” unauthorized by Congress, would effectively:
- Devolve existing communications law from its purpose in the 1996 Telecom Act “to promote competition and reduce regulation” to promote regulation and reduce competition;
- Abandon existing Congressional Internet policy in law, which is “to preserve the…competitive free-market…Internet…unfettered by Federal or State regulation”;
- Distort the notion of an “open” market to mean government-driven, not competition-driven; and
- Install the introduced, but never marked up or passed, Markey-Eshoo bill (HR 3458) as new national policy.
The harms of a potential new FCC “de-competition policy” are:
- Missing the point of competition and its unique benefits:
- Best at anticipating consumers’ ever-evolving and diverse demands — in real time;
- Best at responding to demand with a diverse offering of consumer choices and platforms;
- Best at incenting real innovation through opportunity for reward and the discipline of risk;
- Best at delivering sustainable economic growth and good job creation broadly; and
- Best at generating sustainable, long-term, multiple-technology infrastructure investment.
Undermining the National Broadband Plan’s consensus with de-competition policy’s major strife.
- Regressing backwards to a 19th century regulatory paradigm designed for a single technology monopoly (railroads), and away from a 21st century competition paradigm for diverse technologies.
- Halting progress by changing the rules and moving the goalposts mid-game, requiring a complete — regulatory, legal, policy, business, investment, competition, and innovation — do-over.
- Supplanting technology-neutral policy with industrial policy favoring Google, eBay and Amazon.
- Ignoring the FCC’s well-known regulatory/legal failures from a decade ago and the consequent bubble speculation and crash they helped cause (CLEC and fiber bankruptcies, dotcom bubble) with no lessons-learned or analysis why new de-competition policy won’t result in déjà-vu.
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Scott Cleland is one of nation’s foremost techcom analysts and experts at the nexus of: capital markets, public policy and techcom industry change. He is widely-respected in industry, government, media and capital markets as a forward thinker, free market proponent, and leading authority on the future of communications. Precursor LLC is an industry research and consulting firm, specializing in the techcom sector, whose mission is to help companies anticipate change for competitive advantage. Cleland is also Chairman of NetCompetition.org, a wholly-owned subsidiary of Precursor LLC and an e-forum on Net Neutrality funded by a wide range of broadband telecom, cable and wireless companies. He previously founded The Precursor Group Inc., which Institutional Investor magazine ranked as the #1 “Best Independent” research firm in communications for two years in a row. His latest op eds can be seen at www.precursorblog.com.
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