It’s jam-packed with information, and we shuttle countless bits and bytes of it around the globe on fiber-optic cables (no tubes, please). So, is the Internet a telecommunications service or an information service? You may think Washington is preoccupied with unemployment and deficits and tea party antics, but deep, deep inside the beltway great minds are busy pondering the metaphysics of communication. And for good reason: the future of the Internet, not to mention gazillions of dollars, turns on their conclusion.
The real issue here is whether the Federal Communications Commission and the White House will get their way, regulating prices and services on the Internet without explicit Congressional approval. On one side sits the chairman of the FCC, who appears bent on imposing new rules by any legal means possible. On the other, stands a bevy of market-minded economists [Download Here] who argue that regulating the prices of Internet content and/or services the way the FCC used to regulate old Ma Bell’s monopoly on telephones is likely to do more harm than good.
If the FCC succeeds in asserting its jurisdiction, we expect that the new rules would be subject to the logic of raw political power. (I’ll see your Verizon and raise you two Googles…) Furthermore, while the White House says it favors transparency in all matters regulatory, we fear that the deal would be cut behind hermetically sealed doors.
Congress, you say, might do better than the FCC at regulating the Internet? And at the very least, the debate would be open. Actually, we’d go a step further: Congressional backers of efforts to corral the Internet would have to convince their colleagues that it makes sense to regulate an industry that has done astonishingly well at spurring productivity and delivering what consumers want.