Research & Commentary: FCC Internet Regulation

Published January 25, 2010

The battle royale between Comcast and the Federal Communications Commission over so-called “throttling” of file-sharing activity on Comcast’s Internet service has spilled over into federal court. On January 8, Comcast presented its argument before the U.S. Court of Appeals for the DC Circuit.

In 2008 the FCC determined Comcast violated “federal Internet policy” by throttling back broadband hogs using bitTorrent to share large files (most likely movies and music). Comcast pointed out that there is no enforceable “federal Internet policy.” The so-called Four Principles of Internet Policy–meant to encourage the free flow of data across the Web–are voluntary. The FCC is now moving to codify those principles into official, government-sanctioned rules, a process expected to be completed by late spring, so that it can impose them by force.

Not surprisingly, the judges on the DC Circuit expressed skepticism toward the FCC’s case. If the FCC has always had the power to impose its will on Comcast, why is it only now trying to establish explicit, enforceable rules? The matter should now be irrelevant anyway because Comcast has developed new techniques for managing its network that seem adhere to the voluntary guidelines. But the FCC persists in pressing its case.

While bungling its first, premature attempt to micromanage just a single ISP, the FCC is looking to grab even more regulatory power over the Internet. This is not a good sign for the future of the digital economy–which is still vibrant, for now.

The following articles offer additional information on the FCC regulation of the Internet.

Does the FCC Have the Power to Regulate the Internet?
Barbara Esbin, a senior fellow at the Progress & Freedom Foundation, explains why the Federal Communications Commission doesn’t have the legislative mandate to regulate the Internet as it wishes.

Comcast, the FCC, and “Open Internet” Rules: Where We Stand
A blog post from David L. Cohen, executive vice president of Comcast, expresses his company’s side of its dispute with the Federal Communications Commission over so-called “throttling” of file-sharing activity on its network.

Congress Looking Skeptically at Comcast-NBC/Universal Deal
A story by James G. Lakely, managing editor of InfoTech & Telecom News, highlighting those skeptical of Congressional efforts to “examine closely” or even put a stop to the purchase of NBC/Universal by Comcast.

Sadly Comcastic!
Reason magazine contributor Jeff Taylor contends Comcast was justified in its bandwidth-throttling attempts and that breaking up government-granted monopolies, instead of expanding regulation, is the best way to ensure customers are served well.

The Impact of Regulation on Innovation and Choice in Wireless Communications
Everett Ehrlich, Jeffrey A. Eisenach, and Wayne A. Leighton explain how net neutrality regulations would hamper innovation and consumer choice in the wireless sector.

Report on the Economic Impact of Telecommunications Reform in Indiana
This Ball State University study notes how deregulation of the telecommunications industry resulted in increased competition in the technology sector and the expansion of broadband access.

Net Neutrality: A Further Take on the Debate
Progress & Freedom Foundation Senior Fellow Barbara Esbin had a “print debate” in U.S. News & World Report with Andrew Schwartzman of the Media Access Project on the pros and cons of the Federal Communications Commission’s proposed network neutrality rules. In this document, Esbin offers more reflections on the debate.

The Durable Internet: Preserving Network Neutrality Without Regulation
Timothy B. Lee, an adjunct scholar at the Cato Institute, notes that new Internet regulations will come with unintended consequences. Regulations are unnecessary, he writes, because even in the absence of robust broadband competition, network owners are likely to find deviations from the end-to-end principle unprofitable.

Free the Web — From the FCC!
Wall Street Journal columnist L. Gordon Crovitz compares the FCC’s Internet access approach to the Interstate Commerce Commission’s approach to railroad regulation in the nineteenth century.

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Nothing in this message is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. If you have any questions about this issue or the Heartland Web site, you may contact James G. Lakely, co-director of the Center on the Digital Economy at The Heartland Institute and managing editor of InfoTech & Telecom News, at 626/421-9414 or [email protected].