The Fluppin’ FCC

Image: Federal Communications Commission Proposes New Open Internet RulesIs he an industry shill or an Obama crackdown artist?  We’ve waited six months for Thomas Wheeler to show his true colors as the new chairman of the Federal Communications Commission.  He had spent two decades at the lobbying trade groups of the cable-TV business and the wireless industry, so some were hoping for a businessman at the helm.

Wheeler’s real role now is clear—he is an Obama crackdown artist, bent on redoubling the FCC’s relentless effort to anoint itself overlord of the Internet-access business.  This, in spite of two federal court rulings that have said the agency has no legal authority to dictate to Comcast and rivals how they manage and price their network services.

The more recent ruling came in January, and now Wheeler has unveiled a new regulatory regimen in response.  It would “allow” big pipe owners such as Comcast, Time Warner Cable, and AT&T and Verizon to charge higher prices to some data-hogging customers to provide preferential handling of their far larger traffic loads.

Comcast and other carriers cautiously like this plan, but that’s a big mistake—they should resist any FCC say over their networks, period.  Wheeler proposes granting pricing powers he doesn’t have any legal right to bestow or withhold. And in exchange he seeks a hefty price indeed: total subjugation.

“The proposal from FCC Chairman Tom Wheeler would ban broadband providers from blocking or slowing down websites . . .” as the Wall Street Journal puts it.  It is a ban that goes far beyond the FCC’s legal authority—these networks weren’t built by government (taxpayer) funds, they were erected by private shareholder dollars, they are private property, not a public utility.

If Comcast and company want to block some website that pisses them off, it is entirely within their rights to do so.  They never would, for fear of a PR debacle and a customer backlash.  If my cable guy, Time Warner, were to block me from getting Google and YouTube, I’d fire Time Warner and hire Verizon. Or DirecTV. Or Dish.

The free market can handle this, and customers can vote with their fingers on a keyboard.

Yet the FCC persists.  It approved the Wheeler plan 3-2 along party lines (Dems’ 3 votes to Repubs’ 2) and now has posted it for four months of public comment and self-serving corporate briefs.  Chairman Wheeler frets there are no rules banning big carriers from blocking some traffic and favoring other content.  He wants to protect us from bad stuff that hasn’t happened yet and which is unlikely to happen, ever.  So let’s take all kind of drastic measures to ensure it never could happen.  Because only bureaucrats in the government can protect us from rapacious corporate exploiters, right?  Wrong.

It is classic Obama ethos.  Never mind Hope and Change: this is Fear and Foreboding.  It’s also classic FCC, dating back decades: an agency, conceived 70 years ago to oversee the divvying up of scarce bandwidth, now clinging to that same scarcity mindset at a time of bandwidth ubiquity.

Thus the FCC is trying to undo 20 years of Congressional intent: an explicit, by-design preference to leave the Internet alone and unfettered so it can grow like kudzu.

Wheeler and the FCC depict the new plan as an effort to ensure those big-bad-meanies in the carrier business don’t snuff out fledgling startups and douse the innovative spirit.  In truth, this is a battle between multinational, multibillion-dollar corporations: between titans like Comcast and Verizon on one side (the distribution business) and Netflix and Google and their allies on the other (the content business).

Netflix and Google oppose the new Wheeler plan.  The “House of Cards” video service and Google’s YouTube together gobble up over half of all bandwidth nationwide every night.  Perish the thought they should have to pay more for this data-hogging cargo than, say, a blogger in his mom’s basement.

So they push for “Net Neutrality” rules the FCC has tried to impose, unsuccessfully, to force the big carriers to charge the same flat fees for all traffic, thereby capping Netflix and Google’s own costs.  It’s all about me…

Their argument would all but nationalize the cable networks and let the feds dictate pricing and practices, a de facto seizure of private property that would make Venezuela proud.  But since when does the FCC have any legal right to cap what Comcast charges, at all?  It doesn’t.

So obsessed is the FCC with this issue that it has imposed net-neutrality rules even after getting smacked around in federal court—twice, no less.  The agency imposed net-neutrality rules on Comcast as a condition for letting the cabler buy NBC Universal from General Electric.  You can bet the FCC will slap similar, unauthorized restraints on Comcast and Time Warner Cable as the pound of flesh it will require for okaying their $45 billion merger, now pending.

Likewise, look for the FCC to also shackle AT&T and DirecTV’s $49 billion merger, announced Sunday night, with net-neutrality restraints the courts have ruled illegal.  Such governance.

Moreover, Tom Wheeler holds out an even more grave threat to the carriers if they don’t abide by his new plan:  The FCC also is enlisting comments on whether it should redefine the Net as a public utility, thereby subject to regulations first developed a century ago for the old American Telephone & Telegraph Co. monopoly.

The AT&T system was a government-sanctioned, specially permitted public-service monopoly from the get-go.  Whereas Verizon, for one, spent $20 billion of its shareholders’ cash constructing its fiber-to-the-home network.  Private property, guys.

It is regulatory madness: Take a passel of rules developed for technology invented late in the 19th century and slap ’em on the Internet, the network that will define the 21st century. It is a sign of just how desperate the FCC is to insert itself into the Net-access business, when the past two decades have shown us that the more government stays out of the Net, the more the Net will grow and thrive.


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