Reminders from Congress to the FCC

As the FCC pushes forward with an agenda focused on more regulation of the Internet, members of Congress have sent letters that offer worthwhile reminders.

A bipartisan May 24 letter, for example, made the following key points:

• “The regulatory framework first adopted in 1998 by the Clinton Administration’s FCC has resulted in broadband industry infrastructure investment of approximately $60 billion per year. In the last decade, multiple providers and the hundreds of thousands of workers they employ have brought high speed connections to 95 percent of U.S. households where two-thirds of Americans now access the Internet through broadband at home.”

• In terms of further expanding both wired and wireless broadband: “As the [National Broadband] Plan notes, that work will require as much as $350 billion in additional private investment. Generating those enormous sums from industry, and the good-paying jobs they produce, will require a continued commitment to the stable regulatory environment that has existed for the last dozen years.”

• “… we have serious concerns about the proposed new regulatory framework for broadband and the Internet. The expanded FCC jurisdiction over broadband that has been proposed and the manner in which it would be implemented are unprecedented and create regulatory uncertainty… The uncertainty this proposal creates will jeopardize jobs and deter needed investment for years to come. The significant regulatory impact of reclassifying broadband service is not something that should be taken lightly and should not be done without additional direction from Congress.”

Additional points of note were made in another May 24 letter signed by various Senate Republicans:

• “We are deeply disappointed by your recent announcement that you intend to reclassify broadband Internet access services as telecommunications services subject to Title II of the Communications Act of 1934. This move will deter further private sector investment in broadband networks, will negatively impact innovation, and ultimately harm consumers. We strongly encourage you to abandon this drastic action, and to continue the successful policy of leaving the Internet free from common carrier regulations.”

• “The reality is that what you are seeking is a major shift in FCC policy that is highly controversial and has been previously rejected by Congress and both Democratic and Republican administrations.”

• “Turning 21st century broadband networks into ‘dumb pipes’ is not what will draw investment to grow jobs in the communications sector and bring high-speed broadband to every home in America.”

• “It also appears that you are operating under the misguided notion that there is a lack of competition among broadband service providers. The FCC concluded in 2002, 2005, 2006, and 2007 that broadband competition was robust and further regulations were unnecessary. If anything, the market is more competitive today, and you have offered no detailed evidence to the contrary.”

These letters are right on target. Consumers – including small businesses – have benefited enormously from the broadband investments made in the private sector. This misguided regulatory escapade creates uncertainty, and thereby will restrain future investment.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council