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Friday, June 18, 2010

FCC's Vote to Regulate Internet Criticized

The Small Business & Entrepreneurship Council (SBE Council) on June 17 criticized a Federal Communications Commission's (FCC's) vote today (3-2) which brings the federal government another step closer to regulating the Internet.

FCC Chairman Julius Genachowski has curiously and relentlessly pursued such regulation on broadband Internet service, even though no evidence has been presented to justify federal government intrusion. According to SBE Council, investment, job growth and innovation will be negatively impacted by this inappropriate and unnecessary move, which all coincidentally work against the FCC's National Broadband Plan. To add insult to injury, the FCC is looking to impose outdated and costly telephone regulation on broadband Internet service -- a move that will surely have repercussions and unintended consequences beyond what the FCC is envisioning.

SBE Council President & CEO Karen Kerrigan said: "Entrepreneurs and the small business community have benefited tremendously from the government's long-standing policies governing the Internet. This light touch has encouraged the Internet's vast growth, as well as the innovations that have played a central role in small business growth and success. Today's vote opens the door to a future where government dictates the price and operational models on broadband providers. Such regulation will severely limit small business choices, raise prices, deter broadband deployment and hurt our innovative capacity."

The FCC commissioners voted 3-2 in favor of opening a comment period regarding the commission's authority to regulate how broadband providers effectively run and price their services.

SBE Council chief economist Raymond J. Keating added: "This entire effort seems specifically designed to discourage further investment and innovation in the broadband marketplace. The implications for small businesses are quite grave, given how much the entrepreneurial sector of the economy has benefited from and contributed to broadband Internet services."

Kerrigan also noted: "There is a great deal of regulatory arrogance in this vote. After all, a federal appeals court in April ruled that the FCC did not have the authority to regulate the business practices of broadband providers, and many in Congress obviously agree. So, this move by the FCC is a glaring case of regulators trying to grab power they simply do not have. It means more resources wasted in court, rather than being invested to expand and improve broadband."

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