FCC's Genachowski on the Naughty List

Dear Santa,

I've been a good boy this past year. Ate all my veggies. I've also worked hard to advance my boss's vision for all Web traffic to be treated "equally."

Even though I don't really have the authority to do so, I'm planning in December to impose net neutrality regulation on those big bad broadband network providers. I trust you agree that this is a necessary step to stop those corporations from discriminating against the little guy.

So, please, I don't want anything for me under the tree this year. Instead, I only ask that you put lumps of coal in the stockings of those Republican and Democratic members of Congress who oppose what we are trying to accomplish at the FCC. After all, how could these people be against everything being equal on the Internet?

Just let me regulate as I see fit, and all will be well.

Thanks, and send along my best wishes to Mrs. Claus.

Sincerely,

Julius Genachowski

FCC Chairman

Read Santa's reply here.

Raymond J. Keating

Chief Economist

Small Business & Entrepreneurship Council

The FCC Disconnect on Broadband Deployment

The Federal Communications Commission (FCC) is reversing course a great deal these days.

For example, from a light regulatory touch that has allowed for robust private-sector broadband investment and innovation, the FCC is pushing for a net regulation regime that promises to be anything but a light touch. Instead, the FCC would be involved in regulating how broadband providers operate and price their services, which in turn would have a negative impact on investment, innovation and the choices small business owners have in the marketplace.

And then we have the July 20 release of the FCC's broadband deployment report.

The Telecommunications Act of 1996 requires that the FCC determine that "advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." In the previous reports, the FCC gave a thumbs up, noting that broadband deployment was advancing. But now the FCC has, again, reversed course - a thumbs down, if you will - declaring, "we conclude that broadband deployment to all Americans is not reasonable and timely."

This is bewildering based on what's actually going on in the marketplace...

Read the rest of this SBE Council Technology & Entrepreneurs analysis here.

Economic Fallout from Internet Regulation

Flying directly in the face of sound economics and a common sense understanding of how government regulation works (or more accurately, fails to work), the Federal Communications Commission (FCC), under the leadership of Chairman Julius Genachowski, continues to push relentlessly towards imposing net neutrality regulation on broadband Internet service providers.

Genachowski & Company would do well to take a little time out to read a new study titled "Net Neutrality, Investment & Jobs: Assessing the Potential Impacts of the FCC's Proposed Net Neutrality Rules on the Broadband Ecosystem" by Charles M. Davidson, director of The Advanced Communications Law & Policy Institute at New York law School, and Bret T. Swanson, president of Entropy Economics LLC...

Read the rest of this SBE Council Technology & Entrepreneurs analysis here.

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."

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

FCC Moves Forward on Internet Regulation

Federal Communications Commission (FCC) Chairman Julius Genchowski is forging ahead with a policy initiative that works against economic common sense, against a unanimous decision by a three-judge D.C. panel, against actual legislative authority, and against consumers, small businesses and an important, dynamic industry.

What's he up to? Genachowski and his two fellow Democrats on the Commission have chosen to forge on with "net neutrality" regulation on Internet broadband providers...

Read the rest of this Technology & Entrepreneurs analysis here.

How About Government-Run Internet?

Small business owners can urge the Federal Communications Commission (FCC) to not intervene in the workings of the Internet. The FCC is putting the final touches on proposed rules that will heavily regulate the Internet.

Such unnecessary meddling will only discourage innovation and investment at a time when our country needs to encourage a robust climate for both. You can visit the FCC’s blog -- www.openinternet.gov -- click on the "Join the Discussion" link, and express your views about so called “net neutrality” rules.

Please make your views known by Thursday, October 22nd. Of course, supporters of extreme internet regulation are flooding the site, so please take some time to express your views as a small business owner.

Here are some of SBE Council’s concerns about a government-run internet:

- Small business wireless consumers can currently access a broad range of innovative services and devices. At every turn, new innovative services are devices are improving the competitiveness and productivity of America’s entrepreneurs. Why is the government intervening in a market that is working beautifully? The argument has not been made (not even close to it) that the market has failed.

- Competition for wireless and broadband customers is fierce. The market is working for small business consumers. Don't disrupt it with harmful regulations.

- One of the goals of the Obama administration is to provide every American access to broadband. The FCC’s net-regulation rules work against this important goal in that they will discourage private sector investment in building out broadband infrastructure. Many small businesses still need access to broadband. The FCC is undercutting this important initiative to bring new tools to individuals and small business owners at a time that they need this support the most.

- Our economy is still struggling. The FCC is punishing the telecommunications industry at a time when we need to leverage their investment capacity to keep and create new jobs. Thousands of small businesses serve as suppliers to the industry, and placing new roadblocks to its growth and success will ultimately hurt small firms and their workforce.

Let your voice be heard!

Karen Kerrigan, President & CEO