03.03.2015 1

Silicon Valley’s net neutrality wake-up call

By Rick Manning

internet_questionsPresident Obama’s famous pen and phone were hard at work last week, as he launched an attack on some of his closest allies.

Using 80-year-old telecommunications law, the Federal Communications Commission, under what appears to be direct orders from the President, announced far-reaching rules to govern the Internet, effectively turning it into a public utility. For those unfamiliar with the public utility concept, it is simple — the government guarantees a company a monopoly for providing services to a certain area in exchange for a guaranteed profit. If the regulated entity wants to make changes or increase prices they need to get approval from the government.

While the FCC reportedly stopped short of creating a price-approval mechanism, that option remains for the future if Congress and the courts leave the Executive Branch power grab intact.

Now, it seems as if some of the President’s left-wing Silicon Valley supporters are not amused. While they thought they could contain this Administration to a narrow construct of regulation that would benefit them, they now face the ugly fact of Big Government that other industries have long endured.

A reality that they thought couldn’t happen to the smart innovators, but only to those old, moldy manufacturers of things like cars and chemicals, not to the bits and bytes crowd.

But once they welcomed Big Government’s nose under their collective tents in the hopes of some small regulations that settled a dispute that the market would have fixed, the smell of regulatory power got too intense, and the once-tamed D.C. bureaucrats found themselves an unregulated foil to put under their collective thumbs.

The Wall Street Journal’s Gordon Crovitz notes that even the Electronic Frontier Foundation which supported using the 80-year-old communication law to regulate the Internet now complains that the FCC is applying a “general conduct rule” on a case-by-case basis, writing that it “may lead to years of expensive litigation to determine the meaning of ‘harm.’”

The same FCC that was slapped down for trying to put content monitors into local broadcasters’ newsrooms just last year, now is claiming through this “general conduct rule” to be the arbiter of what impact content on the Web has on free expression.

The exact opposite result that the naïve supporters of net neutrality purported that they wanted to occur.

As it does so often, it comes down to the story of the dog and the scorpion. The dog and the scorpion were standing on the side of a river wanting to cross. The scorpion asks the dog to give him a lift, but the dog objects that the scorpion will sting him. After assurances by the scorpion that his concerns were irrational, the scorpion climbs on the dog’s back, and they proceed to cross. Halfway to the other bank, the dog suddenly feels the scorpion’s sting, and when he looks back betrayed, the scorpion just says, “What did you expect? I’m a scorpion.”

And that is how the libertarian left of Silicon Valley learned the harsh lesson of playing with regulatory fire. What seemed to them like an ideal way to control Internet Service Providers’ property without any cost to them, has turned into a regulatory albatross that threatens the long-term existence of the open Internet.

One can only wonder if when they reached out to their buddy President Obama to complain about the undue regulatory burdens, if the President replied, “I’m fundamentally transforming America. What did you expect?”

Rick Manning is President of Americans for Limited Government.

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