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April 8, 2011

House Vote a Ray of Hope in Fight Against Federal Internet Regulations

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Last Dec. 21—a date that Federal Communications Commission Commissioner Robert McDowell noted was quite literally the darkest day of the year—the FCC voted to impose federal regulation on the Internet, in the form of “net neutrality” rules.

But a bit of light has reappeared on the horizon.  The House of Representatives by a vote of 237-176, acted to stop those rules from taking effect.

Don’t get out your sunglasses yet, however.  While important symbolically, the House legislation is unlikely to become law—unless President Obama somehow can be convinced to abandon one of his most prized regulatory initiatives.  The real dawn will have to come from the courts, not from Capitol Hill.

The general principle of “net neutrality” is that networks providing access to the Internet should be passive, or “dumb,” conduits of information, and should not manage or prioritize content being sent through them in any way.  The idea originated as an engineering concept in the early days of the Internet.  The FCC rules would, for the first time, make the principle a legal requirement.  The regulations the FCC approved on a 3-2 vote in December forbid “unreasonable” discrimination, leaving the precise practices to be allowed or banned to be decided on a case-by-case basis.

The word “unreasonable” is an important one.  Despite the urgings of far-Left supporters of Internet regulation, the FCC balked at banning any differentiation between the bits and bytes sent via the Internet.  That made sense—there are all sorts of reasons why one bit of data should arrive faster than another.  (Imagine how maddening a digital phone call would be if network traffic were literally managed on a first-come, first-served basis).

At the same time, insertion of that word vested vast discretion in the FCC to determine what is or isn’t allowed.  What, after all, is “unreasonable” discrimination?  The rules provide only circular and vague guidance, such as:  “Reasonable network management shall not constitute unreasonable discrimination.”  As a result, critical decisions as to what is permitted will be left to the subjective judgment of five FCC members.

Could a service provider take steps to limit “bandwidth hogs” who consume huge amounts of transmission capacity?  Could it offer “priority service” to content providers willing to pay a premium?  Do political messages get special consideration?  These questions are left for the commission to decide.  Not only is such discretion dangerous, it is hardly likely to create the consistent regulatory atmosphere necessary to encourage needed investment in the Internet.

The overall result is bad news—not just for Web surfers, but for the economy as a whole.  Investment in broadband today is one of the few bright spots of the economy, with providers expected to invest some $30 billion in private capital into their networks annually for the next five years, creating hundreds of thousands of jobs.  It is also bad news for free speech, as FCC regulators inevitably will be drawn into debates about the relative value of different types of web content.

Making things worse, the FCC is doing all this with no statutory authority.  None.  The Communications Act, the FCC’s founding document, authorizes the agency to do all sorts of things, from regulating telephone rates to assigning the frequencies broadcasters use.  Nowhere does it mention regulating the Internet.

The FCC has tried to get around this problem by pointing to vague sections of the law calling on them to encourage “advanced services.”  But such claims are wholly unconvincing.  The fact remains that no one has granted the FCC the right to regulate the Internet, and the FCC’s rules for doing so are fundamentally illegal.

It is, therefore, not surprising that the House voted to “disapprove” the rules.  But to successfully block them, the legislation will also have to be approved by the Senate and by the President.  That is unlikely.

That means the fate of Internet regulation is in the hands of the courts.  And there, the signs are good.  An earlier attempt by the FCC to impose such rules has already been slapped back by federal judges.  And, despite a setback earlier this week on procedural grounds (the Internet service providers challenging the FCC filed too soon), the odds are that the courts will do it again.  And they should.

Opponents of Internet regulation will rightly celebrate the latest vote as good news.  But the real victory will come not from Congress, but from judges enforcing the rule of law.

James Gattuso is a fellow in regulatory policy at The Heritage Foundation.

First appeared in Human Events

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