Today, the FCC Chairman announced his intention to embark on what could be a risky path toward regulating the Internet and wireless services in order to fix a theoretical problem – one that is rarely observed in the market and, if it were ever to occur, one that could easily be addressed with the Commission’s current powers, on a case-by-case basis. With every consumer welfare study on record demonstrating that onerous network regulations would raise consumer prices and reduce network investments, harsh Internet regulations could be very counterproductive to achieving the goals of Congress, thereby reducing network deployment and Internet use. Rules that discourage Internet and wireless infrastructure investment would also reduce innovation at the edge, which means that if the commission is concerned about encouraging innovation at the edge, it should first adopt policies that encourage network investment. For this reason, it is important for the Chairman to be mindful that network investment is the key encouraging consumer benefits.
On the more positive side is the Chairman’s focus on increased transparency, including a requirement for Internet providers to give consumers additional information, which would bring consumer benefits without imposing significant network costs. Also, permitting Internet and wireless providers the ability to management congestion and security on their networks is important, in order to keep network costs and consumer prices low.
However, broader Internet regulations could discourage network investments. With this in mind, it is imperative that the FCC first identify real, pervasive and systematic practices that harm consumer welfare, impede fair competition and reduce investment before applying any remedy, while measuring that the benefits of these regulations outweigh the costs. The commission needs to identify the problem before proposing how to fix the problem. In closing, the public record on this matter and burden of proof by those calling for regulations should show clear benefits and demonstrate that these regulations will not do harm.
We look forward to participating the FCC’s process.