Don’t Remove the Internet’s Bulletproof Vest

Compared to Internet services and technologies, no other sector has created so many well-paying jobs, engendered so much labor productivity, and freed consumers to work, learn, shop, enjoy and care for each other. The internet has been our express train for sharing developments in education, health care, finance, retailing, publishing, and entertainment.

The Internet reaches virtually everywhere in the US through mobile and wireline service providers and Internet regularly serves 87% of the population. The Internet has been fleet of foot largely because it is low in cost and quick to evolve since it is not encumbered by a thick overburden of regulations.

Consumers must be wise to this because 90% think more regulation or meddling will deter innovation. So far, the Internet continues to thrive despite government abuses of Internet privacy that disappointed consumers and has precipitated a decline in the nation’s information technology exports.

While the freshly elected Congress needs to pay attention to this going forward, the current members of Congress urgently need to address the December 11th demise of the Internet Tax Moratorium. If the moratorium is not continued or made permanent, the protection from federal, state and municipal taxation will evaporate, and the big spending habits of most state and local jurisdictions encourage make them pounce on the Internet like jackals on a doe. Some will be inclined to impose new regulations and obligations on Internet to carry applications of interest to local bureaucrats – burdens such as they impose in cable franchise negotiations.

As if the expiring Internet Tax Moratorium were not dangerous enough, the FCC is toying with the threat of classifying Internet as a Title II service under the Communications Act. By a mere re-labelling, the FCC could grant itself authority to seize control of Internet traffic and speeds, and eventually pricing. This tortured gambit is in pursuit of a bad idea cynically labelled “net neutrality.” The FCC’s “net neutrality” plot has been twice overturned by the federal appeals courts, but this FCC thinks it knows best.

Title II is the same classification that since 1934 kept telephone services stodgy, bureaucratic and shockingly expensive, and taxed beyond reason. On the other hand, Title II is popular among federal, state and local regulators because it allows them to impose hefty tax burdens and to indirectly force consumers to pay for vote-grabbing social programs (such as the “Obamaphone”).  About 30 stealthy fees, surcharges and taxes are ultimately paid by customers of Title II companies due to legerdemain of federal and state telephony regulators. Title II would be a cost nightmare and a wet blanket slowing the quick innovation that consumers expect from the Internet.

Consumers need Congress to be actively on their side. Congress should join consumers in affirming that Internet has earned a special place in consumer information services. It must not be subjected to financial burdens from more than 10,000 taxing jurisdictions, and the Internet should not be degraded to the status of a consumer-funded Title II piñata for regulators to mess with.

Alan Daley writes for The American Consumer Institute Center for Citizen Research, a nonprofit educational and research organization. For more information, visit www.theamericanconsumer.org.

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