Net Gains

Source: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=529514

04/06/2010

Regulation: A federal court has unanimously made it clear the government has no business interfering with Internet providers' network management. "Net neutrality" neutralizes businesses' property rights.

From the days when broadcast ruled the mass communications roost, the Federal Communications Commission has operated under the assumption the airwaves are owned by the public.

That served the public interest well when it came to fighting indecency, but what do you do when people communicate over "airwaves" with no air — the phone lines, cables and fiber-optic networks that have superceded radio and TV signals?

That's the question over the power grab the federal government has been attempting under the misleading slogan "net neutrality." Washington insists it must stop Internet service providers (ISPs) from "discriminating" against certain content or applications, in effect meddling in the management of their businesses, in the name of "access for all."

But as Republican FCC commissioner Meredith Attwell Baker noted last year, there's never been any real threat to Internet access. Nor, as fellow GOP-appointed commissioner Robert McDowell has held, is there any authority granted to the FCC by Congress to regulate ISPs' management.

Turns out, they were right. On Tuesday, a Washington, D.C., Circuit Court unanimously squashed the Obama administration's attempts to control the Internet. Now, the signs are the FCC will try to find another way to do the job — maybe by saying broadband carriers are the same as land-line phone companies. It's "Back to the Future" as we cross that bridge back over into the 20th century.

Call us paranoid, but we smell a very political rat in this White House push for net neutrality. Government would love to get its hands on cyberspace. And it wants eventually to tax it, of course.

But cyberspace is also where millions exchange information and viewpoints — some of them hostile to those in power.

Michael Harrison, the founder of Talkers magazine, which covers talk radio, has predicted that conservative (and not-so-conservative) talk radio and the Internet will merge into what he calls "media stations." In that innovative new collective medium, print, talk, and visual will all be available together for millions of people.

Reading, hearing, watching the news — and opinion — will become a combined, complementary experience. It will be a very different media world from one dominated by newspapers, magazines and broadcast outlets.

It also has the potential of being a world the government has a much tougher time controlling — unless it acts now to do so.

FCC chairman Julius Genachowski would have us believe the only dispute is over "congestion and other network-management issues, especially with respect to wireless broadband."

Private firms are legitimately concerned about "peer-to-peer" downloading of movies, games, etc., that can render copyrights meaningless. If ISPs try to prevent what are essentially electronic versions of shoplifting, why should they be condemned for "violating Internet openness principles"? And why must any solution to these problems inescapably be Big Brother watching us?

The DC Circuit did the right thing. It stood up for private Internet property rights. Unfortunately, they may not have the last word, since regulators can always think of plenty of ways to regulate.