Quote of the Day:
Washington’s seizure of the Internet is one of the great case studies in the annals of political naïveté.
–Daniel Henninger in the Wall Street Journal
In today’s must-read, the Wall Street Journal columnist explains how some of the giants of the internet that originally importuned the Obama administration for net neutrality are already getting a glimmer of what a big mistake they made.
Pro-net neutrality giants include Netflix, Google, and Tumblr. Art for the column captures their likely predicament: it shows the dapper big bad wolf making a proposal to Little Red Riding Hood. These companies will soon feel the bite of a big bad federal wolf.
Net neutrality, as Henninger explains, is one of those names that is “designed to be embraced rather than understood.”
What it basically means is that the FCC will create and enforce pricing of internet services.
The new net neutrality regulations will turn the internet over to telecommunications laws written in the 1930s.
The FCC didn’t reveal the exact nature of its plans to these Little Red Riding Hoods, despite their support, until after it had voted for net neutrality. But now the companies are beginning to get a glimpse of what is in store for them:
In February the FCC [voted for net neutrality], and on that day the Little Red Riding Hoods of net neutrality found out what big teeth grandma has. The FCC said its plans to regulate the Web were in a 332-page document, which no one can see until the agency is ready.
Within days, Netflix CFO David Wells spoke about the Internet coming under the FCC’s Title-II control: “Were we pleased it pushed to Title II? Probably not. We were hoping there might be a non-regulated solution. But it seems like companies that are pursuing their commercial interests including us have to arrive at something like that.”
The Internet’s descent into the Washington heart of darkness is a perfect example of that famous Santayana-ism: Those who cannot remember the past are condemned to repeat it.
History shows that, if these little Red Riding Hood companies want to rid themselves of these new regulations, they will have a hard time. Henninger recounts what happened in 1987, when the FCC proposed deregulating telephone rates.
Lobbyists for the big companies, knowing that government regulation was better than competition for them, fought hard:
What ensued over nine years was arguably the greatest pig-out of lobbying fees and campaign-contribution shakedowns in Washington history. The Beltway bled political payments out of these businesses until Congress finally disgorged a law in 1996.
The FCC’s seizure of the internet is being welcomed unreservedly by one group:
About the only faction unabashedly cheering the FCC’s capture of the Internet is the Occupy-everything left. Their numbers include such famous high-tech innovators as The Center for Media Justice, Demand Progress, 18 Million Rising and Popular Resistance.
This is the same left that loathes Hillary and Bill Clinton for their crony capitalism, such as the Clinton Foundation donor stories. That’s rich. What the left and Barack Obama have done with the Internet and all the rest of this administration’s reregulation (banks, health care, education, utilities) is put Clintonalia back in control of Washington. No one can do business until they first run it through the Beltway bosses. For the K Street corridor, it’s the golden age all over again.
While lobbyists will get rich on the net neutrality regulations, innovators and entrepreneurs will face unnecessary hurdles, including higher costs.