The internet has, as we never tire of saying, been a boon to creativity and economic growth.
Not surprisingly, the Obama administration found a way to put a damper on this hotbed of activity. A year ago, the Federal Communications Commission, acting at the directions of President Obama, voted to subject the internet to regulations designed for the telephone industry in the 1930s.
Tom Wheeler, the FCC chairman and an Obama appointee, tweeted that the new rules, approved on a partisan vote, would provide "certainty for innovators & investors so #broadband network deployment continues." So how's that working out?
A Wall Street Journal editorial explains:
A new study shows that broadband deployment is heading south after years of rapid growth. And congressional investigators have released new evidence of political interference and possible legal violations in the FCC’s rule-making.
The FCC enacted this historic blunder on a partisan 3-2 vote. Dissenting Republicans Mike O’Rielly and Ajit Pai warned that bureaucratic costs plus uncertainty about future enforcement would discourage Internet service providers from costly build-outs. Mr. Wheeler promised to exercise “forbearance” from the most onerous of the traditional phone rules.
Now broadband providers are the ones forbearing—from investment. Capital expenditures by Internet service providers rose by 8.7% in 2013, according to the U.S. Telecom Association. Then investment slowed to 4% growth in 2014 as the FCC considered new rules. Economist Hal Singer now reports that in 2015 industry capital expenditures declined by 0.4%.
Commissioner Pai predicted that the FCD would have “a roving mandate to review business models and upend pricing plans that benefit consumers.” That seems to be what is happening.
For example T-Mobile ’s Binge On program has been hauled in for a review. Binge On, according to the Wall Street Journal, gives customers the ability to decode stream videos without having this be factored into their data usage. What's wrong with that?
Appalled at the idea that businesses and their customers would decide which pricing plans are acceptable—rather than letting federal bureaucrats set the terms—so-called Net Neutrality activists now “claim that letting consumers watch online video for free is ‘discriminatory,’ ‘limits user choice,’ and ‘stifles free expression,’” reports Mr. Pai. “Some even argue that such a practice, known as zero-rating, is a human rights violation!,” he adds.
The government is now positively honeycombed with regulations that reduce our choices in matters small and large. I'd like to think that the next president will reverse these regulations.
So all this depends on what happens in November.