Tuesday, November 11, 2014

President Obama Wants to Regulate the Internet as a Public Utility

Of course he does. Progressives cannot tolerate an unregulated, independent successful capitalistic enterprise. American business has suffered in the global economy. Industry has fled America to cheaper environs. High tech stands out as an exception. The Internet is one of America’s greatest contributions to the World. Everyone, rich or poor, can access the Internet. A free Internet, an independent source of information, from outside the country, is a threat to governments, totalitarian or free. An “open” Internet regulated by the government is an oxymoron. Governments around the world are trying, with varying degrees of success, to manage and control the Internet. The consequences of regulating the Internet are well proven: 1) “Open” becomes closed: new competitors are locked out; 2) Lack of innovation; corporate sclerosis 3) Anemic service 4) Slow, the Internet will operate at the speed of a sloth 5) A large bureaucracy 6) Costs rise; cellular and internet costs are dropping in the competitive marketplace 7) Suppression of speech, notwithstanding the First Amendment We remember from the stogy days of AT&T, the decades before deregulation. That AT&T could never have become a cellular powerhouse. MCI entered the phone market on January 1, 1972, offering service between Chicago and St.’ Louis. AT&T lost its monopoly. Michael and Drexel Burnham backed MCI and other telecom companies with junk bonds. The telecom revolution was underway. Only the FCC can stop it. The Federal Communications Commission is an independent federal agency. That did not stop President Obama from pressuring it to reclassify Internet Service Providers (ISP’s) “to be regulated like public utilities.” President Obama stated Monday in Beijing in the fabled cadence for which his oratory is known, but now tuned out by the American public: “Simply put: No service should be stuck in a ‘slow lane’ because it does not pay a fee.” No, it should respond with the alacrity of the VA. “If you like your current speed, you can keep it.” The President and the FCC ignoring a January court decision striking down the FF’s earlier attempt to impose “net neutrality” in the computer industry. The court held that the Agency “failed to cite any statutory authority” to keep broadband providers from blocking or discriminating against content. He stated that higher fees for “fast lanes” should be banned. He believes that government, rather than the market, can foster competition and low prices. Price discrimination is a constant in the economic world: airlines, hotels, college tuition, taxation, automobiles, computers. High prices to a few subsidize the costs to the many. “Net neutrality” is a seductive phrase. It sounds fair to the ear. It means the government will control the Internet. The government will control the content, the speech on the Internet. Any legislation needed for the FCC to impose net neutrality will die in Congress. Republicans are opposed. Senator Ted Cruz referred to “net neutrality” as “Obamacare for the internet.” The Internet thrived because the government stayed out of the way. As long as cable is competing against the phone companies, the market will be the best source of protecting the consumer.

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