- The Washington Times - Tuesday, April 22, 2008

ANALYSIS/OPINION:

When economic stagnation gripped the country in the 1970s, I was an economics professor in my home state of Texas. Back then when I was teaching a class and needed a real-world example of how government overregulation harmed the economy and stifled innovation, I would point to any number of sectors in the economy. This was the era when making a long-distance call was a big deal.

In the wake of the economic malaise of the 1970s, economists began to seriously look at deregulation as a way to enhance economic growth. Airlines, trucking, energy and telecommunications all were opened to market competition, unleashing a new era of economic growth, innovation and investment.

The telecommunications industry went from protected regional monopolies to a competitive marketplace, and when the government got out of the way, consumers won.

New technologies began to emerge, such as fax machines and mobile phones, while the costs of communications fell and service quality went up. Telecom became a text-book case demonstrating that markets work and are good for consumers.

This free market push continued into the 1990s. In less than a decade, the Internet moved from an academic experiment to become the backbone of our economic infrastructure. In a few short years, we went from dial-up modems to high-speed broadband connections.

The Web has moved beyond simple pages of information to streaming audio, video, and interactive technologies. The evolution continues, as innovation moves toward third generation Web applications. That is, unless the government decides to get in the way.

Despite the benefits the Internet has created and the dynamic innovations that continue, there is a move afoot to turn the Internet over to federal regulators in the name of protecting “Net neutrality,” a nebulous concept that may turn out to be nastier than it sounds.

Net neutrality laws would prevent broadband providers from differentiating the treatment of various types of content on the Web as well as requiring open access to the Internet. Proponents say this is necessary to protect the Internet and freeze it in place, regardless of whether engineers and scientists find another approach that works better for consumers. But in fact, the Internet already is showing its age, and network management has become a real challenge, especially with the advent of bandwidth-intensive applications such as bit torrent.

The Internet is the result of significant competition, innovation and investment. As companies offer new services through the Internet, such as on-demand movies, telemedicine and online classrooms, they will eat up increasing amounts of bandwidth. Net neutrality legislation would prohibit broadband providers from offering premium service to these high-bandwidth content providers for an added fee.

Net neutrality mandates would stifle innovation when providers lose the flexibility to experiment with business models to meet the infrastructure demands of the evolving Internet. Consumers will be left with fewer choices from this loss of investment and real bottlenecks that will hinder bandwidth-intensive applications.

This morning the Senate Commerce Committee will debate Net neutrality at a hearing titled the “Future of the Internet.” I expect the anti-market, pro-regulation extremists to support Net neutrality, but I’m very disappointed that a purportedly conservative group is jumping on the big government bandwagon.

Michele Combs, the president of the Christian Coalition will testify at the hearing in favor of regulating the Internet. While the organization strongly supports imposing federal indecency rules on speech on television and cable networks, they now claim a “free speech” rationale for supporting government control over the Internet.

Like the rest of America, members of the Christian Coalition benefit from greater competition and technological innovation. The marketplace provides options like family-friendly ISPs and parental controls. However, under Net neutrality mandates, it is questionable whether such options would be legal. Requirements to treat “all content equal” requires a one-size-fits-all approach that may eliminate innovations that allow better management by parents of what their children can access on the Internet.

Ms. Combs would better serve her members by listening to leading conservative, Sen. Sam Brownback , Kansas Republican. In a “dear colleague” letter to senators last month, Mr. Brownback argued against Net neutrality. He said, “It must be recognized that ‘network neutrality’ is anything but neutral. In practice, it amounts to the government, rather than competitive markets, selecting which business model best suits industry.”

It is clear that conservatives support free market competition and private property rights, and Net neutrality violates those fundamental conservative principles. In effect, advocates of Net neutrality are calling for a set of “dumb pipes” regulated by the government. Not only would this reduce incentives to invest in broadband deployment, but it would also limit the innovation that has defined the Internet’s evolution. “Net neutrality” mandates sound very much like the regulated telecommunications industry I used to analyze in the classroom, and they have the potential to recreate the same costly inefficiencies that harm consumers.

Dick Armey, House Majority Leader from 1995 to 2003, is chairman of FreedomWorks, a national grass-roots advocacy organization dedicated to lower taxes, less government and more freedom.

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