Wednesday, February 28, 2007

A tech legislative priority of congressional Democrats, “net neutrality,” threatens America’s unique Internet success, because it would reverse America’s 11-year, bipartisan policy to promote competition and not regulate the Internet.

Democratic presidential candidates Sens. Hillary Clinton and Barack Obama, are co-sponsors of Dorgan-Snowe (S.215), a net neutrality bill that for the first time would mandate broadband provide equal treatment to all Internet content. House Speaker Nancy Pelosi also supports net neutrality as does House Telecom Subcommittee Chairman Ed Markey, who plans a series of hearings soon to promote net neutrality legislation.

To justify massive new government intervention in the Internet marketplace, Democrats are busily manufacturing a “broadband crisis” and an “Internet blocking problem” that simply does not exist. Policymaking by false premise is always dangerous. It’s downright irresponsible when it threatens to undermine the unregulated Internet, one of the key engines of our nation’s economic and productivity growth.

Advocates of new net regulation or “net neutrality,” have made up a “parade of horribles” to scare people into the arms of big government regulators. They breathlessly claim government price regulation is necessary to “save the Internet” from a hypothetical discrimination problem, which they can’t define, prove or document. To advance their big-government agenda, these critics falsely claim there isn’t enough broadband competition to protect consumers; America is falling behind the rest of the world on broadband; and broadband deployment is too slow in reaching all Americans. They are wrong on all counts.

Far from falling behind the rest of the world, America has more broadband connections and more Internet users than any other country. We lead the world in deployment and investment in competitive broadband facilities. America’s pro-competition broadband policy has established more facilities-based broadband competition than any other country. As a result, Americans have a unique diversity of broadband access choices. And far from being slow, the rate of Internet and broadband adoption in the United States is happening faster than most any other communications service in U.S. history.

Behind America’s unique Internet and broadband success has been a greater reliance on the free-market and deregulation than any other country. Lurking behind the calls for net neutrality is a big-government agenda that seeks greater European-style price regulation and larger subsidies for broadband under the guise of “public-private partnerships.” Regulating the Internet would take away consumers’ diversity of choices and freedom to choose the best Internet service for their individual needs. Outlawing competitive differentiation would also destroy any investment incentive to dynamically increase the Internet’s capacity to handle video and exploding demand.

America has achieved unique Internet success from promoting competition and reducing regulation:

(1) The U.S. is the only country with a national cable infrastructure. Investing more than $100 billion over the last decade, the U.S. cable industry has built the world’s fastest universally-available (94 percent), wire line broadband access network.

(2) The U.S. has been uniquely bold in promoting facilities-based competition. Other nations still protect their national monopolies from facility competition by regulating wholesale broadband prices. While regulated reseller competition can produce short-term benefits, free-market, facilities-based competition is necessary to promote innovation, consumer choice and network redundancy long-term.

After some unproductive fits and starts, the bipartisan 1996 Telecom Act’s national policy of promoting competition, reducing regulation, and encouraging rapid deployment of new technologies, is finally working.

(3) America is unique in achieving extremely rapid deployment of multiple wireless broadband networks. Fueled by plummeting microchip prices, Verizon, Sprint, AT&T and T-Mobile have over the last three years invested billions of dollars to build out and improve their national wireless broadband networks. This came on top of America leading the world in the number of WiFi hotspots and Sprint and Clearwire beginning to build two additional national WiMax networks.

The critics who dismiss wireless as a competitor to cable modems or DSL are the same naysayers who said wireless would never be a competitive substitute for phone service. More than 10 million Americans have proved them wrong.

(4) Plummeting microchip prices are also increasing the bandwidth and lowering the cost of satellite broadband, making it an increasingly robust and affordable broadband alternative for those rural hard-to-reach households. The critics who dismiss satellite as a broadband competitor are the same naysayers who said satellite would never be able to compete with cable. The 30 million Americans who use satellite TV have proved them wrong again.

Don’t be fooled by critics of broadband competition and supporters of net regulation. Net neutrality is basically a debate between dueling visions for the Internet’s future. Should the Internet continue like it is today, unregulated with a broad diversity of consumer choice? Or should the government pass a new net neutrality law that would ration bandwidth to force one equal tier of Internet service, where average Americans would pay more to subsidize a free ride for online giants like Google?

There is no “broadband crisis” or net neutrality problem to solve with regulation. There is simply a choice: Trust the free-market that has made the Internet what it is today and leave the Internet alone; or abandon a decade of success in promoting competition and creating diversity of consumer choice, and have big government socialize the Internet to make it the same for everyone.

Scott Cleland is chairman of, a forum of broadband companies, and is a former deputy U.S. coordinator for international communications policy.

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