Thursday, October 22, 2009

Ronald Reagan once famously said, “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

It appears that the former president foresaw the fate of the Internet. When the Internet first began to catch on with consumers as a new marketplace for purchasing books, clothes and music, state and federal legislators stepped in and attempted to tax Americans’ Internet use.

Fortunately, a bipartisan group of lawmakers in Congress came forward and stopped taxation of Internet usage before it could start. But as Internet use continued to grow, the government just couldn’t resist not regulating the greatest modern invention since the light bulb (particularly once the ability to tax it was taken away.)

On Thursday, the Federal Communications Commission will vote on whether to regulate the historically open architecture and free flow of the Internet. The commission will seek to impose “net neutrality” rules that would rein in the network management practices of all Internet service providers, including wireless phone companies.

These new rules should rightly be viewed by consumers suspiciously as another government power grab over a private service provided by private companies in a competitive marketplace. Does this sound familiar? It should.

Earlier this year, the government moved to control much of the auto industry and the banking industry, so it should come as no surprise that the government now wishes to control the technology industry by regulating its very core: the Internet.

This government take over of the Internet will stifle innovation, which will in turn hinder job creation. The technology industry is the fastest-growing job market behind the health care industry.

In fact, the high-tech industry added over 77,000 new jobs in 2008 while most industries cut jobs due to the difficult economic times. Compare these 77,000 new (and generally high-paying) jobs to the 30,000 jobs the $787 billion, taxpayer-funded stimulus program has created or “saved,” according to a report released last week by the Recovery Accountability and Transparency Board. Maybe a better stimulus package for this 21st-century economy would be an administration decision to keep the Internet free of government control and regulation.

However, the administration can’t resist imposing regulations on the Internet - particularly since Google Inc. and other Internet content providers were promised the imposition of such regulations as these companies seek to control what consumers see and don’t see on the Internet - despite the fact that these regulations will only serve to hurt consumers.

Last year, almost 75 percent of all Americans went online, and 55 percent of all adult Americans have a high-speed Internet connection in their home. All of these Internet users benefited from the “fundamental architecture of openness” that is the Internet, according to the chairman of the Federal Communications Commission.

The light-touch regulatory approach toward the Internet that was put forth by previous administrations has brought Americans social networking, low-cost long-distance calling, texting, telemedicine and over 85,000 almighty “apps” for the iPhone. It also brought us Twitter, YouTube, Hulu, Kindle, the BlackBerry and the Palm. It allowed the Internet to change our lives forever.

The wireless industry exploded over the past 20 years, in part due to limited government regulation. Wireless carriers invested $100 billion in infrastructure and development over the past three years, which has led to faster networks, more competitors in the marketplace and lower prices in the United States compared to any other country.

Meanwhile, wired telephones and networks have become a slow-dying breed as they are mired in state and federal regulations, universal service contribution requirements and limitations on use.

Regulation kills innovation. Let’s not kill the Internet. An open and unfettered Internet may be the real stimulus during these difficult economic times, and it comes without a $787 billion price tag that is passed along to taxpayers at a significant cost for future generations.

John McCain is a Republican senator from Arizona.

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