Special Report

Net Neutrality Is Theft

Obama's FCC lays the groundwork for government control of the Internet.

By 12.29.10

Send to Kindle

The Internet is not a natural resource. It does not grow on trees, or appear on the ground like dew on a spring morning. Nor does it operate by magic. The Internet exists only to the extent it is built, and then maintained and operated.

That requires big bucks, especially for broadband access. Broadband requires hundreds of billions if not trillions in investment to lay cables under streets, or to build and then launch satellites into orbit.

Where does that money come from? It comes from private investors. And when they put their money into the ground, or in orbit, to deliver to the people the new world of Cyberspace, those delivery vehicles are their property, just like the FedEx delivery trucks and planes that deliver your packages overnight are the property of FedEx.

Just as the government is not needed to tell FedEx what delivery routes to use, or how to get the packages to their destination overnight, it is not needed to tell Internet Service Providers and broadband operators how to deliver their access to Cyberspace. Those ISPs and broadband operators are subject to fierce market competition, and are driven by market incentives to get a return on all that investment money they put into the ground or into orbit. These factors force them to serve the people, far, far better than politics forces government to serve the people. That is why the Internet works so well.

As the Wall Street Journal explained on December 22, "There is no compelling reason to subject the Internet to more regulation. New devices and applications proliferate. Competition among broadband providers is robust, barriers to market entry low, and evidence of market failure non-existent."

FCC Pirates Board the Ship

Yet, without compelling reason, law or even politics on their side, on December 21, on a 3-2 party line vote, the FCC voted to impose its "net neutrality" rules on the Internet. What net neutrality means is that the government now has the power to decide how ISPs and broadband operators manage the access they provide to the Internet. It is as if the government decided to regulate how FedEx delivers its overnight mail, and what routes and what vehicles they use.

The FCC starts out by proclaiming that its net neutrality rules are just meant to ensure equal access by all to the Web. But as George Orwell showed us, that is how socialism started out too, until we later discovered that some were more equal than others. Once the founding principle is laid for government regulation and control, then that power can be used to regulate and control access to the Internet "in the public interest." In English translation, that means in the special interest of the Ruling Class. There are precedents in China and Iran for how that has worked out in practice.

Dissenting FCC Commissioner Robert McDowell explained further in the Wall Street Journal on December 20 why the FCC's net neutrality regulation makes no sense:

Nothing is broken and needs fixing, however. The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s. Its nature as a diffuse and dynamic global network of networks defies top-down authority. Ample laws to protect consumers already exist. Furthermore, the Obama Justice Department and the European Commission both decided this year that net neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure.

But what I have learned in life is that when something doesn't make sense, that means there is something else behind it that people are trying to hide.

And that is exactly what we have here. For what is behind the FCC's net neutrality crusade is reflected by an organization calling itself Free Press. That is an Orwellian title in this case, because what Free Press is for is the opposite of a free press. Free Press is one of those pseudo-Marxist front groups that Barack Obama has always traveled with so easily throughout his life. It is a grown-up, slick, sophisticated version of those campus radicals who shout down college speakers with whom they don't agree.

That is what Free Press is after with its "net neutrality" regulation. It is laying the groundwork for government control of the Internet. Once that it is established, it will be able to shout down websites with which it doesn't agree, if not shut them out altogether.

The entering wedge for net neutrality so far is not public freedom to access and navigate the Internet, which no one can credibly claim is not currently as free as could be. The entering wedge for now is use of Internet access and broadband services by competing commercial concerns like Netflix and YouTube, which consume huge proportions of bandwidth that can consequently interfere with use by consumers and others.

The problem has not become unmanageable yet, but threatens to be. The concern is that broadband operators will limit use of their service by other commercial operations that are effectively bandwidth hogs, to preserve the viability of their service for the general public, which is exactly what they should do. The supposed purpose of net neutrality regulation so far is to prevent broadband operators from doing this.

The solution is for broadband operators to charge heavier commercial users of their service heavier fees to cover the costs. Those heavier fees can then be used to build even bigger and better broadband and Cyberspace access, sufficient to fully accommodate even the heaviest commercial broadband users.

But that doesn't involve the expanded government power that Obama's FCC and net neut advocates like Free Press are after. So it is not on the table as the answer. Government takeover is the only answer they will consider, just as in health care. But if the government is going to take control over the big investment bucks broadband providers put in the ground or into orbit, America is not going to get the Internet investment and access it needs. That is why America's Internet access is already lagging behind other countries.

Democracy and the Rule of Law, or Not?

On April 6, 2010, the U.S. Court of Appeals for the District of Columbia ruled in Comcast Corp. v. Federal Communications Commission that the FCC does not have the power to issue net neutrality regulation. That decision resulted because the FCC already tried to impose an earlier, more limited version of net neutrality regulation through administrative adjudication of a particular case, rather than by broader rulemaking.

The case arose when Comcast responded to commercial users trading large files directly on its broadband service, rather than the users going through a central server. The FCC claimed authority to regulate the network management practices of Internet service providers like Comcast based on statutory language which authorizes the Commission to "make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions." This is Hugo Chavez style reasoning.

Rejecting that reasoning in an opinion written by one of the Circuit's more liberal Judges, David Tatel, the Court had to remind the FCC that "administrative agencies may act only pursuant to authority delegated to them by Congress." The Court said regarding the FCC's reasoning, "if accepted it would virtually free the Commission from its congressional tether." The Court added that "without reference to the provisions of the [FCC's governing] Act directly governing broadcasting, the Commission's ancillary jurisdiction would be unbounded." Indeed, the FCC's lawyers suggested to the Court in oral argument that in the agency's view it already has the power to impose price controls and rate regulation on Internet service providers and broadband operators.

Yet, the FCC just flouts this decision in going ahead and issuing its net neutrality regulations by rulemaking last week. Moreover, McDowell explains in the Wall Street Journal that it also flouts Congress, as before the FCC issued the new net neut regs, "More than 300 members of Congress, including 86 Democrats, contacted the FCC to implore it to stop pursuing Internet regulation and to defer to Capitol Hill." McDowell adds that this was "a rare event in Washington: a large, bipartisan majority of Congress agreeing on something."

And the FCC's action also flouts democracy and the American people. In the last election, net neut schemers like Free Press concocted a net neutrality pledge for candidates to run on. They got 65 pledge signers. All 65 lost at the polls. That is because the people are smart enough to recognize that government regulation over the Internet is going to be the opposite of Power to the People.

This FCC episode raises a broader question about the Obama Administration in the next two years. Because what we see here is what we are already seeing elsewhere in the Administration as well, from HHS Secretary Sebelius's takeover of health insurance, to the EPA's takeover of the economy based on global warming fantasies. That broader question is: Are we going to be governed by democracy and the rule of law in America, or not? What these opening skirmishes indicate is the Administration will severely test that proposition in the next two years rather than work with the newly Republicanized Congress.

The Republican majority in the House must be equally tough in responding to this fundamental challenge to the governance of America. One of those responses must be to act to remove Administration officials who attempt to flout the courts, the Congress, democracy, and the will of the American people.

The House should open hearings on removing FCC Chairman Julius Genachowski for failing to abide by the ruling of the Federal appeals court, as well as blowing off Congress, and the American people. Those hearings would be all about stopping the government's takeover of the Internet, an issue on which the American people overwhelmingly agree with the Republican view. The hearings should focus as well on removing FCC Commissioner Michael Copps, who has more openly expressed his opposition to freedom of speech for people with whom he doesn't agree, a viewpoint America cannot allow to anyone in position of authority.

Let me reiterate that Republicans can never consider impeaching Obama himself, no matter what he does. I have suggested before that one of the reasons to vote Republican for President is that Republican Presidents are subject to the rule of law, a principle established in the early 1970s. But Democrat Presidents are not subject to the rule of law, a principle established in the late 1990s. Democrat Presidents are free in our system of government to flout the law with impunity.

But Republicans can and must send the message that Administration officials perfectly prepared to assist in a slow motion coup against the rule of law and democracy will themselves be removed.

The ultimate solution, however, to protect the Internet, and freedom of speech in America, is to privatize the FCC. That would be accomplished by auctioning off property rights in the airwaves and broadcast spectrums. In the free market, private owners would use those resources to best serve the public, in order to maximize the value of their investment. That would apply to all radio broadcasting and TV broadcasting licenses. The FCC would not be needed then for any purpose, and should be abolished. The spectrum auctions would raise funds to be used to help balance the budget.

Senate Majority Leader Joe Manchin

News reports in the National Journal and RedState.com indicate just how fevered Obama's anti-democracy Democrat party has become. Those reports reveal that Harry Reid and other Senate Democrats are plotting to remove the filibuster from Senate rules when the new Senate convenes in January, which involves adopting the new rules for each House of Congress. This is another Hugo Chavez style move.

For almost 150 years, the filibuster has provided essential protection for deliberation and broader consensus in America's governance. It was the Senate filibuster that stopped cap and trade, the suspension of the secret ballot in union elections, and the outright socialized medicine of the public option in Obamacare. The filibuster is part of the basic American democratic tradition, and even our folklore, as demonstrated in the Jimmy Stewart film, Mr. Smith Goes to Washington.

Harry Reid is also under the delusion that any vote on repealing Obamacare would just be outright prohibited under Senate rules as well. Reid is quite simply unfit for service as Senate Majority Leader.

Republicans have 47 votes in the new Senate to get behind someone else other than Harry Reid as Senate Majority Leader. They can devote those 47 votes to another Democrat who may be able to draw additional Democrat votes as well, rather than to a Republican. 

A good candidate for this would be Sen. Joe Lieberman of Connecticut, who won reelection as an Independent rather than as a Democrat. Just three more Democrat votes are needed under this strategy to replace Harry Reid with this alternative. With 24 Democrat Senators up for reelection this year, this may be more plausible than it might seem otherwise.

If Lieberman can't round up a sufficient posse of Democrat supporters, another option would be newly elected West Virginia Sen. Joe Manchin, who won his race with an ad where he uses a rifle to shoot a bullet through cap and trade legislation. New legislation is going to be needed to stop EPA from imposing cap and trade on its own, which has already begun. Manchin could be in no better position to carry through on that then as Senate Majority Leader.

Like this Article

Print this Article

Print Article
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.