The Commerce Clause of the U.S. Constitution may not seem like much at first glance: “Congress shall have power…to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” But those words have made a huge difference in making America an economic powerhouse, and more cohesive to boot.
Because of the Commerce Clause, regulating interstate commerce falls to the federal government, not the states. The federal government may not always do the greatest job of it, but having one regulatory regime means that the 50 states are not allowed to throw up Byzantine bureaucratic barriers to entry for products coming from other states. This allows for a lot of competition for hundreds of millions of customers, pushes prices of goods and services down, and creates a truly national market and culture that many other nations envy.
For instance, Canada doesn’t have anything like our Commerce Clause. Predictably, provinces often work to make it difficult for their next-door neighbors to come in and do business. As a result, most provinces are more economically integrated North-South, with the U.S. states just below them, than East-West. And thus Canadians stream across the borders on long-weekends to ransack American retail outlets.
Now, with a national broadband framework rule looming from the Federal Communications Commission, many progressive activists are trying to push a novel theory out to state governments. The Internet, they would have us believe, is not about interstate commerce. And states that don’t like the ruling should feel free to pass their own regulations and gum up the works.
Understand that most of these activists generally oppose state sovereignty on all other matters and are perfectly content with the federal government making one-size-fits-all decisions for all 350 million of us.
So what makes the Internet so different? Honestly, it has to do with Donald Trump. The Federal Communications Commission Chair (FCC) that this President appointed, Ajit Pai, is seeking to roll back anti-investment and anti-innovation regulations imposed by the previous FCC under Title II. Chairman Pai’s proposal would promote a “light touch” classification of the Internet; the same approach that allowed it to thrive during the first two decades of its public use.
The above-mentioned progressive activists love — and I do mean love — these regulations. So much so, that if Chairman Pai’s proposal is realized, they’re encouraging deep-blue states to stick it to President Trump by passing their own mini-Internet regulations to stifle investment and innovations.
It’s a foolish idea; one reeking of politics.
“It makes absolutely no sense to treat the internet one way in one state, while treating it differently in another,” argued Consumer Action for a Strong Economy President Mathew Kandrach in the Hill newspaper. “Doing so would create a new wave of regulatory uncertainty, economic inefficiency, and consumer confusion.”
And as Bret Swanson of the American Enterprise Institute has argued, “as the internet seeps further into every economic and social act, this does not mean that states will lose all power to govern. But to the extent that Congress, the FCC, and the FTC have the authority to protect the free flow of internet activity against state-based obstacles and fragmentation, they should do so. In its coming order, the FCC should reaffirm the interstate nature of these services.”
A good FCC order would foster more competition among broadband providers all across the country, leading to intense competition, more choices in the kind of broadband consumption we want, and lower prices.