Regulating Everything from Bits to Business Plans

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‘[The following is an excerpt from IPI’s comments filed today with the Federal Communications Commission (FCC) in its Notice of Proposed Rulemaking to regulate the practices of Internet service providers (ISPs)]’

The intent of Congress to increase competition and innovation in communications through the Telecom Act of 1996 is finally being realized. Congress intended to deregulate and thus invigorate the communications industry through competition and market forces-and it did just that.


The wisdom of this approach is obvious: The United States today has a vigorously competitive communications marketplace, and consumers have access to a tremendous array of products and services, and all of the research and rollout have been paid for through private risk capital at no cost to the taxpayers.

But the FCC didn’t initially see the wisdom of Congress’s intentions, and only after losing in federal court multiple times did the agency yield and properly implement the 1996 Telecom Act.

In particular, after the FCC decided to not regulate broadband networks, private investment in new broadband networks exploded, and today most U.S. households have access to high-speed broadband networks. The pace of that broadband rollout adds hundreds of thousands of homes and business to high-speed networks every year.

It is thus troubling and puzzling today to see the FCC backsliding and moving in the direction of reregulating the very same broadband networks that it freed from regulation only a short time ago.

There is no demonstrated reason for the FCC to begin applying new regulations to this vibrant and competitive broadband marketplace. There is no problem to solve, no consumer harm to address, and no market failure to correct.

Nevertheless, the FCC is considering regulating “everything from bits to business plans” in the broadband market. In our opinion, a return to such a flawed regulatory approach will almost certainly discourage investment and job creation, frustrate innovation and result in loss of consumer benefits.

Our conclusion is that the FCC is being urged to implement new regulations for ideological reasons alone. And we believe that regulations should only be implemented when there is clear evidence of consumer harm or market failure, not simply because newly empowered regulators have a different vision for what the communications marketplace should look like.

In a market economy, it is the participants in the market who determine what a particular market looks like and what results it delivers, not government regulators operating under the assumption of perfect knowledge.

The FCC should not implement new regulations on the broadband marketplace, but if it does, Congress and the courts should stop them.

‘TechBytes is published by the IPI Center for Technology Freedom of the Institute for Policy Innovation. TechBytes is distributed via email, as well as through the website at’