Net neutrality is the last hope of American democracy

Every day we see more evidence that income inequality has accelerated over the last few decades, leaving middle-class people frozen in stagnant wages, trapping the poor in permanent misery and enriching a small group of Americans as if they were Roman senators.

The trickledown effect so championed by President Reagan and his ideological successors is actually an upward surge of wealth from America’s middle class to the very top of the income pyramid. The U.S. now has a higher level of income inequality than the United Kingdom, Bangladesh or Ethiopia.

{mosads}Our democratic system, based on the idea that you work hard and reach your dreams, is in danger. And with it, the social stability that we have enjoyed.

Now the FCC’s reckless plan to create a new Internet where giant corporations will be able to buy premium access to the digital highways and start-ups will be stuck in the equivalent of an unpaved road — while consumers pay the bill — is a serious blow to American democratic capitalism.

As founders of one of the big portals in the 1990s, we visualized that the Internet would have a massive democratizing effect. People everywhere would be able to receive and broadcast information, small companies would disrupt established business models, and politicians would be subjected to the pressure of the voters, not just the big-pocketed donors and lobbyists.

It has largely worked as envisioned. People in America today (and countries around the world) are ever more connected and informed. The capacity of one individual to spark a revolution of thought has been proven over and over again not just in America, but in places like Egypt and Iran.

While the Internet has hardly ushered in a utopia of people power and entrepreneurial muscle, it certainly has advanced the cause of human capital, opened doors to individuals across the world to seek new opportunities, and made new businesses possible, financeable and scalable like no time before in human history.

FCC Chairman Tom Wheeler’s effort to undermine net neutrality should be rejected. While being under the pressure of big broadband suppliers must feel like being waterboarded, his duty is to the nation and the citizenry, not just to corporations.

Wheeler’s plan will create competitive roadblocks to new market entrants. Like Microsoft’s PC monopoly of old, start-ups will exist at the whim of giant companies’ intent on maximizing their market share, limiting competition and in some cases, establishing quasi-monopolies.

Think of the current cable TV model. What is the customer’s option if dissatisfied with the service or offended by having to buy hundreds of cable channels of zero interest? Effectively, the only option to escape your local cable monopoly is to “cut the cord” and use the Internet as a TV distribution device.

But under Wheeler’s plan, my consumption of Hulu, Netflix or YouTube may in the future include a surcharge. If Netflix is paying a fee for fast delivery of its stream, it means that I will be paying for that fee as a consumer. Millions of Americans are likely to be priced out of such a scheme, blocked from using broadband.

It should be a great concern that the broadband operators are asking for more regulation of the industry. As Adam Smith famously wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. … But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.”

President Obama and Congress must put a stop to the FCC’s misguided actions, negative changes that could unplug America’s digital economic juggernaut while further weakening the power of the citizen.

Espuelas, a Henry Crown Fellow at the Aspen Institute, is a political analyst on television, radio and in print. He is the host and managing editor of “The Fernando Espuelas Show,” a daily political talk show syndicated nationally by the Univision America Network. Contact him at contact@espuelas.com and via Twitter @EspuelasVox.