For Internet access, keep free-market ways

At our recent broadband hearing, a witness from satellite company
WildBlue opened with Will Rogers’ observation that “[i]t isn’t what we
don’t know that gives us trouble, it’s what we know that ain’t so.”

 He used the quote to challenge two pieces of conventional wisdom: 1) that satellite companies can’t provide high-speed broadband service at affordable prices; and 2) that we need government subsidies to make broadband available to rural America. He said WildBlue, which already provides broadband service, would soon complete upgrades to offer faster speeds for about $49 a month, without government subsidies.

{mosads}His testimony further demonstrated how subsidies could actually be harmful. Satellite might be more economical in providing broadband to parts of rural America than wired services because of the high cost of running phone or cable lines large distances over challenging terrain. But satellite will not be able to compete if subsidies, such as from the broadband grant programs created by the stimulus package or the Universal Service Fund, allow his wired competitors to offer service at below-cost rates.

This is a perfect example of how regulations meant to help can actually hurt our policy goals while taking more money out of the American taxpayers’ pockets. At the hearing, it reminded me of another Will Rogers quote: “Be thankful we’re not getting all the government we’re paying for.”

 Our history of communications policy is rife with examples of the best regulatory intentions going awry. More often than not, advances come despite regulation or, as with our Internet policy during the past couple of decades, from our decisions not to regulate.

Take long-distance service, for example. For years we sought to promote competition and lower prices by regulating rates. In the end, what had a bigger impact was the rise of wireless services and their flat-rate plans, as well as our relaxation of prohibitions on local phone company entry into the long-distance business.

The deregulation allowing local phone company provision of long-distance was paired with mandates they share their infrastructure with new entrants into the local market. Those regulations, however, discouraged competitors from investing in their own facilities and also resulted in a prolonged series of court battles. What eventually made the real difference was not the local service mandates, but the rise of the Internet. Voice over Internet protocol has enabled cable and Web-based companies to enter the local phone business and drive prices down.

The rise of the Internet itself is truly a great deregulatory story. What started as a government-run network for sharing research exploded into a force for mass communication, entertainment and commerce when we turned it over to the private sector and lifted restrictions on its use by commercial entities and the public.

Recognizing the need to allow this new communications technology to grow, Republicans and Democrats in both the administration and Congress fought to keep government involvement to a minimum. Congress eventually codified this deregulatory notion in 1996 when it added section 230 to the Communications Act. That section makes it the policy of the United States “to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.”

And what eventually turned the Internet into a fast (and increasingly faster) broadband platform from a bleating and plodding dial-up service was continued decisions to deregulate or refrain from regulating. A court case ending the forced sharing of phone companies’ copper facilities helped spur DSL investment.

 An FCC decision not to regulate cable broadband in the first place created the great rivalry with the phone companies that continues to push advancements in broadband today. Another FCC decision not to force sharing of phone companies’ fiber facilities further spurred investment in that rivalry. And while old FCC regulations did require phone companies to share their wholesale data transmission capabilities if they used them for their own data services, the FCC has never regulated the retail side of the phone companies’ broadband Internet service.

The FCC would eventually end regulation of the phone companies’ wholesale data transmission service as unnecessary in light of competition. And refraining from regulating wireless broadband is now helping the Internet go mobile.

The unregulated Internet is now starting to help spur additional video competition. More and more commercial programming is becoming available over the web. And YouTube has done more to put ordinary citizens both behind and in front of a video camera than forcing cable companies to carry public, educational, and government channels ever has.

The more I think about it, perhaps we should have made Will Rogers an FCC commissioner. I’ll leave you with another of his quotes that rings true far more often than it ought to: “Things in our country run in spite of government, not by aid of it.”

Stearns is the ranking Republican on the House Communications, Technology, and the Internet Subcommittee