Budowsky: Net neutrality nuclear war

Before Tom Wheeler was named chairman of the Federal Communications Commission, he was paid handsomely to advocate the interests of the cable and telecommunications industries, which now have billion of dollars at stake in the net neutrality ruling the FCC will soon make.

Wheeler and other FCC commissioners are under the microscope in the net neutrality debate that is escalating into the policy and political equivalent of nuclear war in Washington.

{mosads}The Internet affects everyone. Public use of the Internet is on the road to becoming universal. Equal and affordable ability to use the Internet is essential to our education, livelihoods, entertainment, and access to news and information.

President Obama recently reiterated his strong support for net neutrality. Hillary Clinton, another champion of the cause, has said an open Internet is vital to freedom, democracy and human rights around the world.

The need for equal and affordable access to the Internet is comparable to the need for equal and affordable access to basic telephone service — the issue is not government regulation versus capitalism. The Internet must not follow certain sectors of the economy that have distorted true capitalism and become controlled by oligopolies that stifle competition and force-feed price gouging that imposes painful and unfair costs to consumers.

Without net neutrality, a handful of giant companies will dominate the gateway to the Internet and use their unrestrained power to impose punishing fees, charges and costs on hard-pressed customers that will be the equivalent of a punishing and regressive tax increase imposed by oligopolies and sanctioned by the FCC. Consumers will be imprisoned by the concentration of power, lack of true competition and unavailability of consumer choice that is at the heart of competitive free enterprise.

Do Americans want their Internet access to follow the model of their cable TV subscriptions, in which consumers have little effective choice and cable companies, challenged by declining subscribers and ratings, make up the difference by raising rates, merging with other cable companies, buying television networks and movie studios to further concentrate their power and dividing markets rather than competing with one another?

Has the concentration of cable and media ownership lowered prices for consumers as promised? No. Prices have risen. 

Has this concentration of power increased innovation? No. The greatest innovations have come from Internet sectors outside the cable industry, which is why cable operators now want to control and dominate that gateway to the Internet.

When was the last time Americans received a letter from their cable company announcing the good news that their cable bill has gone down? Oligopoly is not free enterprise. Price gouging that is sanctioned by the government would be crony capitalism, not fair competition. Consumers and voters are tired of being screwed!

The net neutrality debate is becoming a political nuclear war because it directly affects so many voters, not to mention the profits of some of the largest firms in the world. It involves vast sums of money from campaign donors and creates revolving door issues with lobbyists paid to influence government officials, including the FCC chairman, who presents a revolving door issue himself.

Wheeler recently said he wants to find a way to “split the baby.” Unfortunately babies do not do well when their bodies are dismembered. Consumers will not do well if the FCC imposes a solution that brings rip-offs forcing hard-pressed Americans to pay higher rates to oligopolist cable and telephone companies, while their incomes are stagnant or declining.

The FCC will make a huge mistake if the political nuclear war over net neutrality ends with its actions making Americans pay the price of crony capitalism created by Washington insiders. As net neutrality moves from the back rooms to the front pages, it will become a powerful populist issue in 2016 that will help Clinton and the Democrats who side with Internet-using people over windfall profiteering.

Budowsky was an aide to former Sen. Lloyd Bentsen and Bill Alexander, then chief deputy majority whip of the House. He holds an LL.M. degree in international financial law from the London School of Economics. He can be read on The Hill’s Contributors Blog and reached at brentbbi@webtv.net.