Consider an industry as odious as that of automotive dealers. For most people, the act of purchasing a vehicle is a trying, unpleasant process. But as it is now, you have your pick of cars from your pick of brands, with your pick of features.
You have choices because of the minimal regulations against that industry.
Now envision that industry encumbered by sweeping, loosely-defined regulatory burden. Imagine how the dealerships would have to change the car-selling business. Of course, they would have to increase the prices to you, the consumer, to be able to afford the cost of compliance. But, beyond that obvious change, what else do you see? Flexible financing would vanish: No one dealership would be allowed to offer you an incentive if it would undercut another. Dealerships would lose differentiation: Dealers would be compelled to sell you any car you want, whether from their brand or not, and would have to exchange with other dealers to make the sale. Product selection would dwindle: Unable to move their own wide selection in inventory, dealers would emphasize and stock the cars they could sell most easily. Manufactured options would homogenize: As all dealers would consolidate inventory, the manufacturers would reduce variety in their lines. Individuals would suffer: As all manufacturers would cut back, cars would go from being personal expressions to utilitarian, cookie-cutter people movers.
This is no stretch: look at the indistinguishably similar cars of the Soviet auto plants for the decades of the Cold War. Under expansive regulation, nothing changed, and nobody innovated.
As of today, the internet—the business of which most consumers do not find odious at all—is subject to government regulation that has never before applied. Several months ago we published the series, “Neutrality’s Reality”, delving deeply into what little information the FCC had provided about its new laws. The actual text of the regulations has since become available.
The Federal Communications Commission—in a party-line vote—consumed a whopping three-hundred seventy-nine pages to conjure authority and reason for categorizing broadband internet service providers as subject to regulation. The actual text amending federal law, however, could fit on the front of one 8.5″x11″ page, double-spaced.
How much harm could so little law do? As much damage as the IRS could do to your checking account with a blank check.
The Commission professed in its proceedings that it would take a light-touch approach and would not stifle innovation. And yet the new law as written does not substantially reduce (forbear) the provisions of the antiquated law under which the Commission will now regulate the internet. Remember how having two tapes in your answering machine so that the greeting and the messages weren’t on the same tape was a quantum leap forward for its day? The Commission wants you to believe that Federal regulation didn’t stifle innovation in the phone networks under the same law.
The Commission has just given itself power that has not come from the Constitution or from the States. To do so, the Commission assembled nearly 400 pages of fluff to try to create a sense of legitimacy. Of course, to get public buy-in, the Commission also had to create an illusory threat. What is that trumped-up threat? That internet providers would slow down certain websites because of the cost of bulk data exchange between carriers. The following direct quote demonstrates the Commission’s (lack of) commitment to that end:
“We do not believe that it is appropriate or necessary to subject arrangements for Internet traffic exchange (which are subsumed within broadband Internet access service) to the rules we adopt today.”
So, today, the Federal government enacts its new authority, without basis, without bounds, and without shame. The government explicitly states it will not address the problem it invented. Instead, the government addresses the last-mile services that you as a consumer and a taxpaying citizen purchase. The law still leaves myriad questions unanswered. And, worst of all, the new law taking effect today subjects today’s internet to the stifling regulations of fifty years ago, rooted in the law of 150 years ago.
The Commission’s work is not done, and the regulation that just became law now gives the Feds tremendous leeway to control the internet, to enter into competition against internet providers, and to waste your tax dollars on free internet access for some (according to the government’s own documentation, under “Rural Healthcare” programs, no less). Expect much worse to come from the Commission in the months ahead.
The Democrat members of the Commission who wrote and passed this dangerous law quickly point out that “[e]xecutives from large broadband providers have also repeatedly represented to investors that the prospect of regulatory action will not influence their investment strategies or long-term profitability”. Of course providers haven’t changed their plans based on “the prospect of” new regulations: They can raise prices to offset their costs, and they can file suit to block the new regulations. And many of those same executives the Commission uses to defend its action did exactly that, bringing suit against the United States government the moment the law allowed.
They brought suit against the government just like every other business to which the government poses no threat, right?