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CONTACT: Mike Wendy
May 19, 2010
(202) 969-2957
PFF Report Says FCC's Regulatory Leap Backwards
Wrong for Internet

Industry Self-Regulation and Light Touch Regulation a Better Approach to Grow Internet

WASHINGTON D.C. — Does the Federal Communications Commission's (FCC) call for a return to 1930's-styled regulation make sense for the Internet? Unequivocally "No," says a Progress & Freedom Foundation paper released today, entitled, "The Constructive Alternative to Net Neutrality Regulation and Title II Reclassification Wars." Instead of onerous regulation that stifles innovation, PFF authors Adam D. Thierer and Mike Wendy urge self-governance models and tools, and only a minimum of government regulation, to guide the expansion of the Internet.

In the paper, the authors question the FCC's recent announcement to reclassify broadband as a common carrier service. They believe such a move is a dangerous step back to a bygone era that led to "stagnant markets, limited consumer choices, and lackluster innovation," and one which, in attempting to protect consumers, "perversely harmed them by preserving barriers to entry that thwarted robust (or even minimal) competition..." The market has thrived in the absence of such regulation. Yet, contrary to this, the FCC's plan "represents a preemptive surrender on America's experiment with facilities-based competition," and the beginning of a "de-competition" policy. The result: less investment, innovation across the Internet ecosystem.

Thierer and Wendy call for an alternative model. In light of immense technological advances and rapid convergence taking place within high-tech markets, experts have begun coalescing around the idea that the present "service-based" regulatory model—exemplified by the Communications Act of 1934—cannot adapt to present day, let alone evolving, marketplace demands. An example of this consensus approach can be seen in a plan developed five years ago by the PFF—the Digital Age Communications Act (DACA). With the DACA model, the authors explain, "far from eschewing regulation entirely, there's still a role for regulators, albeit in a more limited manner, patterned to a large extent on notions of competition theory and consumer harm instead of 'title-based,' preemptive regulatory meddling."

Thierer and Wendy note that with DACA—along with other important self-regulatory efforts by industry and end-users—crushing, government prophylaxis can be kept at bay, better fostering competition, innovation and consumer choice. They conclude, "Efficient and effective self-governance models and tools exist now to guide the expansion of the Internet. This is not to say government involvement is never warranted, but clearly, the default setting is, and has ever been, a minimum of direct government regulation."

The paper may be viewed here. If you'd like more information, or would like to speak to the authors, pleased contact Mike Wendy at; 202-969-2957.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation