Play to Win High-Tech Freedom

Katie Kieffer

3/21/2011 12:01:00 AM - Katie Kieffer

Your game-day challenge is preserving your high-tech freedom. Today, I will explain your online freedom’s biggest threat and then employ NFL pep talks that will inspire you to prevail.

On Dec. 21, 2010, the FCC essentially declared that the Internet and telephone communications are the same. You know, like how water and beer are both beverages so they clearly are the same?

The FCC took regulatory control over the Internet by passing net neutrality regulations through its “ancillary” authority (authority not directly granted by Congress, but a presumed extension of a different task Congress had assigned to it). Net neutrality allows the FCC to “reclassify” broadband as a “telecommunications service” rather than as an “information service” so that it can more easily regulate it.

The supposedly “independent agency” ushered in nothing more than a power-grab for the Obama Administration when the three Democrat FCC Commissioners outvoted the two Republican Commissioners.

Republican Commissioner Meredith Attwell Baker told the Practicing Law Institute that the FCC’s vote was "against the will of the courts, which have told us that we lack authority to act. And Congress, which has asked us bluntly not to act..." CNN reports that Commissioner Robert McDowell concurred: "The FCC is not Congress. We cannot make laws.”

Internet works great free, why control it?

Who ranks “Internet access and security” as their top concern? According to Gallup, pretty much no one. Well, no one besides politicians and agency bureaucrats. After all, the Internet is the hottest vehicle to attract people (voters) and money (campaign funds).

The President maintains that government control over the Internet prevents broadband providers from creating a super-fast service with selective content and pricing low-income people out of premium Internet.

A November 2010 Commerce Department survey revealed that the percentage of households with access to broadband has increased “across nearly all demographics.” The poor do have free Internet access at libraries, but, apparently, the president believes in a Constitutional “right” to the best Internet on one’s own computer.

Last week, the Newspaper Association of America said print advertising hit a 25-year low in 2010 and ad revenue is shifting to the Internet. Meanwhile, the financial success of Facebook and Groupon is sending investors online. J.P. Morgan Chase is creating a fund for Internet stocks. Solo investors are putting hundreds of thousands of dollars into high-tech accelerators.

Impact on businesses and consumers

My sense that big-hitters like Verizon, Comcast and AT&T feel intense pressure from the FCC to accept its terms, or go out of business. Verizon is taking the most aggressive response, filing a lawsuit challenging net neutrality regulations. Comcast and AT&T seem afraid to rock the boat too hard lest harsher regulations be issued.

A Comcast spokeswoman told me that Comcast is bound by net neutrality regulations for the next seven years, regardless if a court overturns them. Comcast agreed to these FCC terms in order to complete its January takeover of NBCUniversal.

Comcast will grow even larger if NBCUniversal accepts Blackstone’s recent offer to sell its 50 percent share of Universal Orlando. Anticipate a new Harry Potter attraction featuring “net neutrality” classes at Hogwarts.

AT&T’s recent Congressional testimony exposed its assessment that the FCC has out-stepped its legal bounds: “Since this debate began back in 2005, AT&T has consistently opposed any FCC regulation of Internet services or facilities. This is still our strong preference today. We feel the antitrust laws, the Federal Trade Act, and the discipline of highly competitive markets are more than adequate to police any potential abuses.”

Verizon CEO Ivan Seidenberg has said, “Proponents (of net neutrality) have a worldview that network providers and application providers, like Google, occupy different parts of the Internet: dumb pipes versus smart apps. This is a mistake pure and simple. It's an analog idea for a digital world. … You can’t create a smart economy by dumbing down the critical infrastructure." He also said that economic growth and development (think telemedicine) would struggle under the regulations.

Consumer costs will spike if corporations cannot act competitively and if they have to subsidize services to low-income users and rural areas. Quality will simultaneously go down if the free market no longer incentivizes corporations.

Give the government a yard now with net neutrality and it will throw for a touchdown. In January, Commerce Secretary Gary Locke released plans to create a government-run "identity ecosystem" or “national ID card for the Internet,” reports The Washington Times.

Net neutrality regulations are effective as early as midsummer, unless Congress or the courts intervene.

Stand up for free enterprise and innovation. Educate your friends. Voice your concerns to the FCC. Contact your elected officials.

Although the NFL is struggling to get its house in order, there’s no one quite as motivating as a passionate football coach. ‘Own this moment. Prevail.’