FCC takeover of Internet will kill it

posted at 2:55 pm on June 21, 2010 by Ed Morrissey

The effort by the FCC to reclassify the Internet as a “public utility” has no legal or technological basis, writes CNBC technology editor Dennis Kneale today, and should be stopped before Julius Genachowski kills the golden goose.  Top-down control of the Internet in the same manner as broadcast communication and the “rotary-dial telephone” will either kill the Internet or “tame” it into stagnation and decline:

For almost two decades the U.S. government has kept its meddlesome mudhooks off the Internet, freeing it to spread its kudzu-like tendrils into the global economy. And it worked.

The FCC took a big step this week to end all of that. For the first time, the Federal Communications Commission proposes using a set of 75-year-old phone regulations to oversee the Net of the 21st century and have a say in the prices that companies like AT&T and Comcast can charge. And set rules for what traffic they must carry. (Comcast is acquiring a 51 percent stake in NBC Universal’ CNBC’s parent company. The deal is awaiting regulatory approval.)

Some telecom execs say the FCC’s agenda is downright radical. It could thwart high hopes for the wireless Internet, centerstage of the next digital revolution. The agency assault could restack the pecking order of winners and losers and reshape their stock prices, affecting the portfolios of millions of retirees and investors. It would impose new burdens on big carriers, while granting new power to content purveyors like Google and Yahoo.

At stake is billions of dollars that carriers like Verizon and AT&T spend each year to spruce up their networks to carry more digital bits. They will slash their spending if the feds restrain their upside; that could hurts jobs growth in high-tech, which employs well over two million people in the U.S.

Kneale has a historical basis for this claim.  When the FCC first started licking its regulatory chops over the Internet, AT&T responded by cutting back capital spending for several years.  It took a court ruling that placed the Internet out of their reach to get Ma Bell back into the game, which helped lead to an explosion of investment, innovation, and growth.  The lineup of providers shows the kind of competition already in the marketplace in the Internet, which makes the “public utility” argument rather silly.

Kneale also points out the lack of historical basis for the FCC’s claim of jurisdiction:

The shareholders of AT&T and Verizon and Comcast and TimeWarner Cable paid to build those fat pipes—not government. And the carriers made that investment without monopoly protection, unlike the phone networks erected over a century ago.

Exactly.  This is an issue that deserves a far higher public profile than it is currently receiving.  It involves property rights of innovators in competitive markets, speech rights for those who operate on the Internet, and the regulatory overreach of government in the one section of the American economy that has shown steady growth and innovation during boom and bust times.  Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

I already know the answer.

AUINSC on June 21, 2010 at 2:57 PM

Ace-quality HTML once again, Ed. *claps*

lorien1973 on June 21, 2010 at 2:57 PM

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

Oh, I think we’ve all got good ideas why, starting with the flow of information and then continuing on to the easy order of products and services at-will which aren’t from union-approved sources.

teke184 on June 21, 2010 at 2:57 PM

I really dislike this administration. A lot.

Cindy Munford on June 21, 2010 at 2:58 PM

It’s a twofer, taxing and content. They can’t do any better then that.

Cindy Munford on June 21, 2010 at 2:59 PM

Dumb question. If this goes through and we get congress in the election. Can we overturn or do we have to wait until 2012, a new FCC, etc etc etc?

gophergirl on June 21, 2010 at 2:59 PM

I can’t imagine why having the government try and regulate the internet that Al Gore created would be a bad idea at all….I mean, look at how well the Post Office does!

search4truth on June 21, 2010 at 3:00 PM

The shareholders of AT&T and Verizon and Comcast and TimeWarner Cable paid to build those fat pipes—not government. And the carriers made that investment without monopoly protection, unlike the phone networks erected over a century ago.

I never thought I’d agree with Dennis Kneale he’s dead on here.

Mike Honcho on June 21, 2010 at 3:01 PM

Study the people and their agenda behind all this. For them that is a feature not a bug.

CommentGuy on June 21, 2010 at 3:01 PM

Subversion of the government’s control will be an interesting technological project. Imagine a “shadow internet” made up of entrepreneurs in their garages running wireless nodes linked to one another. It’d make a great sci-fi novel. Or, a great future history book.

joe_doufu on June 21, 2010 at 3:02 PM

What are the outer limits of this (mis)administration?

Gohawgs on June 21, 2010 at 3:02 PM

Top-down control of the Internet in the same manner as broadcast communication and the “rotary-dial telephone” will either kill the Internet or “tame” it into stagnation and decline

If they kill the internet, what the hell is left in this country? Manufacturing jobs are going overseas(and crap-and-betrayed will only make it worse). Medical innovations will take a nosedive thanks to Obamacare. And offshore oil drilling could go the way of the dodo. What is this country’s economy gonna be built on? Public sector jobs?

Doughboy on June 21, 2010 at 3:02 PM

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

For the same reason that Chinae and Iran does it. To control information to the population and stifle dissent . It’s ALWAYS about control with these freaks.

Guardian on June 21, 2010 at 3:03 PM

The Obama administration wants to kill it because the Obama administration wants to kill everything, provoke more crises, use those crises as pretexts to seize more control, provoke still more crises, use those crises as pretexts etc., etc., etc. It won’t end until we can finally pry the Obama administrations’ greasy greedy fingers off the levers of power and send the whole rotten bunch back to Chicago. (Or to prison. Or overseas, in permanent exile. Or heck, to Mars. I’m not particular.)

Aitch748 on June 21, 2010 at 3:03 PM

It just keeps gets worse and worse. Where is the tipping point?

petefrt on June 21, 2010 at 3:03 PM

It’s hard to control people when people are mobile. The internet allows too much freedom. Must control people.

fossten on June 21, 2010 at 3:04 PM

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

Why ?
Because if Hugo Chavez does it
so should Barack Hussain

macncheez on June 21, 2010 at 3:05 PM

The question I have, will these companies continue to give megga bucks to the d’s if this happens? Or will they be blackmailed into doing so.
Cindy,
You are nicer than I am, I really detest this bho and team. Hubby gets how I really feel daily, but I don’t want to get the ban thing!
L

letget on June 21, 2010 at 3:05 PM

The shareholders of AT&T and Verizon and Comcast and TimeWarner Cable paid to build those fat pipes—not government. And the carriers made that investment without monopoly protection, unlike the phone networks erected over a century ago.

I never thought I’d agree with Dennis Kneale he’s dead on here.

Cr*p. This is what happens when you have five beers for lunch, kids.

Mike Honcho on June 21, 2010 at 3:05 PM

Obama: All your base are belong to us.

lorien1973 on June 21, 2010 at 3:07 PM

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

Well, we know why, don’t we?

Midas on June 21, 2010 at 3:07 PM

Combine this with efforts to bail out print journalism and you see a trend.

Hugo Chavez is a piker compared to this guy.

kurtzz3 on June 21, 2010 at 3:07 PM

letget on June 21, 2010 at 3:05 PM

I don’t want to get banned.

Cindy Munford on June 21, 2010 at 3:07 PM

There must by some wealth here that BHO wants to redistribute…

d1carter on June 21, 2010 at 3:07 PM

All part of the plan.

Kill it to help kill the world economy.

Kill it to prevent the dissemination of information and opinion.

Despots and communists all hate the internet… And we have a ‘twofer’ in 0bama & Co.

LegendHasIt on June 21, 2010 at 3:09 PM

Makes sense from their point of view – this isn’t about the internet, it’s about free speech.

Now you will need a platoon (battalion?) of lawyers to engage in free speech, just like you have to now to engage in any kind of collective ‘free’ political sppech (527s, etc.)

Once again, the WH will pick winners and losers.

ElRonaldo on June 21, 2010 at 3:10 PM

The Progs/commies/soc[whatever you want to call them], see the window starting to close on them and are going to be going full speed ahead to grab as much control as possible. These are going to be dangerous times and we need to “stop everything” right now. Party of no is what we want and need,not mealy mouthed “I’m sorry about speaking the truth” crap. Get some balls. The Founders have got to be rolling in their graves. Those guys put their lives on the line,thousands of our military have died, for what, so they can all give their limp handshakes across the aisle and tell themselves what patriots they are,,gag me.

retiredeagle on June 21, 2010 at 3:11 PM

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

Surly you jest. We all know why.

Tav on June 21, 2010 at 3:13 PM

Dumb question. If this goes through and we get congress in the election. Can we overturn or do we have to wait until 2012, a new FCC, etc etc etc?

gophergirl on June 21, 2010 at 2:59 PM

There’s always the torches and pitchforks option.

It’s like they are asking for it.

they = not us, not Americans, not patriots, not free market capitalists.

fogw on June 21, 2010 at 3:13 PM

Dissent must be quashed . Stalinists like Obowmao and Hillerbeast know what is best .

borntoraisehogs on June 21, 2010 at 3:16 PM

and we should all be asking why.

We already know why. Thug African usurper rulebook.

SirGawain on June 21, 2010 at 3:16 PM

How China of them.

John the Libertarian on June 21, 2010 at 3:16 PM

Obama will not be satisfied until there’s rioting in the streets. Well, even then he may not be satisfied.

Daggett on June 21, 2010 at 3:17 PM

Question:

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

Answer: Until someone proves my conspiracty theory wrong, Cloward Piven strategy.

shick on June 21, 2010 at 3:18 PM

Goebbels was unavailable for comment.

Maquis on June 21, 2010 at 3:18 PM

There’s always the torches and pitchforks option.

It’s like they are asking for it.

fogw on June 21, 2010 at 3:13 PM

Of course they are. And they’ve already seeded the media with WHO is participating in the violence — the anti-government right-wingers. Then comes the smackdown on all dissent.

Daggett on June 21, 2010 at 3:19 PM

How doth the Obama crocodile
Spin it’s deceiving tale
And test the nation with attempted fascist bile
On such a grand scale!

Cheshire Cat on June 21, 2010 at 3:19 PM

Remember not so long ago before cable went optical/digital, and we had all those lame local channels that nobody watched taking up valuable bandwidth. And the channels you really wanted to watch weren’t available on your system.

That was due to FCC must carry rules. The government drove the marketplace rather than the subscribers, who were paying for the product.

The government screw up everything it touches.

fogw on June 21, 2010 at 3:20 PM

Hey until big business rejects the Kelo ruling and rejects the notion that the government can seize private homes form little people for enconomic gain I don’t car eif Verizon gets their property taken away.

where was big business during the Kelo ruling? Oh that’s right they were on the side of government power grabs.

hypocrites all

unseen on June 21, 2010 at 3:20 PM

It just keeps gets worse and worse. Where is the tipping point?

[petefrt on June 21, 2010 at 3:03 PM]

They won’t step across it, I’m afraid.

They show us they are inside our OODA loop, engaging in asymmetrical warfare and ignoring all conventions.

Repubs are not a worthy opposition and they know it, while the public, like the frog, will never notice the water is gradually getting warmer.

Dusty on June 21, 2010 at 3:20 PM

send the whole rotten bunch back to Chicago.

Why bother? I hear Guantanamo has lots of empty cells! And the weather and food are the envy of every free terrorist.

honsy on June 21, 2010 at 3:20 PM

FCC takeover of Internet will kill it

NO Duh! Boy if we don’t kill this, this is our freedom of speech and we will be the ones who will be shut up!!!!!
I suppose this is the beginning – after this, it’s talk radio – I wonder if the gov’t has any idea of the sleeping giant they will be awakening.

Bambi on June 21, 2010 at 3:23 PM

I wonder if the gov’t has any idea of the sleeping giant they will be awakening.

Bambi on June 21, 2010 at 3:23 PM

If the giant is not awake by now it is DOA

unseen on June 21, 2010 at 3:25 PM

Gather… your… armies. ;)

Daggett on June 21, 2010 at 3:25 PM

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

Obama: We must control the people, we must control the message. I am THE ONE!!!

capejasmine on June 21, 2010 at 3:26 PM

You know,,I like that Guatemalan constitution more every day. You know, the one where it allows the military to do a coup when the powers act contrary to the constitution. I like it.

retiredeagle on June 21, 2010 at 3:27 PM

Shut up, he explained.

Red Cloud on June 21, 2010 at 3:27 PM

You know,,I like that Guatemalan constitution more every day. You know, the one where it allows the military to do a coup when the powers act contrary to the constitution. I like it.

retiredeagle on June 21, 2010 at 3:27 PM

That was Honduras, wasn’t it?

Daggett on June 21, 2010 at 3:28 PM

The shareholders of AT&T and Verizon and Comcast and TimeWarner Cable paid to build those fat pipes—not government.

Funny, I’d bet the GM and Chrysler bondholders felt the same way.

John Deaux on June 21, 2010 at 3:29 PM

Sorry,, right,,Honduras, I still like it.

retiredeagle on June 21, 2010 at 3:29 PM

Control information. Control the populace.

The Dems are facing defeat, and they’re not going to accept it.

They slammed health care down our throats. Now it’s freedom of information and free speech.

How much more are we going to give them?

Cody1991 on June 21, 2010 at 3:31 PM

Iran could unleash Hizzbollah in our streets any time.

Obooba admin states that terrorists are communicating through the internet, so it must be shut down temporarily except for medical and infrastructure uses.

Emergency legislation is passed to deal with domestic terror threat a la Patriot Act, including all the internet restrictions they want and more.

Internet comes up slowly over the course of months, new restrictions in place.

Voila!

Akzed on June 21, 2010 at 3:34 PM

I wonder if the gov’t has any idea of the sleeping giant they will be awakening. Bambi on June 21, 2010 at 3:23 PM

Some sleepers have their throats cut and never wake up.

Akzed on June 21, 2010 at 3:36 PM

So are there any lines in Vegas concerned with if there will be elections or not. How about in Hong Kong or other gambling “Meccas”[oh is this a bad word to use,,I hope so]

retiredeagle on June 21, 2010 at 3:39 PM

Let’s see…without government interference, the internet has grown by leaps and bounds, and become a vital part of our economy. In other words, it works.

Therefore the government must stop this travesty of the free market and reign it in with limits and control. If it ain’t broke, the government will take care of that.

JetBoy on June 21, 2010 at 3:40 PM

Let’s be honest here, most of the people who support net neutrality are people who use torrents a lot and want to use the power of government to force internet providers into keeping those torrents available so they can have their free movies etc.

clearbluesky on June 21, 2010 at 3:43 PM

Therefore the government must stop this travesty of the free market and reign it in with limits and control. If it ain’t broke, the government will take care of that.

JetBoy on June 21, 2010 at 3:40 PM

It’s the hot bed of free speech and the alternative media.

They don’t want it to flourish. They want it to die.

Cody1991 on June 21, 2010 at 3:48 PM

Ah, the birth of BlackNet.

Eeeeexcellent, Smithers….

mojo on June 21, 2010 at 3:50 PM

As a small biz guy with a web-only company that has already had revenues slashed because of gov’t meddling in the housing market, this is especially scary to me.

ornery_independent on June 21, 2010 at 4:01 PM

The FCC has no authority to do this. The proper response toi the greedy power hungry buggers is ‘Eat dung and die”

JIMV on June 21, 2010 at 4:02 PM

As a small biz guy with a web-only company that has already had revenues slashed because of gov’t meddling in the housing market, this is especially scary to me.

ornery_independent on June 21, 2010 at 4:01 PM

Yep – my family makes their living on the net too. This is very scary.

gophergirl on June 21, 2010 at 4:17 PM

It involves property rights of innovators in competitive markets, speech rights for those who operate on the Internet

Rights, rights, rights – it’s always about “rights” with you people…

/channeling BHO’s thought process

Neo-con Artist on June 21, 2010 at 4:27 PM

Let’s be honest here, most of the people who support net neutrality are people who use torrents a lot and want to use the power of government to force internet providers into keeping those torrents available so they can have their free movies etc.

clearbluesky on June 21, 2010 at 3:43 PM

Pretty much. Most of them complain that there’s little or no choice of ISP. The town I live in of 18,000 people has two major carriers and a local company that costs more. Businesses have more choice as there are many companies that provide various tiers of datacom services only to businesses.

What many don’t understand is that telcos and cable companies still have to deal with massive red tape and bureaucracies because of laws still on the books. I guarantee the reason why your neighbor can get DSL and you can’t is because you’re past some arbitrary boundry that some bureaucrat came up with years ago.

The bank I work for has two branches outside the Local Access and Transport or LATA area that we’re in. Instead of getting them on our Metro Ethernet network, we spend more money for T-1 lines at both branches which cost more.

Its all thanks to the 1982 judgement that broke up Ma Bell, the new AT&T cannot allow Metro Ethernet services to terminate in another LATA. In addition to spending more on the T-1 lines, I also have to maintain an additional router.

Lay-Z on June 21, 2010 at 4:28 PM

This is an executive branch bureaucracy deciding on its own to authorize itself to regulate *something* as it sees fit. No input from Congress, no Presidential executive order. Just a panel of bureaucrats announcing they are going to issue regulations.

Skandia Recluse on June 21, 2010 at 4:41 PM

If the combined effort of the private market RIAA and many movie studio could not keep torrents and other download sites of the Internet. The Internet is not going anywhere. It will just go deep underground. The Government would not only have to ban all Internet providers in the whole world but even the ones that run on telephone network such as iphone G3. Seize all serves everywhere and in every country. How many countries will go for that. Even if Google turns off its networks and server farms the internet will survive.

The money that is exchanged on the Internet lets say if it was a county and its GDP would be the sum of the G8 countries.

The only why that the internet will be turned off is if it turns into skynet and send the Cyberdyne Systems Series 800 Model 101 Version 2.4 out

tjexcite on June 21, 2010 at 4:43 PM

Think of all the BS we only know about because of the internet. It’s not about the economy this time.

It is awfully inconvenient for the regime to have independent journalists exposing SEIU thugs beating up peaceful protestors and catching Dem politicians when the mask slips.

Think of all the BS we only know about because of the internet.

bitsy on June 21, 2010 at 5:04 PM

This is the issue for the < 25 year olds to vote conservative.

Obama and the democrats want to regulate your facebook, tax you per picture uploaded or viewed, tax you per letter on your texts. You need to change the language you use, "they" don't like it. And comb your hair! But don't worry, because Obama passed laws that said we can track where you are on your cell phone with out a warrant.

barnone on June 21, 2010 at 5:08 PM

It will just go deep underground. …
tjexcite on June 21, 2010 at 4:43 PM

I hate to burst your bubble, but the “internet” is physical wires and right of ways. There are truly only 3 major long haul (nationwide) fiber optic networks and they sell/trade with everyone, including one another.

Also, to get from here to there, you go under ground or over head. You must cross roads, use bridges and other government owned properties and for every crossing the company must obtain a right of way from the government.

Drudge and Hot Air may get away with hosting in a friendly foreign country, but the advertisers would all need to be foreign too. That is how they got Amazon in a couple states. If a website for a company in a state got a click through fee from Amazon, then it was deemed local and subject to local laws/taxes.

barnone on June 21, 2010 at 5:18 PM

Let’s be honest here, most of the people who support net neutrality are people who use torrents a lot and want to use the power of government to force internet providers into keeping those torrents available so they can have their free movies etc.

clearbluesky on June 21, 2010 at 3:43 PM

If you’re debating the relative merits of net neutrality, you’re already off the subject. The FCC doesn’t have the authority to do this, whether net neutrality is a horrible idea or a great one.

tom on June 21, 2010 at 5:41 PM

FCC takeover of Internet will kill it

That’s the idea. Kill the ‘net = kill the opposition.

n0doz on June 21, 2010 at 7:08 PM

The time is coming for a redistribution of lead and let me be clear the socialist / democraps are the British.

Reality Checker on June 21, 2010 at 8:43 PM

I’m sure we can figure out how to connect multiple WISP in to its own net.

opusrex on June 21, 2010 at 9:30 PM

Instead of nurturing that growth, the Obama administration wants to kill it — and we should all be asking why.

I knew the answer to this two years before the ’08 election.

C’mon, Ed.

When will the scales fall from your ayes as to who, as well as what, Obama truly is?

You, one of the most prominent bloggers out there, should be among those raising hell over this, as well as leading the charge to stop what will turn out to be a government seizure of the Internet.

Dave R. on June 22, 2010 at 12:26 AM

why isn’t there more ‘noise’ about this? the silence in the media on this issue is deafening. I did read about it on the Fox News Wesbsite, WSJ I think and a couple of conservative blogs (on this one twice, I think), but I expected more passion and pathos on the part of the conservatives in defending the general network neutrality. But the conservative response/reaction (with a few exceptions) is rather anemic, more like ‘blah’…I thinnk this is HUGE, and huge potential to destory a very versatile and resilient sector of our ecconomy. why is that? And at any rate, if this enormity does occur and FCC takes over the internet, how do you overturn something like this? new congress/senate would do it, or new prez? can it be settled in courts?

jimver on June 22, 2010 at 3:05 AM

and sure, I forgot to mention Drudge…they linked most of the articles on net neutrality issue that I read in the conservative media…

jimver on June 22, 2010 at 3:06 AM

It will just go deep underground. …
tjexcite on June 21, 2010 at 4:43 PM

I hate to burst your bubble, but the “internet” is physical wires and right of ways. There are truly only 3 major long haul (nationwide) fiber optic networks and they sell/trade with everyone, including one another.

Also, to get from here to there, you go under ground or over head. You must cross roads, use bridges and other government owned properties and for every crossing the company must obtain a right of way from the government.

Drudge and Hot Air may get away with hosting in a friendly foreign country, but the advertisers would all need to be foreign too. That is how they got Amazon in a couple states. If a website for a company in a state got a click through fee from Amazon, then it was deemed local and subject to local laws/taxes.

barnone on June 21, 2010 at 5:18 PM

Satcom.

Slowburn on June 22, 2010 at 6:08 AM

The feds MUST be kept out of the internet business!

tx2654 on June 22, 2010 at 8:46 AM