“At its core, network neutrality is a struggle to see which, if any, federal agency has the legal authority to regulate the Internet. In the worst possible way, the Federal Communications Commission would like to be that federal agency. But this might be the worst possible outcome for consumers,” Harold Furchtgott-Roth writes for Forbes. “For more than a decade in countless decisions, the FCC has repeatedly held that broadband is not subject to the same costly and punishing common carriage regulations that the FCC imposes on telephone companies. Courts have consistently upheld those decisions.”

“The most straightforward reading of the court decision would be for the FCC to abandon its pursuit of network neutrality. Let Congress decide if a federal agency should regulate the Internet and if that agency should be the FCC,” Furchtgott-Roth writes. “But the FCC seeks a more complicated interpretation of the court ruling, one in which there is a path for FCC regulation of the Internet. That more complicated, and unpersuasive, interpretation might include some combination of technical findings or, problematically, deeming some or all of the Internet as a telecommunications service subject to the FCC jurisdiction.”

“Whether it is gamesmanship or politics as usual in Washington, the strategy of using courts to kick the can down the road is a sad form of government. Call it a casino government: gambling on the public dime in which everyone except the public wins,” Furchtgott-Roth writes. “The FCC asserts that it is merely trying to protect the ability of ‘content’ providers to reach consumers through the Internet without being blocked or paying extra for priority service to broadband service providers. But paying extra for better service is the norm in most markets. It is not a sign of ill-functioning markets. Major firms already have a wide range of avenues for their content to reach the Internet, many of which are based on paying more for higher quality, faster transmission to the Internet. Broadband firms are already disciplined by competitive wholesale markets in providing Internet access. It is not clear what additional advantage is provided by FCC regulation of these competitive markets.”

“Nor would there be any advantage to FCC regulation of retail markets. All but residents in truly rural areas have access to not one but several broadband providers. Practically all of these broadband service providers, usually in quite competitive markets outside of rural areas, allow consumers to pay more for better services. Regulating these competitive markets would have little value to consumers,” Furchtgott-Roth writes. “With its unlawful and backwards interpretation of partitioning the Internet, the FCC has little if any chance of winning in court. But the FCC will succeed in holding much of the Internet and Internet investment hostage for a few years while the FCC’s rule works its way through court to an inevitable defeat. If it is determined to harm a sector of the economy with excessive regulation and unwinnable court cases, the FCC should find a less critical sector than the Internet. The Internet and the broader information sector contribute disproportionately to the American economic growth, which could use help rather than governmental interference. The FCC appears determined to take its casino form of government to a different level — Russian roulette.”

Much more in the full article here.

Harold Furchtgott-Roth is a former commissioner of the Federal Communications Commission. He is a senior fellow at the Hudson Institute and founder of the Center for the Economics of the Internet. He is a former Chief Economist for the U.S. House Committee on Commerce. He was a Senior Economist for Economists Incorporated from 1988-1995 and, before that, he served as a Research Analyst for the Center for Naval Analyses. Furchtgott-Roth holds an S.B. in Economics from the Massachusetts Institute of Technology and a Ph.D. in Economics from Stanford University. He is a member of the American Economics Association and the Econometrics Society.

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

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