Is Congress Following China on Internet?

The Olympic Games open this week, and more than a few journalists are indignant that those attending may not have full and unfettered access to the Internet.But more complete Internet access for visiting journalists would not mask a greater problem: Any government that can dictate the terms of using the World Wide Web, for good or ill, is too powerful.Before sanctimoniously condemning the government of China, or the governments of dozens of undemocratic countries around the world, however, we might look carefully in the mirror, specifically at our own Congress. Addressing topics popularly known as “network neutrality,” Congress is considering legislation that would give the federal government a clear mandate to stand between American consumers and their beloved Internet.What does “network neutrality” mean? It’s anything but neutral, because it involves the federal government limiting the set of choices that service providers may offer to consumers, a condition eerily similar to the power exercised in China.Network neutrality is often framed as an issue over the government’s role in limiting contractual relationships between Internet providers and consumers in one or more of the following areas: (1) fee structures for different levels of service; (2) limitations on access to some sites but not others; (3) priorities for different bits of information, such as favoring voice traffic over other traffic, or (4) limitations on how much broadband capacity one consumer may use.Many in Congress want the government to decide. That appears to be Beijing’s view, as well. But there’s a better answer: Let consumers be sovereign.A consumer’s friend is not a government official but rather a sales representative offering a better deal on a service. Competition helps consumers; government micromanagement does not. Of course government regulation can help clarify and enforce property and contract rights, but those concepts are not the extent of pending congressional legislation.The most recent federal data show that only 0.1% of ZIP codes have no broadband service providers, and only 0.9% have just one. More than 95% of ZIP codes have three or more broadband service providers, and more than half have seven or more. Even those few consumers with only one provider benefit from competition in other geographic markets, as most major providers have nationwide offerings shaped by competitive conditions.And for all of the broadband competition in America, dozens of new firms are waiting eagerly to enter the fray. Businesses with new ideas and services vie with each other to compete in an unregulated environment — this is the American way. Current circumstances hardly require the forms of new Internet regulation being contemplated on Capitol Hill.Most Washington speculation assumes that network neutrality legislation would harm the major carriers, such as AT&T, Comcast, and Verizon. Those businesses would be harmed, but an even greater burden would be felt by the dozens of potential new entrants. Their funding would evaporate, and with them plans of entry. The greatest burden would be felt by consumers, who would see choices diminish and prices rise.Heavily regulated markets tend to be characterized by fewer firms, less entry, less innovation, and incumbent protection. Those conditions may suffice in other countries, but we in America should have higher aspirations.One of the few consistent lessons of 20th-century economic history is that government micromanagement of industries fail utterly. Countries that regulated these industries slightly less, such as America, fared economically much better than those that regulated more.Ironically, when the commercial Internet was born in the 1990s, politicians of both parties hailed its arrival as the product of little regulation, the absence of taxes, and the general hands-off approach of government. A technology for the 21st century was too promising to burden with the mistakes of 20th-century regulation.The Beijing government regulates the Internet in China not for economic gain but from fear of democracy. Journalists should witness the social and economic losses created by an overly powerful government in Beijing and make sure that Congress does not walk the same path.A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He can be reached at hfr@furchtgott-roth.com.

Is Congress Following China on Internet?

Is Congress Following China on Internet?

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