Study Shows Negative Effects of Net Regulation February 16th, 2010

As policy makers discuss the possibility of increasing government regulation of the Internet, many experts are expressing deep concern over so-called “net neutrality,” and the adverse consequences this policy change could unleash.  Now, a study conducted by the American Consumer Institute reveals the negative effects of net regulation on the U.S. economy and jobs – in a time when stimulus is an urgent national priority.

In particular, the study discusses how net neutrality would undermine job creation, investment, and innovation taking place across the Internet ecosystem.  How so?  First, consider the success of today’s broadband and IT sectors, which created nearly half of all new American jobs in 2008.  What does the future hold?  Over the next 10 years, broadband, information, communications and technology-enabled occupations are projected to be the fastest-growing U.S. professions.  Given this success, the study recommends identifying sectors, such as technology, that are aiding the economy and jobs – and not encumbering them with regulatory burdens that slow their economic performance.

To this point, the study found:

• Dollar for dollar, network companies (like AT&T and Verizon) create approximately twice the jobs that non-network companies create.
• For every $1 billion in revenue, network companies provided 2,329 jobs, while non-network companies provided 1,199 jobs.
• These network jobs are high-paying jobs, paying at twice the rate of other nonfarm jobs, and they are more likely to be green jobs.
• Network companies invest a much higher percentage of cash flow back into the economy.

The ultimate takeaway?  As ACI President Steve Pociask said: “Regulations that needlessly restrict the business opportunities of the companies that lead in job creation will discourage investment, slow the expansion of critical Internet infrastructure, and undermine efforts to put Americans back to work.”  To learn more, watch as the ACI discusses the study in this video featured on NextGenWeb.

Broadband Now: Time to Regulate the Internet? November 4th, 2009

Today, as the FCC considers greater regulation of the Internet, everyone from consumers to Internet pioneers is proclaiming the importance of maintaining a free and open Internet. What exactly is at stake for Americans? The ability for consumers to control their online experience – not to mention the fast-paced innovation and generous investment that has made broadband what it is today.

Who’s talking about the outcome of greater government control of the Internet? Here are a few highlights discussed in our latest edition of Broadband Now:

• Investment and Jobs. In defense of a free and open Internet, Verizon CEO Ivan Seidenberg noted his company alone invested $80 billion in communications networks in the past five years. He also highlighted a study that reports every $10 billion increase in digital investment creates nearly 500,000 U.S. jobs.
• Innovation. How will the FCC define “reasonable network management”? Innovators are concerned a government-led approach will slow the Internet’s evolution – a particular concern for the “Grandfather of the Internet,” David Farber, who fears this policy shift could be disastrous for consumers and innovation.
• A Growing Chorus of Concern. Even Google, a long-time champion of a more regulatory approach, recently changed its tune. On the day the FCC issued its proposed rules, Google’s CEO said “It is possible for the government to screw the Internet up, big-time.” And, meanwhile the ranks continue to grow, with well-respected experts questioning the need for the government having a larger day-to-day role in our Internet.

For more insights on Internet regulation, click on the video.

Guess Who’s Now Saying Government Could “Screw the Internet Up”? October 23rd, 2009

Rather than backing the FCC’s march toward a government-managed Internet—Google CEO Eric Schmidt chose yesterday to sound the alarms about broader government intervention.  Maybe it’s fair to say that Google has realized the likely consequences of a greater government role in the day-to-day operations of the Internet.

“It is possible for the government to screw the Internet up, big-time.” That is what Schmidt told the Washington Post in an interview yesterday.  This comes just days after he put his name on a letter to Chairman Genachowski that stated, “America’s leadership in the technology space has been due, in large part, to the open Internet … we applaud your leadership in initiating a process to develop rules to ensure that the qualities that have made the Internet so successful are protected.”  Those of us who support an open Internet, but oppose government managing online innovation welcome Google’s new cautionary warning.

Consumers, our economy and American innovation would all be better served if players across the Internet ecosystem worked together as a dynamic and collaborative industry.  A binary world of “dumb pipes” and “smart applications,” as Verizon CEO Ivan Seidenberg passionately argued this week, only hinders the Internet’s future potential for all of us.

It’s an encouraging sign for a constructive, workable path forward that Google, the company with the famous mantra “don’t be evil,” is now raising concerns about the burdens we all would bear if the government overreaches with new regulations.  Is it a game-changer

Jobs & Innovation on the Line in FCC ‘Open Internet’ Proceeding October 22nd, 2009

Proponents of Regulation Face ‘High Bar’ Demonstrating Public Interest in U.S. Policy Reversal

Today, the Federal Communications Commission held its monthly public meeting in which it voted to proceed with a notice of proposed rulemaking “to preserve the free and open Internet.” The following statement can be attributed to USTelecom President and CEO Walter B. McCormick, Jr.:

“The nation’s broadband service providers fully support the notion of a free and open Internet. While we look forward to constructively participating in what the chairman promises to be a data-driven process, we simply point out the irrefutable fact that all Americans enjoy today a free and open Internet in the absence of more regulation. It is equally true that no industry invests more in the U.S. economy than broadband service providers.  And, no segment of our economy created more jobs last year than the broadband-fueled information, communications and technology sector.

“All sides support an open Internet.  All sides want to see continued investment, job creation and innovation in this vital sector of our economy.  Where we differ is when it comes to whether a greater government role in the day-to-day operations of the Internet will help or hurt this important progress.

“We agree with several Commissioner’s comments that this rulemaking must look carefully across the entire Internet ecosystem, encompassing not only broadband providers, but also applications and content providers.  At the end of the day, ‘neutrality’ must, in fact, be neutral.

“Innovation—both within the network and on the edge—can and does coexist today with a free and open Internet.  Those calling for greater government intervention face a high bar in demonstrating the public interest in reversing a course that has been so successful for consumers, our economy and our national security.  We believe it would be a mistake to replace today’s open and dynamic environment with a government-managed  ‘mother may I’ approach to innovation.”

Verizon’s Seidenberg at SUPERCOMM 2009 October 21st, 2009

This morning, Verizon CEO Ivan Seidenberg made it clear – Verizon and companies like Google and Amazon don’t live in different parts of the Internet ecosystem and it would be a mistake for the FCC to give into network neutrality advocates who want a “binary world” of dumb pipes and applications.

You can read his entire speech here.

Video available at and crossposted to NextGenWeb

Washington Post Joins Growing Chorus of Concern on Net Neutrality Regs September 28th, 2009

Add another influential voice to the mounting dissent surrounding Federal Communications Commission Chairman Julius Genachowski’s proposal to dramatically expand and codify so-called net neutrality principles into regulation.

In its editorial this morning, The Washington Post asks the fundamental question at the center of the gathering storm:  “Is this intervention necessary?”

Read the editorial here.

The Open Internet* September 21st, 2009

In his announcement this morning that he will open a new regulatory proceeding aimed at expanding the role of government “to preserve the open Internet,” FCC Chairman Genachowski talked about the importance of transparency and reasonable network management.

We have championed these concepts at NextGenWeb.  One reflects the basic belief that consumers should be informed about their broadband service and the other allows network engineers—on a day-to-day, minute-to-minute basis—to keep the Internet secure and highly-functioning for the country and the world.

There was much to find encouraging in Chairman Genachowski’s remarks.  He reveled in the innovation and investment our nation has enjoyed over the last 40 years, ever since “a bunch of researchers in a lab changed the way computers interact and, as a result, changed the world.”

It also was encouraging to hear him note the importance of broadband-fueled investment and innovation to the future of health care, education, energy and other vital national priorities that a robust, well-managed Internet helps advance.

But most importantly, he pointed out a critical and central fact to the coming debate.  “We cannot know what tomorrow holds on the Internet,” he said, “except that it will be unexpected.”

It’s my hope that reasonable folks on both sides of the “net neutrality” debate hear the implications of that statement.  It makes a compelling case that we proceed with caution when it comes to greater government involvement in the day-to-day operations of the Internet.  Even the best and brightest innovators have trouble predicting and planning for the future.  Can Washington do a better job?

Chairman Genachowski rightly notes that broadband is “an unprecedented platform for speech, democratic engagement, and a culture that prizes creative new ways of approaching old problems.”  It is our hope many people will use the Internet to have a voice in these proceedings.  In fact, the FCC started a new site today, www.OpenInternet.gov just for this purpose. At the same time, we hope the debates will remain “fact-driven,” something the Chairman has said is of primary importance to something this critical to our nation.

We will have a lot to say during these proceedings. Much of it will be supportive because we’re big believers in the FCC’s existing principles, as well as transparency and network management.  But at times, we may also serve as a respectful voice of dissent, warning about the laws of unintended consequences and making the case for policies that support investment and innovation in the networks that allows consumers to have the kind of Internet experience they want. And, you will hear us talk about the true state of competition and consumer choice in the U.S. broadband market.

*All Americans enjoy an open Internet today.  But, all of us also deserve robust and innovative broadband networks in the future.  That’s the meaning of the asterisk on my headline: An open Internet is a good thing.  But the success or failure of the specific policies that aim to advance it lies in the details.

Cross-posted at NextGenWeb.org.

USTelecom Statement on Open Internet NPRM September 21st, 2009

Today, FCC Chairman Julius Genachowski announced his intent to issue a Notice of Proposed Rulemaking at the Commission’s October meeting that could significantly expand the role of the federal government in the day-to-day operations of the Internet.

USTelecom President and CEO Walter B. McCormick Jr. released the following statement:

“We were encouraged to hear the Chairman’s support of case-by-case enforcement and, more generally, by his assurances that we will have an open, inclusive and data-driven proceeding and that the details haven’t been pre-determined.  We do, however, remain concerned about the law of unintended consequences and a rulemaking that potentially goes too far.  All Americans enjoy an open and free Internet today.  And, I believe we all share the goal of ensuring our nation has a robust and innovative Internet in the future.  The broadband industry is a bright spot for deployment, employment and economic growth, and we are committed to doing business in ways that are consistent with reasonable network management and transparency.  We will engage in this process, and we appreciate the Chairman’s remarks today that he welcomes this participation.  We will proceed with an open mind, but we also believe the bar needs to be set very high when it comes to additional government interventions that could potentially disrupt the tremendous innovation and investment that have defined U.S. broadband for the past several years under the FCC’s existing open Internet principles.”

ITF Panel Looks for Common Ground on Net Regulation September 9th, 2008

Today I attended an Information Technology and Innovation Foundation panel titled “It’s Time to End the Broadband Policy Wars.”  Ostensibly, the goal of the panel was to look for common ground and try to figure out ways to temper the tone of the net regulation debate.  However, panelists seemed to agree that there would continue to be differing points of view; and the debate was impassioned at times.  Nonetheless, there appeared to be some consensus that we need to go back to “first principles” by articulating our broadband policy goals and re-focusing the debate on how to achieve them.Robert Atkinson of ITIF moderated and the panelists were Harold Feld (Media Access), Scott Cleland (Precursor), and Ken Peres (CWA).  Peres articulated a broadband policy objective of getting as much broadband to as many people as possible, though the question remains: how much and how far can broadband be deployed and adopted through which means?  Cleland pointed out that there are several biases in the way this debate is currently framed that color the conclusions one draws.  Cleland outlines those biases on his blog, where he also links to a more in-depth white paper about the framing of the debate entitled, “Don’t Be Fooled by the National Broadband Policy ‘Straw Man’: Exposing Three Hidden Policy Biases of Broadband Policy Proponents.“

FCC Rules on Complaints against Comcast August 5th, 2008

At the FCC’s August Open Meeting on Friday, the Commission made a much-anticipated ruling in its investigation of complaints against Comcast’s network management practices, especially with regard to peer-to-peer file sharing client BitTorrent.  On Friday, USTelecom President and CEO Walter B. McCormick, Jr. released the following the following statement:

“We believe that case-by-case enforcement is the right way for the Commission to proceed in evaluating claims that companies have not honored the FCC’s Internet policy principles. Given this Commission’s record of pro-competition, pro-investment broadband actions, we are confident that FCC action here will be carefully targeted. Carriers alone will invest nearly $60 billion in our broadband infrastructure this year, and coming years, providing consumers more options and faster speeds. Ensuring that this broadband investment and innovation continues is an essential mission of the Commission.  And, this action by the FCC demonstrates that legislation is not needed.”