Why are Some in Washington So Focused on Regulating the Internet and Harming Small Businesses?

By at 11 April, 2019, 4:51 pm

U.S. House Votes to Regulate the Internet and Re-Impose Utility-Style Red Tape

By Karen Kerrigan

With so many other problems to solve, you would hope the new Democrat majority in the U.S. House would focus on the key issues that matter to the health and growth of small business. Instead, this week, they focused on passing a bill that would vastly regulate and undermine something that is helping small businesses – the internet.

This week, the U.S. House voted on a partisan bill that passed on a partisan basis (232-190) to re-impose intrusive and restrictive regulations on the broadband internet. The utility-style “Title II” regulations that the legislation would resurrect, were repealed by the current FCC on Dec. 14, 2017.  The so-called “Save the Internet Act” (H.R. 1644) that passed the U.S. House would reimpose the heavy regulatory framework preferred by the previous FCC.

The internet ecosystem and investment have never been stronger, even though supporters of internet regulation continually claim the internet will “explode” if these heavy-handed “Title II” rules are not applied.

In an April 8 letter sent to every member of the U.S. House, I urged opposition to H.R. 1644:

“Bipartisan legislation, rather than the regulatory-heavy H.R. 1644, will provide common sense rules and needed certainty, which will enable a continuous flow of investment and innovation that is the fuel for a dynamic internet ecosystem and economy.”

The letter spells out the harm to small businesses, especially small internet service providers (ISPs), if the old rules were to come back to life.  I added:

“Title II advocates have always been searching for a problem to regulate.  There is no market failure and – again – the internet did not ‘blow up’ when the FCC advanced its ‘Restoring Internet Freedom’ order.  Thankfully, entrepreneurs and small business owners are not duped by this mindless rhetoric.”

Small ISPs were extremely disappointed with the vote. America’s Communications Association (ACA) president and CEO Matthew Polka issued a statement following passage of H.R. 1644, which read:

“Small Internet Service Providers (ISPs) who are members of ACA Connects support an open Internet. They do not block, degrade or otherwise impair access to the Internet by their customers and are willing to have these restrictions written into law.

“Rather, than simply codifying Net Neutrality principles, H.R. 1644, under the guise of saving the Internet, takes a much different approach. The bill would revive Federal Communications Commission rules that turn ISPs into common carriers and impose onerous and outdated regulations on them. This added regulation would not make the Internet more open. It would only retard investment in higher performance broadband networks.”

Like SBE Council, ACA is pushing for a bipartisan solution that codifies open internet protections, but without massive regulation and control of the Internet.

Statement of Administration Policy: On April 8, the White House’s Office of Management and Budget (OMB) issued a statement outlining the benefits of light-touch regulation. According to the statement, if H.R. 1644 were presented to the President for his signature, his advisers would recommend he veto it:

“Since the new rule [the FCC’s Internet Freedom Order] was adopted in 2018, consumers have benefited from a greater than 35 percent increase in average, fixed broadband download speeds, and the United States rose to sixth, from thirteenth, in the world for those speeds. In 2018, fiber was also made available to more new homes than in any previous year, and capital investment by the Nation’s top six Internet service providers increased by $2.3 billion.”

Along with our partner organizations and allies, SBE Council will continue to push for common sense legislation that protects consumers and encourages private sector investment and innovation, which will make the internet stronger and allow for everyone to participate in the digital economy.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council   

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