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The FCC, The Internet, and Regulation

Posted by: George Hall

Once again the federal government is trying to find or create some injured party to justify the creation of a new regulatory diktat under the FCC to lay hands on the operation of the Internet. Actually in this case it is probably even worse. The Obama administration may not even care if they find an injured party to justify their desire to regulate something that they do not currently regulate. The Internet since its creation has been largely self regulating. I know, I have been involved with the Internet since 1983 in some form or fashion. It is safe to say that if the Internet did not exist, a notable portion of the growth in the economies of the USA as well as much of the rest of the planet would be a few notches lower than it is. So here we go again, If the feds find something untaxed they want to tax it. If they find something unregulated, they want to regulate it…at least the party currently in the White House does. Holman Jenkins has a great piece on this in the November 12th edition of the Wall Street Journal.

This fight over control of the Internet in free societies (the totalitarian countries have already mostly lost this fight) has been around for a long time. In the 90’s it was manifested in the form of private “peering agreements”. These were agreements that determined the traffic passing rules between two or more Internet providers. They were conducted between private parties and actually allowed some stability in the wild growth of Internet traffic in the 90’s and beyond. The government poked around but they could not get their hands around regulating this amorphous blob called the Internet back then. Now however the phone companies largely own all the major pipe in this country and many others…and, conveniently, they are already regulated heavily at every level of government. Net Neutrality as an argument is no different than private peering. It will work itself out on its own as the net continues to evolve. In fact most of the original net neutrality complaints about regulating access, prioritizing traffic and all the other bogeymen have been addressed…privately.

What is different today is what I had predicted some time ago, and the basis of the company that I now run. Video had and has the highest potential to bring the Internet to its knees for a couple of reasons. Video, even low quality video, consumes a great deal of bandwidth per user and actually requires more bandwidth than the video itself to avoid disruption inducing losses of video frames. I have written on this before. If you multiply the number of viewers of either a live video broadcast such as our company does, or a Video on demand broadcast such as Netflix it creates huge capacity demands. Peering agreements have in fact resolved all of these demand and bandwidth issues as they have occurred over time. You don’t hear much about private peering agreements anymore. They exist, but they solve many of the early and evolving issues that the rapid growth of the Internet has produced. This could not happen in a regulated environment.

The Obama administration’s penchant for expanding the regulatory state has nothing to do with correcting some perceived victim’s claims, but rather is about control for the benefit of control. If you doubt me, ask yourself, what problem would regulation of the Internet in the United States solve? What problems have not been solved by the lack of a regulatory framework? The answer to both questions is; none.

The Internet continues to be a shining example of freedom, free markets, free market principles and the resulting economic growth associated with those principles. In that sense it is an embarrassment to the bureaucrat who is compelled to regulate anything they see. The Internet has survived many prior attempts (survived at least in this country) to control it.

We used to say that once Information was on the Internet, there would never be a way to put the information back in the bottle. This strikes fear into politicians who wish to control information. Why do politicians like to control the flow of information in a free society. It is Adam Smith on display. Politicians, like the rest of us, generally act in their own self Interest. Sometimes information is bad for a politician and if they can’t control the bad information they surely want to. Other times as Holman Jenkins points out in an excellent op-ed in today’s Wall Street Journal, the urge to regulate comes from the desire of politicians to create new opportunities for lobbyists to support those politicians in their tireless work.

What is happening today however really has no basis in some aggrieved party that the government must correct. The Internet has been self regulating certainly since I first got online in the early 1980s. It is still largely free and untouched in the USA. The current effort by the Obama administration is nothing more than an attempt to regulate something that is not currently regulated by the government. Who would benefit from this type of regulation? Lobbyists. Who would lose? Internet end users who would slowly, but most surely, be taxed directly and indirectly and told how they will “benefit” by being able to surf the Internet by some new bureaucrat.

There is a large body of thought that says that any attempt by the government to regulate any aspect of the Internet in the United States will result in almost instant workarounds by those pesky little Internet anarchists that have kept the net running quite well all these years. If the government were to try to manage Internet content it would not succeed be it video or any other information presented online in any form. In fact the federal government in this country has never been able to keep up legislatively with the rapidly changing technology that is found on the Internet and elsewhere. The Internet is the largest collection of human thought ever assembled. So the regulatory state seeks to control the pipes that connect users to the distribution of thought. That never ends well.


George Hall Founder/President of VideoSSC. He has over 30 years’ experience as a high technology engineering executive. With significant experience in high performance computing, Military electronics, IP networks and Video Broadcasting. Board member Public Television. An author and frequent guest on technology programs and panels. He holds a BA in mathematics from Hillsdale College.



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