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    Proposed Net Neutrality Regulations: A Serious Threat To Internet Users

    02/03/2010

    In a recent interview with Steve Grove broadcasted on Youtube, Obama stated that he was a strong advocate of net neutrality regulations: 

    I'm a big believer in net neutrality. I campaigned on this. I continue to be a strong supporter of it. My FCC Chairman, Julius Genachowski, has indicated that he shares the view that we've got to keep the Internet open; that we don't want to create a bunch of gateways that prevent somebody who doesn't have a lot of money but has a good idea from being able to start their next YouTube or their next Google on the Internet. So this is something we're committed to.

    Proponents of net neutrality often claim that they want to keep the internet open and neutral-- some even refer to it as “internet freedom.” Yet, in reality, net neutrality regulations would involve significant new controls on the internet that would have significant implications for investing in innovation and broadband deployment. Net neutrality is a solution in search of a problem, with no evidence that broadband providers are restricting any Internet users access to websites on the Internet. In fact, according to the Cato Institute, 
    No firm or industry has ‘bottleneck control’ over or market power in the broadband marketplace; it is very much a competitive free-for-all.
    If adopted, net neutrality regulations would have significant unintended consequences that would severely limit competition and innovation. Examining the potential implications of new regulations to promote net neutrality, Bret Swanson in the Wall Street Journal finds
    If net neutrality applies neutrally to all players in the Web ecosystem, then it would regulate every component and entrepreneur in a vast and unknowable future. If neutrality applies selectively (oxymoron alert) to only one sliver of the network, then it is merely a political tool of one set of companies to cripple its competitors.
    As the Washington Post states, competition, not regulation, promotes innovation and investment in the internet: 
    Today's non-neutral market keeps the Internet competitive, forcing iTunes, YouTube and others to invest in an upgrade of the network. Regardless of how you get your Internet service, wWeb sites could differentiate themselves from other sites by finding new ways to offer speedy delivery. That, in turn, could lead to further innovation and more choices for consumers, they say.
    The last thing that the American people need is a government takeover of the Internet. Net neutrality is likely to cripple competition, restrict innovation, reduce employment and raise costs for all consumers—all of which would only exacerbate the current economic downturn. Unfortunately, the FCC has already endorsed net neutrality and is considering regulations that would affect all Internet users. FreedomWorks, joined several other free market groups in filing comments before the FCC on the potential impacts of the agency's proposed regulations. For further information on the FCC's proposed rules and net neutrality, see: FreedomWorks' "Proposed Regulations Pose Threat to the Internet."