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President Obama recently weighed in on the Federal Communications Commission's (FCC) net neutrality proceedings, basically endorsing a government takeover of the internet. Given the president's predilections for executive orders, the decision is not surprising. Imposing sweeping new regulations on the internet would continue the expansion of the administrative state that the president favors. But new regulations come at the price of reduced innovation and lower levels of capital investment, which is unfortunate, because neither the administration nor the FCC have yet to make the case that current internet policies have been problematic.
In fact, a look at the internet's development demonstrates just the opposite: limited regulation has fostered the development of one of the most important and disruptive technologies of our time. In spite of-or, more likely, because of-light-handed regulation, the internet has evolved at a pace that is transforming large swathes of the economy. Today, there are 2.5 billion people connected to the internet. By the 2016, the internet is expected to generate $4.2 trillion in economic activity among the G-20 nations.
The president's announcement is the latest skirmish in a long battle over the internet's future, a debate dating back to the Clinton era, when FCC Chairman William Kennard led the effort to ensure the internet was allowed to expand on its own, free of the burdensome regulations that governed telecommunications. But there has always been a tension between regulators and broadband providers, with increasing efforts to place the internet under greater government scrutiny. Under the guise of protecting a free and open internet, proponents of net neutrality rallied to the call for tighter regulations. They have been joined by internet giants such as