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Press Release

FreedomWorks Opposes New Net Neutrality Regulation

FreedomWorks filed comments urging the Federal Communications Commission (FCC) not to adopt new net neutrality mandates. More than 2,000 members of FreedomWorks also filed comments with the FCC opposing an expansion of internet regulation. In conjunction with the comments, FreedomWorks released a new study authored by Chief Economist Wayne Brough and Adjunct Fellow Arthur Fleisher, who is also a professor at Metropolitan State College of Denver.

As new technologies emerge and broadband expands to an even greater population, the internet is showing its age. Streaming video is replacing the static web page, and real quality of service (QoS) issues are developing. Net neutrality mandates effectively freeze the internet’s development at a stage that may be inappropriate for future use patterns. In an age of BitTorrent and IPTV, it is not surprising that new tools for network management may be required.

“In today’s market, it is the new capabilities of high-speed broadband, including faster internet connections, video programming, and internet telephony, that are driving deployment. Providers are competing in terms of both speed and service, seeking to offer consumers a unique and enjoyable online experience,” said Wayne Brough.

“Mandates that reduce the network to a commoditized service limit the margins for competition, reducing incentives to invest in critical infrastructure. Consequently, net neutrality requirements could generate greater concerns over market power than exists in today’s internet.”

Mandates to keep the net neutral all lock in some idealized notion of the internet that would mark a significant expansion of the FCC’s regulatory authority. Although the internet, up to this point, has evolved largely in a market-based setting, the new mandates pose a potential threat to all businesses using the internet, particularly with respect to broadband deployment and upgrading the internet to handle new data-intensive applications.

Professor Fleisher noted, “This would mark a significant expansion in the FCC’s oversight of the internet, despite the lack of evidence that problems currently exist. Competition is brisk, prices are declining, and quality is significantly improving—hardly the signs of a non-competitive market.”

The study notes that issues of market power and the ability to leverage that power into different layers of the internet are not unique to broadband providers. As such, existing antitrust laws are more general and far better suited for addressing any situations that may arise rather than proposing new ex ante regulatory oversight.