In 2015, at the behest of the Obama administration and progressives everywhere, FCC Chairman Tom Wheeler and his allies on the commission handcuffed internet companies with monopoly style regulation. One might be wondering by now if the regulations have “helped,” at all. The reality is, the same companies that have built the foundations of the greatest technological advancement in recent history are sick and tired of the new rules. Worse yet, it appears the telecoms who would normally be powering the expansion of the internet, are pulling back on their commitment to broadband. That’s not a good sign for the future. The Wall Street Journal writes:
The U.S. economy continues to create jobs, but there’s a big exception. Companies making computer and electronic products and in the telecommunications side of the information industry employed 29,000 fewer workers in August than they did a year earlier.
These disappointing results follow a recent update from economist Hal Singer, who has tracked broadband investment since Mr. Wheeler’s FCC imposed monopoly telephone rules from the 1930s on the competitive internet. Mr. Wheeler’s acolytes on the nonprofit left pretend that the rules haven’t harmed investment in high-speed networks. They do this by counting spending by the owners of broadband networks on things other than their broadband networks—such as television shows.
Mr. Singer specifically looks at capital expenditures on network infrastructure. He finds that, after an era of growth, the 12 largest U.S. internet service providers reduced investment by 8% in the first six months of this year compared to the same period in 2014, the last year before the new regulatory regime. This is what has become known in the industry as the “Wheeler tax.”
Couldn’t FCC economists have easily predicted that highly complex and burdensome rules would discourage investment? Probably, which may be why Mr. Wheeler wasn’t interested in their opinions. His “Open Internet” rules, hastily crafted to comply with a public command from President Obama to the supposedly independent agency, were never subjected to a formal cost-benefit analysis.
The commission’s chief economist in 2014, Tim Brennan, declared after leaving the FCC that the rules were an “economics-free zone.” Mr. Brennan has since called his comment “part of an off-hand joke” and said that while the rule did include some economics, “a fair amount of the economics was wrong, unsupported, or irrelevant.”
Internet broadband networks have since become a growth-free zone for investment and jobs. If this jewel of American technology and opportunity now becomes an innovation-free zone, consumers, investors and workers will have every right to blame Mr. Wheeler.
FCC’s Ajit Pai: Net Neutrality is a “Solution That Won’t Work to a Problem That Doesn’t Exist”
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