Free the Web -- From the FCC!

By L. Gordon Crovitz
Monday, August 4, 2008

There are a few holy articles among the Web faithful: The Internet is the most liberating force in generations, freeing people to use and share information however they like; the digital world has grown through innovation and risk-taking by entrepreneurs and companies; and government's role is to get out of the way and stay out.

We have happily sung from this hymnal for years, but the gospel is breaking down on the issue of government involvement. Many Internet activists now want the federal government to regulate the Web. They do so in the hope of maintaining the open Web. But they should be careful what they wish for, lest they instead get micromanagement, tariffs and a Web clogged by politics.

They applaud the U.S. Federal Communications Commission's announcement on Friday that it will replace market solutions with regulatory review. The case involved Comcast's effort to deal with the problem of resource allocation on the Web -- which is that at peak times, 5% of Internet users use 90% of the available bandwidth.

Last year, Comcast tweaked its network-management system to delay slightly the uploading of data through BitTorrent, one of the peer-to-peer services people use to swap movies, music and other large-bandwidth content. Comcast didn't discriminate against BitTorrent based on the content or, it says, to compete, arguing that it acted under its terms of usage so that consumers overall had the best experience. (Think of how controlling traffic with red lights gets to the ultimate destination faster.) Comcast and BitTorrent agreed in March that Comcast would find other techniques to manage its network. The companies issued a news release saying "these technical issues can be worked out through private business discussions without the need for government intervention." The FCC didn't take the hint.

The real problem is how to maintain the Web as a free and open commons, available for all to use in reasonable ways. An article in Britain's Guardian newspaper put it well: "The family gathers for tea, and there are four cream cakes for four people. If one person grabbed three of them, words would be said. However, peer-to-peer sharers think it's perfectly OK to grab three quarters of the communal internet bandwidth."

Instead of offering ways to keep the Web unclogged, the FCC decided that from now on it must approve how Internet service providers manage the fast-changing demands on bandwidth. The rationale suggests that the FCC now thinks of the Web as a "common carrier," the phrase earlier generations of regulators used to justify government management of industries.

Some history on this kind of regulation: In 1887, Congress decided that the new carriers of that era -- railroads -- could not be trusted to handle the traffic on their networks. It passed the Act to Regulate Commerce, which declared, "It shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever."

This sounds like how the FCC now wants to deal with the Web as a carrier of data. This 19th-century law led to the creation of the Interstate Commerce Commission, which micromanaged railroads and trucking for decades. Its regulations proved untenable, for example barring carriers from treating different kinds of freight differently. The ICC became a symbol of regulatory excess, crimping innovation and harming consumers. The agency was abolished in 1995 with bipartisan enthusiasm.

Today's call for government regulation is under the well-intentioned cry of "net neutrality," not the more accurate, "Let's regulate the Web the way they regulated railroads." If setting reasonable tariffs for railroad freight was overreaching, imagine regulators trying to set reasonable practices or prices for different packets of online data. Do we really want an FCC as modern-day ICC deciding how many YouTube video downloads are reasonable?

Internet service is a competitive business, though cable and telecommunication companies do themselves no favors by occasionally acting like duopolists, and they should disclose their network practices. The key matter of social policy is that the Web needs more investment to keep capacity growing faster than Web developers find ways to use it. This is harder as large-bandwidth movies and music migrate online. It will be harder still if potential investors conclude that pricing and network management will be regulated by anything other than supply and demand.

Government's role on the Web is to ensure more competition and more consumer choice, not less competition and diminished consumer choice by turning the Web into a regulated industry. The Internet has become one of the most powerful innovations of our time, in part because it hasn't been burdened by government intervention. Those of us who want to keep the Web free should remember that the best way to keep an industry free is simply to keep it free.