Aspects of FCC's plan for broadband could have serious consequences for our recovering economy

This op-ed appeared April 6, 2010, on The Hill.

With our nation’s unemployment rate stuck stubbornly near the double-digit mark, policymakers nationwide continue to look for ways to spur economic growth in the private sector – preferably without deepening the federal deficit. One area where federal and state officials agree is that of expanding broadband Internet to underserved and unserved areas, which was a large part of the National Broadband Plan presented by the Federal Communications Commission to Congress on March 16th. It is widely understood that boosting the nation’s broadband infrastructure would bring untold economic and social benefits.

The Plan acts as a blueprint for the general direction the federal government will take in aiding future broadband expansion efforts from both the private and public sectors.

The economic and social importance of the Internet and expanding broadband over the last decade reaches into the trillions of dollars. Therefore the FCC must tread carefully or risk curtailing an industry that has transformed not only American society, but the entire global marketplace.

FCC Chairman Julius Genachowski recently assessed correctly the overwhelming potential of broadband when he said that, “global leadership in high-speed Internet [will] create jobs and economic growth to unleash new waves of innovation and investment and will improve education, health care, energy efficiency, public safety and [improve] the vibrancy of our economy.”

But the devil is in the details. Parts of the National Broadband Plan hint of significant new regulations to be imposed on Internet Service Providers (ISP). Last fall the FCC launched a notice of proposed rulemaking (NPRM), a spin off to the National Broadband Plan, to look at new “Open Internet” regulations known as “Net Neutrality” rules.

New regulations, like Net Neutrality, would remove the ability of ISPs to effectively manage their network – something they have already been doing since the advent of the World Wide Web. It is also important to note the rapid spread of the Internet has happened under the current regulatory environment. So why is the FCC considering new regulations that would “fix” something that is not actually broken?

The danger isn’t whether innovation and ingenuity will continue to spring forth from millions of global technology entrepreneurs but rather, will innovation continue to flourish if the FCC’s Open Internet proceedings result in regulations that place control of this technical marvel in the hands of bureaucrats and politicians? If so, this would have an obvious adverse effect on our nation’s entrepreneurs, small businesses and curtail future job growth.

Chairman Genachowski also stated that, “Broadband allows small business to think big and grow big. With a high-speed Internet connection and the emergence of cloud computing, every small business can have access to a world-class IT system and a national, indeed, global marketplace.”

It is therefore imperative that the FCC focus on ensuring that we have a system that encourages entrepreneurship, risk-taking and innovation. The economic benefits are clear. Connected Nation estimates $134 billion in direct economic benefits with increased broadband adoption nationwide.

Likewise, a recent study by MIT and Brookings Institute researchers found that a one-digit increase in broadband penetration creates an additional 300,000 jobs.

Increased government regulation, particularly in the fast-moving field of high-tech and broadband communications will erode the investment demand that is required to keep up with America’s insatiable thirst for Internet connectivity. In 2009 cable companies alone spent $14.4 billion in infrastructure expansion and wireless companies spent twice that in capital improvements. New capital and infrastructure spending would mean jobs for hundreds of thousands of Americans.

As the FCC and Congress discuss the proposals in the National Broadband Plan, they must recognize both the potential benefit and danger that the plan could have on an industry that has seen exponential growth over the last decade and is poised to see even more in the coming years.

The proper role of the FCC should be to focus on providing a regulatory environment that will encourage entrepreneurs and innovators to chase after myriad investment opportunities provided by risk-taking investors, who see broadband Internet and ubiquitous connectivity as a potent field for growth and profit. The jobs will come from the businesses that are not held back by excessive government regulation and bureaucracy.