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Friday, August 5, 2005

Bravo on Broadband
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The FCC's anticipated action of classifying DSL an "information service" is a policy, and political, triumph. In the theme of our Aspen Summit, the information service classification for broadband displays a preference for property rights over the more commons-oriented "telecommunications service" category. For this, the Chairman deserves congratulations, not just for the regulatory parity it will achieve, but the Schumpeterian incentives it creates.

It is peculiarly foreign to the regulatory mindset that you only invest in those things where you believe you will be able to earn back and keep th profits from that investment. In capitalist parlance, we call that a property right. This Order acknowledges that.

The Chairman is also to be commended for pulling this off unanimously, since Commissioner Copps in particular has not shown himself to be very congenial toward property rights. To his credit, Copps is an honest, open, notorious progressive -- but regulatory self-abnegation such as this order is not his usual forte. That Chairman Martin gained his vote is a testament to his previously-lauded political and persuasive skill.

My only latent concern with this action concerns the persistence of these regulatorily-murky "net neutrality" guidelines. At first glance, these principles are little different than Chairman Powell's 'net freedoms'. They are not quite regulations, but threaten to become so. At PFF, we individually have a number of problems with 'net neutrality' regulation. From Adam Thierer's concerns about the inhibitiion on price differentiation, to my public choice concerns and distaste for "regulation by jawboning," to Randy May and Kyle Dixon's concerns as well, we find 'net neutrality' to be premature, at best, and harmful rentseeking, at worst. That the FCC keeps holding out the possibility of such regulation is worrisome, but probably not unexpected under the circumstances.

posted by Ray Gifford @ 2:15 PM | Broadband

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