House Subcommittee Explores Impact of FCC’s Open Internet Rules

The House Communications and Technology Subcommittee, chaired by Rep Greg Walden (R-OR), discussed the impact of the Federal Communications Commission’s implementation of Open Internet rules on consumers, jobs, and investment.

“In the end consumers and the American people are the ones who will ultimately bear the greatest loss from these rules. Whether it’s because the increased burden drives small providers out of the market, or because there is less incentive for any company to invest in new and innovative service offerings, or because additional infrastructure investment is no longer as attractive to industry and investors, Title II regulations don’t inspire innovation or investment confidence,” said Chairman Walden. “In the long term, it means uncertainty, reduced investment, and a future of “what might have been” for our vibrant and thriving Internet ecosystem. We can do better.”

“We need certainty, so companies can continue to plan their business models for the years ahead. We need investment, so consumers can continue to receive the high-quality, innovative broadband services we have come to rely on in our everyday lives. We need a return to the light-touch regulatory world that has served the industry and consumers so well over the years,” added Full Committee Chairman Fred Upton (R-MI).

Rep. Anna Eshoo (D-CA), ranking member of the subcommittee, says doomsday financial scenarios tied to the FCC's reclassification of Internet access under Title II common carrier regulations have not materialized. Rep. Anna Eshoo said many of the doomsday predictions point to uncertainty in the marketplace. But she said much of that uncertainty has come from companies themselves suing over the new rules. "It's the ISPs that went to court that created the uncertainty," she said.

New York University professor Nicholas Economides said that the economic impact of the entire Internet marketplace, and not just Internet service providers, should be taken into account. Echoing analysis from the FCC, he noted that even if broadband investment declines because of the rules, different areas would see increases because of new protections.

Countering that was witness Robert Shapiro, chairman of Sonecon LLC and former undersecretary of commerce in the Clinton Administration. He said that those innovations at the edge are based on bandwidth, and all depended on the infrastructure investment that produces it. All that innovation only comes after the infrastructure because it isn't possible without it.

Michael Mandel, chief economic strategist at the Progressive Policy Institute, pointed out that ISPs have been some of the biggest investors in the U.S. under light-touch regulation, and feared that the new, tighter regulations, "in the interest of protecting consumers [may] have the perverse effect of reducing investment and increasing consumer costs."