McDowell Warns Against Regulation of Broadband as Telecommunications Service

WASHINGTON, January 29, 2010 – In his keynote address to the Free State Foundation on Friday, Federal Communications Commissioner Robert McDowell said that the agency’s number one goal in the national broadband plan should be to do no harm.

He was concerned, he said, that the agency was considering classifying providers of broadband infrastructure as a common carrier under Title II of the Telecommunications Act.

Re-regulating internet services in such a manner might lead to a parade of horribles, McDowell said – as well as vexing nuts-and-bolts questions since the deregulatory push of the past decade remade the structure of much of telecommunications law.

According to McDowell, the main goal of the National Broadband Plan should be to encourage innovation and competition. He cited numerous examples of wireless broadband in smart phone applications to make daily life more convenient for Americans, and to literally provide a lifeline for victims of the earthquake in Haiti.

McDowell said that America’s wireless broadband market is an illustration of how well policies that encourage competition over regulation work for consumers.

To encourage innovation, the national broadband plan should take a flexible and hands-off approach, he said, rather than proposing heavy-handed industrial policy. Such a governmentally-directed plan should not foreclose positive and constructive developments that are not known  today.

In addition to the national broadband plan, McDowell addressed the net neutrality, or open internet, proceeding. He said one couldn’t discuss broadband competition without also discussing net neutrality.

Both the Commerce Department’s National Telecommunications and Information Administration and the Justice Department’s antitrust division have made comments in the proceeding encouraging the FCC to be cautious in enacting regulation, and to avoid stifling infrastructure investments needed to expand broadband access.

Discussing telecom regulation, McDowell said that a new regulatory framework would impact the economics of the Internet.

Broadband adoption would increase through affordable pricing, McDowell said. Private sector investments in broadband infrastructure should be encouraged.

The most common of current pricing methods is flat-rate pricing.  McDowell said he was  wary of nondiscriminatory pricing models. If every consumer were treated the same regardless of usage, then all prices must rise to compensate for the costs imposed by heavy users.

This possible result would undermine efforts to promote affordable broadband for all Americans, he said.