Against the Obamanet by Brian C. Anderson

Author:Brian C. Anderson [Anderson, Brian C.]
Language: eng
Format: epub
Tags: Public Policy, Political Science, Science & Technology Policy
ISBN: 9781594038501
Google: P36DCgAAQBAJ
Goodreads: 34081719
Publisher: Encounter Books
Published: 2015-07-21T00:00:00+00:00

A LESSON FROM HISTORY

As Washington Post columnist Robert Samuelson argues, the history of America’s railroads highlights the danger to innovation posed by the FCC’s heavy hand. Congress created the Interstate Commerce Commission (ICC) in 1887 to ensure that the rates charged by railroads weren’t discriminatory, just as the FCC intends to do with the Internet. As it turned out, Samuelson writes, “the railroads needed ICC approval for almost everything: rates, mergers, abandonments of little-used branch lines.” Shippers ferociously resisted any changes that would add to their costs. Confronted with competition from trucks and barges, the railroads couldn’t adapt, and they hemorrhaged money. The giant Penn Central railroad, which served the Northeast, went bust in 1970.

In 1980, President Jimmy Carter signed into law the Staggers Rail Act, deregulating the railroads. Writes Samuelson:

The ensuing deregulation succeeded brilliantly…. Costs and freight rates both declined. Railroads shed unprofitable lines and offered pricing packages that rewarded shippers for moving more freight in bulk. Mergers consolidated railroads into four major companies. Profits rose. The industry brags that it has spent $575 billion since 1980 to improve the rail network.

Utility regulation is no friend to innovation, as the railroad story shows – and as the stories of Ma Bell, power companies, and other public utilities show as well. Transforming the most explosive, fast-moving, and investment-attracting sector of the economy into something that resembles the local water company will have a similar effect.

Reclassifying the Internet as a utility may also mean new tolls for Internet users. Title II lets states and localities place fees on ISPs, just as they do on telecoms, and economists Robert Litan and Hal Singer believe those will get passed on to consumers. Internet bills, they think, “could soon have new random charges tacked on at the end, much like consumers see on their phone bills today.” Estimates vary on exactly how much more we’ll be paying, but Litan and Singer predict that the tab will easily add up to billions of dollars yearly.

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