Unintended Consequences

Ambassador David Gross, who served for nearly eight years as the senior U.S. government representative responsible for representing the US on global telecommunications issues, is serving up his opinion on the new FCC net neutrality rules. Take a look at some of his comments and for the full piece go to http://tinyurl.com/yf6uklb.

“…In essence, the Commission’s proposed net neutrality rules would result in the US government regulating the Internet (i.e., imposing binding rules on how Internet networks operate) rather than leaving those issues to technical bodies and those providing the infrastructure. It has long been the desire and focus of other governments to play a significant role in how the Internet is structured and how it operates. Those governments include not only China, Russia, Saudi Arabia, etc., but also others such as the European Union and some of its member states. My predecessors during the Clinton Administration and my colleagues in the Bush Administration fought hard and successfully to ensure that the Internet would not be regulated by the UN, by other international organizations, or by other countries.

However, if the US government creates a set of rules and regulations that will govern the relationship among those providing Internet facilities and services to advance US government policies – even for good purposes such as promoting the free flow of information — then there may be virtually no basis for the United States to object to other governments also creating new rules governing the Internet. Presumably this would include not only issues about Internet content, but also about Internet facilities and the economic relationships among Internet service providers.

Of course, with globally tight credit markets and other problems associated with the economic recession — especially in the developing world — changing significantly the rules of the game by imposing new rules is also likely to have a materially adverse impact on telecoms capital formation. This would likely lead to building relatively fewer high speed broadband facilities around the world. At the ITU there was discussion about major changes in regulatory policies creating investment uncertainties and that, other things been similar, such uncertainties decrease investments, especially in difficult political and economic environments. On the other hand, such decreased private sector investments could give a substantial boost to China and other economies where government support is easier to get…”

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