Biden's FCC Internet Policy: A Shift Towards Central Planning
Democrats have controlled the Federal Communications Commission (FCC) and other administrative agencies in Washington for nearly 12 of the past 16 years. During this time, they have had the opportunity to implement any federal telecommunications policy they desired. Despite the allocation of hundreds of billions of taxpayer dollars to bridge the "digital divide," the Biden administration has concluded that these policies are not working. I concur with President Joe Biden on this point: the administration's broadband policies are failing.
The Current State of Broadband Policies
The costs of building internet infrastructure in the country have escalated due to the Biden administration's inflationary policies. The administration lacks a plan to replenish the now-empty spectrum pipeline, which is crucial for America's economy and geopolitical leadership. Meanwhile, the FCC is holding onto spectrum that could connect millions of Americans to new, 5G services. The administration has also unnecessarily blocked and delayed new broadband infrastructure builds due to regulatory red tape.
The Administration's Response
However, the Biden administration seems to be drawing the wrong conclusions from its failed broadband policies. Instead of correcting course, the administration is blaming the private sector and free market capitalism for its own policy shortcomings. Last month, Biden directed the FCC to implement a section of the 2021 Infrastructure Investment and Jobs Act by adopting new rules of extensive scope, all in the name of "digital equity."
The Implications of the New Rules
For the first time, these rules would give the federal government a broad mandate to micromanage almost every aspect of how the internet functions. This includes how internet service providers (ISPs) allocate capital and where they build, the services that consumers can purchase, the profits that ISPs can realize, and how they market and advertise services, among other things.
Resistance to the Plan
I oppose this plan for several reasons. It hands the administrative state effective control of all internet services and infrastructure in the country. Never before in the roughly 40-year history of the public internet has the FCC—or any other federal agency—claimed this degree of control. The plan is motivated by an ideology of government control that is incompatible with the fundamental precepts of free market capitalism.
Unprecedented Regulatory Reach
Biden's plan extends the FCC's jurisdiction to entire industries for the first time in the agency's 90-year history. Landlords, construction crews, marketing agencies, banks, and even the government itself are all newly regulated by the FCC and liable for any act or omission that the agency determines has an impermissible impact on a consumer's access to broadband.
Unfunded Build Mandates and Price Controls
Biden's plan allows the FCC to impose unfunded build mandates on ISPs and unlimited monetary fines on every covered entity. It also includes price controls, with the FCC having the power to regulate broadband pricing and even an ISP's profitability.
In conclusion, the FCC could have adopted rules that lawfully and faithfully implemented Congress' decisions in the Infrastructure Act. The FCC could have taken concrete steps that would have extended high-speed internet services to more Americans. Instead, the FCC opted for an ideological approach.
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Conclusion: The Impact of Broadband Policies on New Businesses in the Telecommunications Sector
The Biden administration's broadband policies, as outlined in the FCC's new rules, could significantly impact new businesses in the telecommunications sector. The implications of these policies are far-reaching, affecting not just internet service providers but also extending to industries never before regulated by the FCC.
Increased Regulatory Control
The proposed plan grants the FCC unprecedented control over the internet sector, potentially stifling innovation and growth. This level of control could deter entrepreneurs from entering the sector and existing businesses from expanding their services.
The potential for unfunded build mandates and unlimited fines presents significant financial risks for businesses. These financial implications could make it more challenging for new businesses to establish themselves and for existing businesses to remain profitable.
The introduction of price controls could further complicate the business landscape. While intended to ensure fair pricing for consumers, these controls could limit businesses' ability to set prices that reflect their costs and desired profit margins.
In conclusion, the Biden administration's broadband policies, if implemented as currently proposed, could significantly impact new businesses in the telecommunications sector. While the aim of achieving "digital equity" is commendable, the means proposed to achieve this goal could have unintended negative consequences for businesses and, ultimately, for consumers.