Viewpoints: Overegulating the Internet is bad for California

As business leaders and policymakers gather Wednesday in Sacramento to discuss new rules for the Internet, they should remember just how much California has gained from light-touch regulation. Rather than overturning our current regulatory system for one that is far more interfering, policymakers should look at alternatives that preserve the Internet’s dynamism.

In May, Federal Communications Commission Chairman Tom Wheeler first announced regulators were considering a change in the way they would treat the Internet. Since 1996, the Internet has been governed by a restrained regulatory system that encouraged market competition and stimulated innovation. Since, a flood of private investment – more than $1.3 trillion – has helped build up and fortify national Internet networks, allowing 99 percent of all American homes to have access.

Internet providers, in fact, have invested more than any other industry, including equipment-heavy ones like mining and automobiles. This investment is directly responsible for the wealth of technologies that run our lives today.

One current proposal, however, would encourage regulators to tightly manage the Internet. The new rules would subject high-speed Internet to the same regulatory standards as other public utilities such as the electric grid and highways, two networks notorious for funding gaps. These 1930s-era regulations were never designed for the Internet and they have been used in the past to rein in telephone monopolies that bear little resemblance to the online marketplace.

The prospect of such an intrusive regulatory regime has provoked heavy opposition, including from the Urban League. We take this position because the Internet is a civil rights issue; it levels the playing field, giving everyone equal access to education, employment opportunities and public services. The FCC should be focusing on improving adoption and digital literacy, not implementing additional regulatory burdens.

Such rules would inflict particular harm on California, where a thriving tech sector depends on a robust and growing broadband network. Bureaucratic regulations from another time could stifle California’s tech economy.

California’s tech sector also depends heavily on startups, which grow rapidly and unpredictably. By slowing innovation, strict new rules could stifle these companies and the jobs they support. Other tech companies have resisted innovations for fear of landing in regulators’ sights: Google, for example, specifically did not offer phone service on their Google Fiber networks because they were worried about accompanying regulations.

California innovators do not need overly prescriptive regulations imposed on them from across the country. FCC commissioners should find common ground around a proposal first proposed by Chairman Wheeler that prohibits companies from blocking or discriminating against lawful content online, but also allows them to reach mutually beneficial agreements between each other to better serve their shared consumers.