Opening the Internet — with an Axe

Fernando Herrera-Gonzalez has published a great opinion, from the austrian economics and libertarian points of view on the Mises.org web site about the new regulations of the Internet proposed by the FCC.

The whole post is very much worth reading. I'm pasting here the conclusion:

The FCC's policy goal of guaranteeing the openness of the Internet as an engine for innovation and growth might seem appealing.

However, the Internet has played the role of "economic engine" up to this moment without the need of any intervention. The threats depicted by Mr. Genachowski are just not credible. Telecom companies have no incentives to block contents or services, because their business model would suffer even in the face of a possible cannibalization of revenues.

On the contrary, it is the proposed measures that are a serious threat to the Internet. The granting of these legislated rights will only have negative effects for their recipients: If the users demand those rights and they are ready to pay the costs, then there is no need of intervention. If the users do not demand them, then the enforcement of these legally defined rights will lead to the bankruptcy of the operator and thus a lack of service.

Moreover, the obligations of nondiscrimination and transparency will have negative effects on innovation, investment, and prosperity, instead of the positive effects that may be expected from the openness of the Internet.

This is what will happen if the government mandates the openness of the Internet by means of regulatory obligations. If we try to open the Internet with an axe, it is very likely that we will end up destroying it — and investment, innovation, and prosperity with it.