“Regulatory humility.” To many, if not most, Americans, the phrase sounds like an oxymoron. Yet, for the last two decades, this has been the almost uniquely American approach to telecommunications and technology policy.
For more than 20 years, starting with the development of the first papers on Internet policy from the Clinton-Gore Administration, America’s watchwords were “first do no harm.” Adopting a posture of regulatory humility did not mean that government had no role: it still pressed for universal service, an open and secure Internet, protection of intellectual property, and improved use and management of spectrum needed for existing and emerging wireless technologies. The Administration recognized, however, that its job was to “steer, not row,” as the late Commerce Secretary Ron Brown put it.
Consistently, the United States has acted on the belief that policies that promote innovation and long-term investment are key to maintaining and expanding technological capacity and leadership, creating jobs, and improving consumer welfare. The approach has worked. The U.S. private sector has invested more than $1.4 trillion in telecommunications infrastructure since 1996, and private investment in America’s information infrastructure outpaces investment in any other country or region of the world.
Stark contrasts, however, lie beyond our borders. Australia, for example, has taken a more hands-on approach to infrastructure investment. Australia first announced its plans for a “National Broadband Network” (NBN) in 2007. The intention was to create a government-owned business enterprise that would provide broadband Internet across the country, but the NBN became increasingly politicized, faced construction difficulties and brought cost overruns. When a new administration took over after elections in 2013, they radically altered the vision and the financing for the NBN. Now, almost a decade after Australia’s government first led efforts to bring broadband to Australia, the NBN project is still underperforming and Australians still don’t have the world-class broadband network they want and were promised.
Choice of regulatory model has also affected investment in Europe. The Boston Consulting Group, in a report commissioned by the European Telecommunications Operators’ Association, stated that investment in Europe’s telecommunications infrastructure had declined by two percent per year for five years because of outdated and intrusive regulation that distorted competition and discouraged investment.
The European Commission now understands that new emerging technologies, such as the Internet of Things, cloud computing, virtual reality and data analytics, that will determine Europe’s economic and technological competitiveness will require increased investment in broadband networks. Thus, the EU is recasting its regulatory models to encourage that investment. In fact, the Commission recently launched a Digital Single Markets strategy to lay the groundwork for Europe’s digital future. One of the pillars of that initiative is creating the right conditions for digital networks and innovation to flourish. Key to creating that environment is an overhaul of existing telecom rules and the creation of incentives for investment in high-speed broadband.
These examples make what’s happening in the U.S. so perplexing. Earlier this year, the Federal Communications Commission (FCC) put at risk two decades of unparalleled investment in networks and technological growth. The FCC voted to apply Title II regulation – designed for regulation of a monopoly-era telephone regime – to the most vibrant and innovative sector of the U.S. economy. Even more troubling is that the FCC also intends to increase its control over Internet Protocol (IP)-based networks, the networks designed to carry new and innovative applications and services for consumers and businesses.
Title II regulation could stifle investment and deter innovation and, of note, there are options to preserve an open Internet and to spur growth and competition that are less archaic and destructive. Creating regulatory uncertainty as we seek investment in more capacious broadband networks makes little sense.
We have witnessed what happened in Australia over the past decade when government and politics became too involved in the development of a nation’s infrastructure, and we are watching Europe move to reform outdated, Title II-like regulation to accelerate sluggish investment in its broadband networks. The United States, on the other hand, has led the world in Internet innovation over the last 20 years, helping to spur investment with its deliberately chosen regulatory model. Now is not the time to reverse course. With more and more users and endless possibilities for innovation thanks to high-speed IP networks, investment is needed now, more than ever.
“Regulatory humility” and “first do no harm” – sounds like the right recipe for the next 20 years of broadband growth.
Originally published at The Hill