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The FCC Is Toothless and Feckless

Written by Gary North on February 27, 2015

The Federal Communications Commission is yesterday’s regulatory system. It is bureaucratic. It is slow. Think of it as a dial-up modem.

Any time that you read that the FCC is about to take over the Internet, keep things in perspective. Click this:

Alternatively, think of the FCC as the Post Office.

It can announce new rules. These rules will apply in the United States.

There are 196 nations. The FCC has zero authority in 195 of them. Each nation has different rules. Anyone can set up a website in most of them. Anyone can select the best legal location for his website. You can’t set up in North Korea. Cuba is off limits, but not for long. But if anyone wants to set up a website, he can find a server somewhere.

There are no significant international regulations.

Web search engines can find any site, anywhere. These days, they have indexed over 4.5 billion pages. The FCC will be able to control almost none of them. The number of pages will rise.

To enforce its rules, the FCC must prosecute a violator in an American court. How many cases can its staff prosecute? How many convictions can it get? How many precedents will survive? Not many.

Think of the FCC as the Securities and Exchange Commission. Think of every website or blog editor as a potential Bernie Madoff. How likely is it that the FCC will be able to enforce its rules?

The FCC is trying to control pricing. It is setting up a system of price controls. When you hear the words “internet neutrality,” think “price controls.” But prices keep falling. Here is a technological law that has yet to be broken: “Bandwidth gets cheaper.”

Here is a universal economic law: “When the price falls, more is demanded.”

Think of the Internet as a game of digital whack-a-mole. The FCC is the sucker who keeps trying to whack the mole. “You almost got it that time, Buddy. You want to try again?” He keeps trying again.

It takes an estimated 100,000 employees in China to regulate the Internet. But Chinese citizens can still gain access to forbidden sites. The United States is not China. The FCC is not in a position to hire 100,000 bureaucrats.

The genie is long out of the bottle. Netscape’s browser arrived in 1995. That opened the World Wide Web to the general public. Two decades of innovation followed. The FCC is now trying for the third time to gain control over the Web. Americans have a phrase for this: “A day late, and a dollar short.”

The Internet has stayed ahead of all regulators. It will continue to do so.

The best and the brightest are developing new programs, new solutions. They are doing this all over the world. The tenured and the tired are planning to regulate this process from Washington. Some kid in India comes up with a new technology. What is the FCC going to do about it? Pass a new rule? Some kid in China will have a work-around a month later.

Yes, things could be a little freer at the margin. This is always true. But in the overall sweep of Internet transformation, the FCC is a flea on an elephant’s back. Nothing fundamental is going to change.

Stop worrying. The FCC is a digital paper tiger. It can make things less efficient. It can increase marginal costs. But all talk about “the end of Internet freedom” is left over from the era of television’s three-network oligopoly. That was back when the FCC had teeth. It is Walter Cronkite-era rhetoric. It is gone with the wind.

I get tired of this: “Woe is us!” I get tired of this: “The federal government is unstoppable.” The federal government is a bunch of tenured bureaucrats who just want to keep their jobs until they retire, and who don’t want to suffer a humiliating defeat in public by suing some large outfit with expensive lawyers on its payroll.

The information gatekeepers are finished. They stand at the gate, telling us that we must meet their standards to get through. Meanwhile, the walls are down.

The essence of bureaucracy is this combination: lack of innovation, lack of courage, lack of vision, lack of long-term planning, and lack of collective IQ.

Government is dumb.

Arthur Godfrey described today’s FCC back in 1951. (Warning: this is racially insensitive.)

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