Legislation currently before Congress contains language that could stifle and inhibit innovation by regulating the Internet, resulting in a one-size-fits-all solution that fails to meet consumer and business needs, a group of economists and analysts said yesterday in a letter to the chairman and ranking members of the U.S. House Committee on Energy and Commerce.

The experts warned lawmakers that by codifying the Federal Communications Commission’s Net Neutrality Principles, the legislation would discourage companies from making the large investments needed to offer next generation networks and services.

The legislation dictating net neutrality would “add to the regulatory uncertainty surrounding new Internet services,” and “it could lead to a de facto regulatory regime that would prohibit pro-consumer business practices and distort development of the market,” they wrote.

They cautioned against the need to regulate the Internet, writing “we do not believe that communications carriers or other market participants have the market power required to engage profitably in practices that would harm consumer welfare.”

Signers of the letter include Sonia Arrison, director of Technology Studies at Pacific Research Institute; Wayne Brough, chief economist, FreedomWorks; Jeffrey A. Eisenach, chairman, CapAnalysis LLC; Hance Haney, senior fellow and director of the Technology & Democracy Project, Discovery Institute; Thomas Hazlett, professor of law and economics, George Mason University Law School; Thomas M. Lenard, senior fellow and vice president for research, The Progress & Freedom Foundation; and John Rutledge, chairman, Rutledge Capital.

Among the group’s concerns is that “by writing into law the vague and untested language of the FCC’s August 2005 policy statement, the legislation would almost by definition increase regulatory uncertainty.” They point out that phrases like “operated in a neutral manner” are not well defined in law or regulation today and are open to broad interpretation. “The process by which such phrases would be defined would be adversarial and litigious,” they wrote.

In addition, the regulation could deter product differentiation, resulting in “limiting or even destroying competition. Homogeneity imposed by regulation, in other words, could lead us back to monopoly.”

The legislation was passed through the Energy and Commerce Committee and will be voted on by the full House as early as next week.

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BIOS, May 12, 06 | Print | Send | Comments (0) | Posted In Internet