The FCC's Dangerous Road

10:45 AM -- The Federal Communications Commission (FCC) recently led discussions on proposed net neutrality rules, covering, but not limited to, new definitions of broadband speeds. This comes at the same time the Commission is working on a broader plan to bring broadband to areas of the country unserved and underserved by high-speed connections. (See 100-Meg Price Tag: $350B, MSOs Ask for $442M to Fund BB Stimulus Proposals, and Recovery Act: Round One Brings 'Nearly $28B' in Bids.)

This is yet another dangerous road the FCC is attempting to navigate from a top-down regulatory standpoint, and could simply derail the original intent to stimulate broadband-related investments.

Here are the perilous implications:

  • Mandating ISP speeds on the front end of legislation could impede private investment from taking on the challenges of serving sparsely populated or lower demographic areas.

  • Creating an open and share-all approach for content access will again scare off potential investors, which will be dubious about reaching respectable returns on their money.

  • The burgeoning Internet advertising market will be hampered, or even stopped, from investing in the very sector the FCC is attempting to help grow.

These are the important net neutrality issues that need to be addressed while proposing to regulate an industry on the verge of creating the broadband-based applications and services that consumers want. My message to the FCC is: Do not blow the very opportunity to let private investment create the infrastructure, content, and applications you have urged them to create, by over-regulating those companies into inaction.

It continues to be evident that the best incentive would be to take a hands-off approach to regulation while enabling the capital for ISPs to build out their infrastructures. What scares Wall Street more than anything is the prospect of heavy regulation that will stifle investment opportunities. This has a negative effect on company stocks, shareholders, and the willingness of private investment to flourish and, in essence, get the job done.

The FCC should be promoting a healthy investment and competition environment rather than a heavy-handed regulatory approach for the future of Internet access. This would create the win-win situation the government agency is looking for, whether it realizes the implications or not.

— Leonard Grace, a cable industry vet, is a telecom strategist and blogger. He can be reached at [email protected]. Special to Cable Digital News

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