As pundits spin various narratives about the successes and failures of President Trump’s first 100 days, the bold, deregulatory changes taking place at the Federal Communications Commission should not be ignored. A combination of legislative and regulatory actions is moving the telecommunications world in a free-market direction that could lead to big gains for taxpayers and consumers.
The major recent news at the FCC is the regulatory change announced this week by new Chairman Ajit Pai, who Trump selected to lead the agency.
Pai’s new rule will reverse the Obama administration’s ill-advised 2015 net neutrality policy, which effectively treats internet service providers like utility companies. This is a significant change because Obama’s rule has stymied innovation and reduced the deployment of new broadband services. This has obviously been a problem for consumers and internet service providers, but has also had a significant negative impact on the federal budget – a fact that should be extremely concerning for taxpayers.
Take for instance the 2016 spectrum auction that was supposed to bring to the federal treasury anywhere from $25 billion (according to the Congressional Budget Office) to $84.9 billion (according to an industry study). Largely due to the economic impact of the net neutrality rule, the auction yielded only $19.8 billion. Although the effect of this auction on the business landscape (and taxpayers) will continue to be analyzed and debated, it clearly took place in a climate afflicted by over-regulation and provided a good justification for Pai’s actions.
The net neutrality changes come on the heels of last month’s successful effort by Congress and Trump to nullify an onerous, misguided privacy proposal. Had that rule been allowed to take effect, it would have shifted regulatory authority for online privacy from the Federal Trade Commission to the FCC and created an inequitable treatment of internet service providers and content companies. Further, it could have reduced competition and innovation.
Rolling back this regulation was a big win for the free market, which is why Pai applauded it and noted that the privacy rule was “designed to benefit one group of favored companies over another group of disfavored companies.”
There are many changes that will take place at the FCC in coming months. Pai has already established a forward-thinking agenda to modernize telecommunications policy, close the digital divide, and promote a regulatory framework that encourages innovation. Over coming years, taxpayers can expect to see many new rules considered and adopted. But already, the first 100 days of the FCC under Trump’s chairman have created cause for optimism.
Brandon Arnold (@BrandonNTU) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the executive vice president at the National Taxpayers Union.
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