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Should the State Control your Internet?

Written By Geoffrey Pike

Posted July 24, 2014

stateinternetThere isn’t a free market when it comes to the Internet. However, as technology improves, this could all change.

The Republican-led House of Representatives recently attached an amendment to a funding bill that would stop the Federal Communications Commission (FCC) from preventing state prohibitions on city-owned internet service providers.

This is a bit of a complicated issue because we are dealing with so many layers of government. From the standpoint of a liberty advocate, it is best to promote the free market in all areas, including internet service. But if there is going to be government involvement, then decentralization is better than centralization.

The city of Chattanooga in Tennessee provides high-speed fiber optic networks for residents and businesses at a cost of about $70 per month, and it is much faster than the average internet service. But the city is prevented by state law in expanding its services to nearby communities.

Telecommunication companies are against such city-owned operations because they complain that they can’t compete. Unsurprisingly, these companies favor state laws to prohibit city-owned internet providers.

The FCC is trying to intervene in favor of the cities. The Republicans in the U.S. House are trying to stop the FCC from intervening.

When you have this much of a tangled mess, it is hard to figure out the pro-liberty position.

Republican Politics May Be Right Here

I have no idea the motives of the politicians in the U.S. House who support this amendment to prevent the FCC from interfering. My guess is that a lot of them are supporting this amendment because they are supporting big telecommunication companies. My guess is that this is more cronyism than it is principle.

But this also doesn’t make the Republicans and the supporters of this amendment wrong. They might be right for the wrong reasons. From a constitutional standpoint, they are right that the FCC should really not get involved.

The FCC is saying that cities should be able to restrict competition from community broadband if it is being done by elected local officials on behalf of the people.

In other words, the FCC doesn’t think the state should be telling the city what to do. They are advocating decentralization by having a federal agency (itself) tell state governments what they can and can’t do.

This is one of those difficult issues for those in the pro-liberty camp because it is almost a choice between centralization of government and stifling competition.

In regards to providing internet service, it may sound strange that a liberty advocate would be supporting city-owned internet providers. But it isn’t support for government, even at the local level. It is support for decentralization. I would rather have competing models between cities than have one uniform state law that every city must abide by. Likewise, it is better to have various state models than one federal law dictating how 300 million people will live their lives.

The other interesting point about this whole story is that there is not much of a free market anyway with internet providers. It is no more free market to have a city grant a monopoly to one private company as it is for the city to act as the internet provider.

As technology gets better and better, I hope this debate becomes a thing of the past. I hope that internet providers become something like the Post Office is becoming, which is obsolete.

There is politics coming at us from all angles here and let’s hope that technology eventually makes all of this politics obsolete.