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Ugh Internet regulation creep -- FTC:word-of-mouth marketing must be disclosed

Ugh. Internet regulation creep continues. The Federal Trade Commission (FTC) said yesterday that companies that engage in word-of-mouth product endorsements must disclose if recommenders are being paid to recommend the product or service. The Washington Post had a good story on it today.

Since this is all about forthright disclosure, let me reiterate that I openly and regularly disclose that I represent broadband interests in the net neutrality debate. And as a strong believer in law enforcement, I have no sympathy for those engaging in deceptive or fraudulent business practices.  That said, I also dread Internet regulation creep, because it will ultimately slow economic growth, job creation and innovation. 

What I hope is that the FTC continues to have the wisdom and discipline to focus on enforcement and not overreaching prophylactic regulation. In this regard the FTC has had a better record of active enforcement and regulatory restraint than other regulators like the SEC. The SEC in implementing Sarbanes Oxley, expediently decided to cage all the innocent because they failed in the past at catching the guilty. They chose the easy and convenient path for the SEC not what was best for the country.

I worry that ItsOurNet's call for net neutrality regulation of broadband BEFORE any evidence of a problem exists, is pushing a regulate-first, ask-questions-later philosophy. It takes discipline and common sense for regulators to draw the right balance between enforcement and regulation. The fearmongering, unsubstantiated allegations, and political histrionics of net neutrality proponents, make it much harder for regulators to excercise discipline and common sense.

ItsOurNet is unwisely calling for a preemptive policy of Internet regulation of their competitors and naively thinking that increased regulation will not creep into their business. It will.

Do Google, Microsoft, Yahoo, eBay, and Amazon really want to have preemptive regulation presuming they are guilty until proven innocent of click fraud, privacy violations or theft of intellectual property? I am reasonably certain that these companies do not want the FTC or FCC deciding what type of business models and business practices it believes most encourage click fraud, violations of data privacy, or theft of intellectual property, in advance of a problem and then preemptively regulating those potential problems.

Do the Washington advisors of ItsOurNet companies truly believe they can win net neutrality regulation with such surgical precision that they can severely limit their adjacent competitors' business freedoms, and have their businesses emerge perfectly unscathed?

  • Any experienced Washington hand knows that implementing regulation in a political environment is a very blunt and unpredictable instrument.
  • Most people being operated on would not want their doctors fighting over which one will operate surgically with a baseball bat -- it would be bad for the patient and bad for medicine in general.

I continue to be amazed with how naive and cavalier ItsOurNet is with shareholders' money and business. Do they really believe that a more regulated techcom sector will grow as fast, be as profitable or enjoy as high valuation multiples? Hello is there over there thinking clearly?