FCC Out-Europes Europe on Net Neutrality -- Why?

"The Net Neutrality Debate in Europe is Over" per an excellent commentary by Ben Rooney in WSJ TechEurope.

  • Mr. Rooney chronicles the evolving public position of EU Digital Commissioner Neelie Kroes from an original pro net neutrality regulation mindset, to now the opposite -- a more pro-competition mindset where "the commissoner's position now [is] that a competitive market should be able to deliver an Internet to which everyone has access."

For those who follow history, it is truly ironic, surprising, and just plain bizarre that Europe is more pro-competition on Internet policy than the U.S. FCC.

How can this be? To understand this wierdness, look at this remarkable development through the lens of industrial policy.

I posit the reason for this European policy outcome is the fact that Europe does not have a Silicon Valley lobby -- with an aggressive corporate welfare agenda seeking government special treatment, regulation of their competitors, and implicit bandwidth subsidies -- like the U.S. does. 

The stark and ironic contrast between the FCC's European-style, interventionist, regulatory approach, and Europe's more American, non-interventionist, competitive approach can only be explained by the presence of the potent lobbying force of U.S. industrial policy national champions (Silicon Valley -- Google, eBay, Amazon, IAC) in the U.S. -- and the absence of European national champions seeking net neutrality in Europe.

Simply the U.S. FCC Open Internet order is all about picking Silicon Valley as market winners and broadband and paid content as market losers, whereas in Europe there is no European parochial interest in picking U.S. companies -- with unsurpassable leads in their markets -- as market winners in Europe, and European broadband and paid content as market losers in Europe.

The ominous warning sign and lesson here for Silicon Valley is that the more successful they are at feeding at the U.S. industrial policy trough of the FCC and tilting the playing field in their favor via U.S. government regulation, the less hospitable the Silicon Valley U.S. national champions will find Europe. 

  • Whereas the FCC may have a political interest in policy redistributionism to take economic growth potential and opportunity from traditional communications sectors (i.e. telecom, cable, DBS, wireless, broadcasting, and newspapers) and redistribute economic growth potential and opportunity to the uber-politically-connected California Silicon Valley Internet sector -- there is no comparable interest in Europe to redistribute European economic growth and opportunity to U.S. Internet monopolies like Google and eBay, at the expense of European based businesses.

In sum, given the fact that the Europeans did not back net neutrality regulation, and given the fact that the American people also did not back net neutrality regulation (candidates formally supporting net neutrality in the U.S. midterms went 0-95 in the election), the only political force to explain why the FCC passed such controversial net neutrality regulation is the lobbying and uber-political-influence of California's Silicon Valley Internet industrial complex.