03/03/2011 01:37 pm ET Updated Dec 06, 2017

Corporate Welfare for the Few Drives Net Neutrality Opposition

The Open Internet has won a temporary reprieve. On Wednesday morning (March 2), a subcommittee in the House of Representatives was supposed to open Phase 2 of the Republican War On The Internet. The first attack, two weeks ago, was to use the mechanism of a resolution to continue funding the government as a vehicle to deny money to the Federal Communications Commission. Now, in Phase 2, it's a Resolution of Disapproval aimed at the underwhelming Net Neutrality rules the FCC approved in December. The resolution would nullify the rules.

Instead, the vote has been pushed off for a couple of weeks. Bowing to a request from Committee Democrats, the Republicans scheduled a hearing on the FCC rules for next Wed., March 9, which will give Net Neutrality proponents precious little time to come up with a good witness. The vote will follow soon after.

No worries, though. In the never-never land of the House, where reality seldom intrudes, the legislators will get around to passing legislation to prohibit the FCC from constructing a Net Neutrality rule. Rep. Marsha Blackburn (R-TN), one of the leading lights opposing a free, open and job-creating Internet, doesn't like the government interfering because there has been no "market failure," as if a situation would ever be recognized as such. So Congress must act.

But it's not enough to roll back an FCC regulation that exists. The House also has to act to foreclose a Commission regulation that doesn't exist, much less any "market failure." House Speaker John Boehner (R-Ohio), who has said there would be no compromise on killing Net Neutrality, has another legislative item in his FCC file: prohibiting the Commission from bringing back the Fairness Doctrine. If anything, that goal is, to use the familiar phrase, "a solution in search of a problem." No one has even hinted at bringing back the old Fairness Doctrine, which was honored mostly in the breach even before it was killed off in 1987.

Net Neutrality and the Fairness Doctrine are polar opposites. One says Internet service providers shall not interfere with content and access. The other is an affirmative obligation on broadcaster to produce content to even up the discussions of issues. No matter. It's also worth noting, for historical purposes, that there's something about the FCC that just seems to get Republican legislators all riled up. One of the first items on the new Republican House's agenda was to get rid of an FCC mechanism that was supposed to help minorities purchase broadcast outlets.

Corporate Welfare Front and Center

The Republican agenda, whether carried out in Washington, D.C., or in Madison, Wisconsin, has nothing to do with market failures and everything to do with simple, good old-fashioned corporate welfare -- but only for the right corporations, of course.

The current campaign against Net Neutrality is but one piece of that corporate-welfare campaign. The Environmental Protection Agency (EPA) is under attack for working for clean air, with big utilities the primary beneficiary. Oil companies, with their record profits, are being protected from having to pay their fair share of taxes. The new consumer protection bureau is being attacked, with big banks the beneficiaries of a weakened agency.

In Washington, the House GOP leadership is so hopped up about stopping a free and open Internet that they called in the big telecom companies in for a little spanking because said companies weren't sufficiently aggressive in helping the politicians with their crusade. Oddly, Verizon reportedly escaped criticism, even though they were the ones who negotiated last summer with Google (the enemy!) on a framework. Verizon got make-up points for challenging the rules in court.

The fight against Net Neutrality has nothing to do with "market failure" or "government control of the Internet," or any of the other lame catch-phrases that opponents use. It is, instead, a simple policy of turning what had been a free and open Internet environment over to AT&T, Verizon, Comcast and the rest of the Internet access providers to do with as they wish, and can get away with.

Never mind that most other companies would suffer in a regime like this, and it's not simply the big companies who do business online like Amazon, Google or eBay. Those others don't have the DC clout that the big telecoms do. Small businesses are excluded entirely from the discussion, and could suffer the most. Consider the case of Joseph Olesh, a filmmaker who won the America's Got Net video contest with a simple explanation of how an open Internet helps him.

Now Playing Out In Madison

While most of the attention in Madison has been devoted to the fight with the unions, the corporate-welfare meme is strong also. Gov. Scott Walker (R) also made headlines when he turned back a $23 million broadband stimulus grant, blaming government red tape and putting out the story that the state would have to give the money back if the precise requirements of the grant weren't met and implying the government didn't like private companies owning the network.

The back story is somewhat more complicated. Of course in other states, companies own the networks. That's not news. What's different here is the role AT&T plays in the Wisconsin network. The state would only allow AT&T, a big contributor to Walker's campaign, to run the network -- not the University of Wisconsin, which already has a network, for example. The company, acting as only a subcontractor, tried to get out from under standard government conditions used to protect taxpayer money. They couldn't, and so Walker pulled the plug, as it were.

Barry Orton, a University of Wisconsin professor of telecommunications, criticized Walker's decision to turn back the stimulus grant (BTOP) funds: "The return of the BTOP money allows the continuation of Wisconsin's current arrangement, wherein AT&T and other providers sell bandwidth on a usage-based charge model, rather than have public ownership of the network. It's the private model of ownership versus the public model of ownership.

"The model we have here in Wisconsin with BadgerNet is the same model Gov. Scott Walker wants to use with the state's power plants, selling them and then paying its owners continually for power the state currently generates itself."

AT&T also fought against a $32.3 million grant that the University of Wisconsin-Extension sought, and received, on the grounds that the academic network would compete against private industry. The company lost that one, and the state got, and is keeping, that money.

Whether here in D.C., or in Madison, the Republican frame remains the same - opposing the public interest, or even the majority of corporate interests, on behalf of the favored companies. No amount of pious posturing can cover it up.