The Second Internet revolution is upon us. The development of high-speed or so-called broadband Internet access soon will mean no more "booting up" or logging on--users will have instant access to the Internet. Moreover, Net users will be able to go to any Web site with the click of a mouse and have that site appear in moments. They also will benefit from streaming audio and video and rapid downloads.
The Federal Communication Commission (FCC) applauds this progress but also concludes that an bureaucracy imposed on this emerging competition will slow progress, and the losers will be the people.
But in Fairfax City, local leaders succumbed to entreaties by Internet service provider America Online (AOL) and passed an ordinance regulating the Internet activities of the local cable company. AOL is lobbying all over the country for similar local laws, because it is afraid it will lose its 21 million customers to competitors who will offer high-speed Internet access over cable.
Of course, AOL is teaming with Bell Atlantic and others to offer service over the phone lines to go head-to-head with Internet service via cable. It has invested billions in the development of satellite service too. But why fight it out with competitors when governments such as the one in Fairfax City will protect you?
If cable companies are forced to do business with AOL, rather than let the marketplace determine their partners, they will have less incentive to spend the enormous amounts required to upgrade their systems to provide broadband service.
The Internet has developed rapidly because regulators have not engaged in regulation. With 30,000 jurisdictions holding the potential power to regulate cable companies offering broadband service, as Fairfax City has done, we could face a crazy quilt of Internet regulation that will undermine the second Internet revolution.
Local regulation goes against the obvious conclusion reached by the FCC: Don't regulate if competition is working. So why does Fairfax City have it so wrong while the FCC has it right?