Steve Siegel with the Boss Business Hour interviews Seton Motley, President of Less Government, to discuss Internet regulations and the impact such regulations would have on businesses and individuals.

What impact would government regulation have on content?

Part I of II

Transcript:

Siegel: Well folks, welcome to the program. Good to have you with us here. Mike Siegel with you at the BOSS Business Hour. We deal with specifically small business advocacy and making sure that that advocacy is for you, the small business owner, as it relates to public policy. There is more and more regulation and encroachment on small business it seems day after day and week after week, which is ironic because the economy is going to come back only when small business, the engine of this economy, is given the opportunity to do its work and be productive. Fundamentally, it is 70% of the economy yet it has not been given any kind of support system. We know the big banks have. The insurance companies and the auto manufacturers, but not small business to any great degree. The unions certainly have been taken care of and all of that. So, we are delighted to be joined by a gentleman who is very actively involved in another one of these issues that could wind up being a severe encroachment on small business in terms of the use of the internet, which is a major issue that we have talked about before – net neutrality. We are joined by Seton Motley of lessgovernment.com and are delighted to have him with us. Mr. Motley, how are you? Good to have you with us.

Seton: Hello Mike Siegel. How are you, Sir?

Siegel: I am doing very well, although we have been covering this issue for a very long time and is frankly rather distressing to see the government want to step in and doing any kind of control or regulation over the internet. The first thing would be, in your review of this, where is the justification, because the appeal's courts have said there is none for the FCC to take over regulation of the internet. How can they justify it when basically it is not even a national issue? It is an international issue. This is hyper space. It is all over the world.

Seton: That is exactly right.

Siegel: What is the thinking of the FCC?

Seton: You know, if you want to localize it even further, I don't know if you saw this story, just real briefly, the city of Philadelphia was going to charge bloggers a business tax in the city of Philadelphia. You are talking about an international internet and they want to tax bloggers that live in Philadelphia proper. It is absurd. But as far as the internet is concerned, this is why it is so frightening, and this has already created so much uncertainty in the tech sector, is not just the DC Circuit Court has unanimously said, You don't have the authority FCC, 299 members of congress have said, you don't have the authority. So, you do the math, that is a lot of democrats, too, including by the way the congressional black caucus. You have a bunch of left wing groups which are almost always siding with democrats like the Sierra Club, like the AFL CIO, the communication workers of America, all saying cut it out, you don't have the authority, don't do this, it is bad for business. So, what is frightening about this is is that they are on the verge in the November 30th FCC monthly meeting of voting to power grab the internet and start regulating it like they regulate landline phone lines. Not only is that horrendous, but then it raises the question of, okay, there is never going to be an issue where the FCC has this much opposition wind up against it and they went ahead and did it anyway. What is next?

Siegel: You make a good point and I think one of the biggest issues here is the power grab and the notion that somehow the central government can take more control. I would ask this specific point, where is the justification when every single internet broadcast, every single internet content message, every single, in listening to small business across the country, they fear the fact that this kind of control would limit their ability to market on the internet. A lot of small businesses have websites and they do a lot of things on their websites in order to market. What is the FCC going to do if they get this power to control small business marketing its product or service on the internet when every single web site, even if you, talk about Philadelphia, lets say you sell Philadelphia Steak Sandwiches, the fact is that if you control them and charge a tax or if you control the content, people in Mosan Beak, people in China, people in Asia, people in Russia, people in Afghanistan for that matter, the ones that have the internet, not many do I guess there, but wherever you are in the world, you can see that. So, where is the authority for a national organization to control an international communication vehicle?

Seton: That is exactly right. It is an overreach of about 15 different directions, and that is most certainly, if you are talking about an international, a world-wide web, not a US wide web. So, to say that they are going to assert this much authority is just, there is no authority. We also have to remember, everybody, that the FCC doesn't have authority over anything unless and until congress writes a law giving them the authority. You have the chairman of the FCC, Julius Genachowski, himself in a Washington Post interview two weeks ago saying, "we are dealing with a communications act that doesn't address broadband." He acknowledges that he doesn't have the authority, which of course he is tacitly doing by already once initiating the process of reclassifying the internet by voting to say we don't have the authority, so we are going to create it. What this does, and this is why it is so important to small businesses, is it applies all the authority they have over landline telephones to the internet. Remember, that is the power to tax, because the FCC taxes your phone. It is the power to price control, because FCC price controls on phones. So, it is a cornucopia of bad news. It is Pandora's box of regulations. The way you would treat the phone lines, which have not had any innovation in 70 years because of this heavy handed regulation, and applying it to the internet. It is just an incredible overreach. It is in the face of the other two branches of government. Remember, the FCC is an executive branch agency. The judicial and the legislator are tell them, stop it, you don't have the authority. You have got a bunch of outside groups on both sides of the aisle saying, stop it, cut it out, and he is on the verge of going ahead anyway. It is, it is a huge assault on businesses of all sizes. If you are going to start taxing the internet, that is going to raise the price of doing business for every small business in the country. If you are going to start price controlling what is going on as far as internet delivery service is concerned, that is going to degrade considerably the internet speed and quality that we are getting right now that is improving every day. So, just like everything else, the small business does best when government does least. For the person just starting out, every new regulation, every new rise in price, every new tax, it raises impulsive entry into the business world. This is just a huge, huge, increase in the barrier of people to get in. Like you said, the higher you raise the barrier for small businesses to get in the game and play, the longer this recession is going to be.

Siegel: Well, you know, the thing about it, Seton, is that what scary even beyond the fact of the power to tax and the power to regulate is the power to control content. What about that? In other words, you can think of any number of businesses that, maybe someone wants to advertise something that is a little provocative that maybe children shouldn't see. Well, the parents have the responsibility to get one of these softwares that will block their child's computer from those things, but all of a sudden you could have the commission coming in and saying, Your business cannot market on the internet.

Seton: It is not just child stuff. You know, it is not just concern for the children and stuff like that. How well is nationalreview.com going to do if the government is controlling content on the internet? It becomes a political issue. It becomes a free speech issue. A first amendment issue with regard to, look, 90% of the organizing and growth of the tea party movement has been online. I mean, that is how they started up. Little blogs, little chat rooms. The blossom of this nationwide movement that we are watching topple established politicians left and right has been almost exclusively on the internet – thanks to the internet. Now, these people are small government, free market people. How are their websites going to be treated by a government-run internet. Are they going to do as well as the left wing websites? I don't think so. Again, you are right with the business prospective, which is if you are doing something that the government doesn't like. For instance, if you are a business that contributes to republicans and conservatives, what would an Obama FCC regulations do to your business? It is kind of like the IRS going after… do you remember Barrack Obama shut down a bunch of car dealers and it turned out that the vast majority of them had been republican contributors. Well, imagine what would happen if they had control of the internet and had republican contributors' websites to deal with and to mess with? It is a terribly frightening concept from just about every prospective you can name.

Siegel: Seton Motley is here from lessgovernment.com. We are coming right back with the BOSS Business Hour. Stay with us.