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 II of II

Transcript:

Siegel: Folks, welcome back in. Mike Siegel here. Good to have you with us at the BOSS Business Hour. We advocate for small business, obviously, and not the least of which concerns is this net neutrality, or internet regulation. We are joined by Seton Motley of lessgovernment.com and glad to have him with us. Mr. Motley, we have been talking about all this and the impact on small business and the content factor that is huge, because, look, there are small business organizations, National Federation of Independent Business, you have a variety of these businesses, you have associations, The American Small Business League, and you have state organizations as well throughout the country that represent small business and have a particular political point of view. They have websites, these organizations do. What about the impact on the content that those organizations present?
Seton: That is exactly right. I mean, this is the thing, as huge as the internet is now, every day that goes by we move a little bit further away from the old media model. You know, print journalism is going away. TV broadcast and cable television, more and more of that kind of content is being produced for exclusively the internet. Ten years from now when you get in your car it is going to be an internet radio on your dashboard, not a broadcast radio. So, all our news and information is moving to the web. That is why they are trying to snag it now before it gets any bigger and any more out of their control. That is true from a free speech prospective, like your radio show, it is true from your business prospective. If you have a website, again, and you are contributing to conservatives, or doing some sort of business that they don't like, they can degrade what traffic comes to your website. The web is where it is going to be for a long time, certainly for the foreseeable future, and if they can get their hands on it they way they are talking about doing with this reclassification garbage, it is going to be severely damaging from a free speech prospective, a free market prospective. It is bad news.
Siegel: Well, one of the things I have talked about many times on programs I do that involve small business is the fact that I have talked to technology experts, which believe me I am not, but what they tell me and what they demonstrate on these programs that we do, is that small business now has an enormous opportunity. Because if you would simply just learn the technologies on line, there is a huge number of free websites that small business can use, very inexpensive websites, blast emails, and all kinds of ways of using the internet for marketing at almost no cost. In fact, theoretically, if a small business hired one person who was technology ready and t heir job full time was just simply to use the internet and market the company on the internet, even a small business, you would get way more return dollar for dollar than you do now using a public relations or advertising firm. I hate to say that, and I don't mean to suggest that people get away from advertising or PR firms, but the fact is that, you just said it, everything is going toward the technology of the internet. So now, everything is going in that direction. People are beginning to realize it and use it, and all of a sudden they are going to get this glitch where the government t steps in and says, we are going to control content, we are going to control taxing you on the use of the internet, and we are now going to control the provider, in terms of what they provide and how they provide it. What is the point of that? All that would do is even suppress this economy further, would it not, if those small businesses couldn't use those marketing techniques on the internet to get their service of product known to the public?
Seton: What you said about hiring some 20-something year old kid to do internet marketing is a much more fabulous return on the small investment, you're right, than a PR firm or whatever. I spoke to a guy, I am a retired musician and several years ago I bought some music equipment from EBAY from the guy, and I talked to the guy and he was a store's, a store way up in Minnesota near Canada, he was their EBAY guy. All he did was stock EBAY stuff. They went from being a little store in the corner of a little town in Minnesota to a little store on the corner of a little town in Minnesota that sold $850,000 their first year on EBAY. You know, that is just an incredible explosion. Again, they didn't need to buy any more brick and mortar. They still sell a little bit, you know, over the counter to their customers in their town, but it became a huge business from an EBAY prospective. This was eight a years ago, so I am sure they are doing millions and millions of dollars a year on EBAY selling music equipment out of this little brick and mortar in Northern Minnesota. This is where everything is going. This is why the government wants to grab it. Do you get the impression from this administration that they do things that are so obviously destructive to the private sector that it cannot be anything but intentional? I mean, can you think of any reasonable explanation for why they would want to do this?
Siegel: See what government does, and they are proving it in this point, is that people in the private sector innovated these technologies and what government does is want to piggy-back ride on that innovation and exploit it after somebody else created it. That is what government does in its policies. The person who was one of the originators of EBAY, Meg Whitman, who was the CEO and is now running for governor of California as a republican. Now, what is going to happen, because EBAY was her company, if the control is given to the FCC about this and all of a sudden EBAY comes under regulation as to what they can sell, what they can't sell, and all that sort of thing. What happens then?
Seton: And it becomes a question of, okay, how is web traffic going to be treated, because obviously that is a huge site that requires a lot of internet packets to maintain their traffic flow and all of that. Look, the government knows that this is the wild west without all of the shooting. This is the new frontier and because of how quickly it developed, the congress, which is slow anyway and cannot keep up with anyway, it certainly is way behind. The last time they addressed telecommunications probably was 1996. As I said before, the chairman of the FCC acknowledges that it doesn't even address broadband at all. So, they are way behind now on the over regulation curve and they are desperately trying to catch up. You're right, Meg Whitman is a great example of what happens to her business if she becomes a republican governor, a thorn in the side of this administration, and they get control of the internet. Political pay back is not pretty when it comes to the government dropping its anvils on people. This is a huge anvil. The internet economy is almost 1/6th of the entire economy right now and growing rapidly. It is the only sector of the economy at this point, for all intensive purposes, that is adding jobs rather than shedding them or bouncing along the bottom. So, from an economy standpoint, you look at this and it is like doing a card trick in front of a dog. You look at it askance and think, why are they doing this? It is because they want control. This is not about anything else but about control. The more control government has over a sector the more destructive it is to small business.
Siegel: In the end, I think the point you made earlier, two-thirds of congress, the courts unanimously so far, at least at the appeals level, I think this is going to wind up being a free speech issue and a market place issue, because these providers arguably out there… the thing is they are trying to sell a problem that doesn't exist. How many people complain about their internet provider, whether it is the telephone company or whether it is a cable company or even whether it is just dial up. Who is complaining about that field? Usually legislation or federal regulation and policy results from a problem. Do you see any problem with the providing of internet service in this country to any great degree?
Seton: No. No. There was a poll recently, now granted it was from broadband for America which is an industry coalition, but the pro-Obama portion of their poll was wider over McCain than the actual vote outcome was in 1998. So, it was a pretty good sample of the American populus, and the overwhelming majority of them are very, very satisfied or satisfied with their internet service. Additionally, look at the National Broadband Plan that the FCC came up with as a result of the stimulus bill. When 95% of Americans have access to the internet at at least 4 MVPS, which is a decent speed – it's not great but it is decent, when 95% have that kind of access, why are you proposing $350,000,000 worth of spending to address the problem? Again, that is another problem that government is trying to fix that doesn't actually exist. So, you have got a burgeoning…. I mean, the internet right now is a free speech/free market Xanadu and it is exploding in directions we cannot even… and if anything made the economy and the free speech realm more horizontal than the internet. Anybody can put up a little website and start selling goods. Anybody can put up a website and start blogging and be in the game. To say that we suffer from any sort of thing on the internet that requires this kind of drastic over regulation is really a hard sell. I would not want to be the lawyer representing that side of it in the next court case that comes down the pike.
Siegel: Well, I think you are right, and I think that will be the victory in the end, but I think it is important for people not to make it for granted that we have these protections kept in place, because the commission is going after this, not withstanding the courts. We have about a minute left. What do you make of the role of the president in all of this? How involved is he in getting Genachowski to do this?
Seton: Well, that is an interesting question and we don't really know. When he was campaigning, he was taking a back seat to no one on that neutrality. He handpicked Genachowski. Genachowski, the Chairman of the FCC, was a basketball buddy of his from Harvard Law School. Free press, which is the medium Marxist outfit, is leading the charge on all of this ridiculously, basically built from scratch President Obama technology portfolio. The Chairman of the FCC's prospect attorney was previously at Free Press as their press secretary. So, there are a lot of end ties and in roads between the media Marxist push for this and the FCC. The question the becomes, is this another fight Obama wants to have? If he can get by with it and the FCC just voting themselves internet overlords by themselves and he can stay out of the fray, more the better, and that is the concern. The next big fight is stopping them from doing that on November 30th.
Siegel: Mr. Motley I thank you very much. Seton Motley is with us from lessgovernment.com. For small business people, it is a great place to go, lessgovernment.com. We thank you, Sir, for your time and we will keep on top of this issue. Thanks for being with us.