FCC says 'unregulation' boosted Internet growth

Thirty years of "unregulation" of data services by the Federal Communications Commission has fostered the hyper growth of the Internet, concludes a report by FCC staff released Monday.

While the current path has served the telecommunications industry, the working paper by the FCC's Office of Plans and Policy warns that the convergence of data, video and phone services pose a challenge for the agency.

"The FCC has met the introduction of new communications technologies with the right attitude: let the marketplace, not the government, pick the winners and losers among new services," the study says.

The paper's conclusions mirror statements made by FCC Commissioner William Kennard, that the agency has no interest in regulating the Internet. The report, however, reflects the views of individual staff members and is not a formal statement by the commission.

The study recommends that the FCC not impose "legacy" regulations on new technologies. Some groups have argued that high-speed cable networks should be open to competing Internet service providers, similar to telephone networks.

"New technologies, while perhaps similar in appearance or in functionality, should not be stuffed into what may be ill-fitting regulatory categories in the name of regulation," the study says.

The study attributes the success of the Internet to an open system, while at the same time recommending that high-speed cable networks be left to develop without interference.

"The difference between the open system in the 1960s and now was there was only one pipe into the home," said Jason Oxman, the study's author. "Today, we are in a different environment. There are four to five different pipes into the home under development."

The paper also recommends continued deregulation of current legacy systems, such as the telephone network, and that the agency keep an eye out for anticompetitive practices.

There are currently five bills in Congress that would affect the deployment of high-speed Internet services, as well as an effort to reauthorize the agency this year. While the FCC maintains its hands-off approach, different industry interests have called for a variety of regulatory changes, ranging from giving the Baby Bells relief from parts of the 1996 Telecommunications Act to forcing cable networks to open to competitors.