FCC Calls for Hands-Off Policy on Internet

The Internet, which generated some $300 billion in revenue last year, should remain free from government regulation, the Federal Communications Commission’s Office of Plans and Policy (OPP) said in a report in July.

The report, prepared by Jason Oxman of the OPP’s Advanced Communications unit, appears to conflict with a study issued by the Federal Trade Commission earlier in the year.

In that study, the FTC said government controls should be enacted only as a last resort if industry self-regulation – which it strongly endorsed – does not work out.

The FCC report asserts that the government should not use the possibility of future problems to impose regulations on the Internet. Instead, it recommends the United States “continue its oversight [of the Internet] to ensure that market forces do not fail or are otherwise unfairly manipulated by inappropriate behavior by entities with market power.”

Net-Generated Revenue to Double.

Without providing an industry-by-industry breakdown of how it determined that the Net produced about $300 billion in revenue in 1998, the report predicts that amount will double in a year, driven by market forces, investment and competition without government intervention.

Noting that the Internet “is rapidly changing the way Americans do business,” the FCC report states that there are more than 6,000 companies providing Internet access to consumers, and that more than 80 million Americans have an Internet connection. What’s more, the Net has generated some 1.2 million jobs thus far.

Tax Break.

President Clinton signed a bill into law last year that protects the Net from any new federal, state or local taxes for three years pending the result of a government committee’s review of the situation.

That panel recently cited an Ernst & Young study calling the impact of Internet taxes “minimal” on state and local governments.