Sects, Lies & Red Tape

by Patricia Fusco ISP-Planet Managing Editor [May 18, 1999]

Part 3 Red Tape: The Unregulated Internet Masquerade

FCC Chairman William E. Kennard said "I believe that two things are most responsible for the explosion of the Internet, the fastest growing communications tool in the history of the world. First, this tradition of openness and second, the fact that the Internet is unregulated."

Presumably, when Mr. Kennard referred to the Internet as unregulated, he specifically meant FCC regulations. The Commission's conventional wisdom maintains that the Internet will regulate itself through private industry efforts, and state and local legislation.

The irony of this red tape-free theory is that the Internet has become highly regulated because the FCC has chosen to adapt a "hands-off" philosophy toward e-governing.

What industry, or self-regulation means to an ISP owner is that the business may potentially be taxed 50 different ways, follow hundreds of different employment laws, report to 50 public utility commissions, and be challenged in court by an endless variety of commercial trade laws.

Never underestimate a state's ability to disrupt e-commerce. As a growing ISP you've probably added e-commerce solutions to expand your profitability. Are you prepared to police the content of your web servers?

EBay abruptly terminated firearm sales on their popular auction site after a precedent-setting New York court held a wholesaler liable for manslaughter.

Much maligned eMeringue discontinued web sales of whipped egg whites resembling private body parts because the Idaho Commission on Electronic Commerce found that the web page contained offensive and obscene materials.

Can you afford to have your "unregulated" web servers confiscated as evidence in a fraud case? How will your ISP survive if authorities can legally impound your mail servers as evidence because some hacker borrowed your network to break into the Federal Reserve?

In the "unregulated" realm of the Internet, how can your ISP continue to profit when an IRS auditor determines that your unused bandwidth is inventory and therefore, taxable?

If this type of red tape has been credited for the explosion of Internet use, then why is the ISP industry collapsing into a black hole of consolidation mania? Independent ISPs are imploding down to a single top tier of Internet access and web-hosting providers right now.

The "unregulated" Internet is pushing ISP owners to the limits of their financial resources and independent ISPs will either need to band together to survive or sell-out.

Last week, Senator John McCain introduced the Internet Regulatory Freedom Act of 1999. McCain believes that regulatory inactivity will help promote development and deployment of advanced telecommunication services nationwide.

Congressional assurance to "do nothing, adds a deliciously cynical twist in the ongoing battle independent ISPs face to bring news services to market.

Consumer sects, telephone company lies and legislative red tape are choking the life out of ISPs right now. The FCC's disallowance of Internet regulation and Congressional renunciation of any legislative efforts will transform the Internet into a look-alike gateway to a branded worldwide web.

Independent ISPs are about to become corporate headstones littering the roadside of the "unregulated" Information Super Highway.

eBay Confirms Federal Investigation (Feb. 26, 1999) by Patricia Fusco InternetNews.com

McCain Seeks to Build Regulation-Free Internet (May 14, 1999) by Patricia Fusco nternetNews.com

Read Sects, Lies and Red Tape Part 1

Read Sects, Lies and Red Tape Part 2