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It's probably no surprise that the blogosphere caught fire when the FTC officially announced rules meant to regulate blogger payola and social media endorsements. And it's probably no surprise that, by in large, some of the blogosphere's most prominent voices found plenty to criticize in the FTC's efforts.
And for good reason. Because no matter how well-intentioned the FTC's regulations may be, they're going to be pretty darn difficult to enforce. After all, it appears that the rules would cover activity on plenty of websites and the number of people who could potentially violate them is astronomical. If you live in the United States and can set up a blog or post an affiliate link somewhere, you could conceivably qualify for an "educational" experience courtesy of the FTC.
But what about even broader regulation? Say, of internet advertising in general? Or of the internet itself? That's where things get interesting because there is a significantly dichotomy between the reactions to the FTC's new rules and the FCC's proposed regulation of the internet itself as part of its push for 'net neutrality'.
Just one of many examples of this dichotomy: ReadWriteWeb's Frederic Lardinois asked, "Do we want the FTC to regulate the blogosphere?" He went on:
At the same time, though, we do feel queasy about the FTC starting to extend its reach to the blogosphere. While we dislike the idea of not disclosing these gifts, we're not sure having the government intervene here is such a great idea, either.
But when it came to considering regulation of the internet itself, very little uneasiness was expressed.
A similar example: Erick Schonfeld's support for the notion that the FCC should tell Apple what applications it should allow into the App Store. Complimented, of course, by previous statements such as "But opt-out systems are preferable to someone at the FTC deciding which advertising tactics are acceptable and which ones are not". If you're confused as to why the FTC should have the power to choose which iPhone apps make it into the App Store but shouldn't have the power to choose which advertising methods are acceptable, join the club.
What's going on? It's quite clear: individuals favor government regulation when they think it will benefit their own interests but they cringe when they think it might hurt their own interests. Nothing truly shocking there but the irony is still no less striking. In many cases, it's as if people are saying "I love the idea of a government-regulated internet but keep the government out of my blog!"
There are plenty of reasons why the proposed net neutrality rules are a bad idea for consumers in the United States. Just as there are plenty of reasons why blogger regulation, gambling bans and affiliate taxes are bad as well. The biggest, of course, is the fact that government regulators rarely do an effective job at achieving the goals that they set out to achieve.
Anyone who thinks that the FCC is capable of successfully and fairly implementing net neutrality in the United States for the sole benefit of consumers, for instance, would be wise to look at the tongue-lashing the FCC received by the US Court of Appeals in a legal battle over the FCC's subscriber cap for cable providers. The court expressed dismay that the FCC's cap excluded all evidence of "ever increasing competition among video providers" and wrote that the FCC's "dereliction in this case is particularly egregious". It called the cap "arbitrary and capricious", a phrase another court used to describe the FCC's policy regarding the airing of expletives on television. Both cases make it pretty clear: the FCC is more interested in exercising power than executing its mandate. Which raises the question: is this the type of agency that anyone really believes will make the internet more open in the United States?
The truth is that the internet has thrived over the past decade because it has, for the most part, been left alone by overzealous government regulators. And even when it hasn't been, the internet has largely eluded the full reach of government regulators. The outcome of that? In the developed world, the internet is widely accessible. The number of businesses, both large and small, that use it to their advantage is growing all the time. As is the number of individuals who rely on the internet to earn a living. The amount of innovation that has taken place on the internet is arguably unprecedented in history and in many markets, consumers have more choice on the web than anywhere else.
It may not be perfect and nobody is saying that there isn't room for government (the internet is, after all, a part of the real world), but thus far the internet has done as what one might call a 'free market' (well, as close to a 'free market' as you can hope to get) and the results speak for themselves. Why not leave it like that?