For Immediate Release:
March 26, 2008

Nothing More than Old-fashioned Government Regulation

San Francisco (March 26) – Today, the Pacific Research Institute (PRI), a free-market think tank based in California, released its report Wireless with Strings Attached: Net Neutrality and the Grounding of Wireless Innovation. The report shows how “net neutrality” legislation harms the consumer, stifles innovation, and risks destroying a competitive wireless market.

Wireless with Strings Attached exposes the arguments, motivations, and strategies for wireless “net neutrality” and reveals how the plan merely brings back failed policies of the past to suit certain corporate interests.

“When government has attempted to regulate networks, the result has been less choice, less innovation, and more corruption,” said Daniel R. Ballon, Ph.D., author of the report and fellow in Technology Studies at PRI. “In the telecommunications industry, for example, such regulations were so damaging that a second wave of regulations was necessary to undo the damage caused by the first.”

Wireless with Strings Attached explains why net neutrality laws threaten a thriving wireless market and shows how the desired benefits of net neutrality are already being accomplished with market forces:

1. According to government statistics, 98 percent of customers can choose among three or more wireless providers, and no provider controls more than a 30-percent market share.
   
   
2. As a result of competition, the cost charged per minute of mobile service has plummeted 85 percent over the last decade.
   
   
3. If wireless providers can be treated as public utilities, then any competitive business could fall under government control for any reason, at any time. This would result in higher prices, less competition, and less innovation.
   
   
4. Proposed regulations are driven by companies seeking favorable outcomes from government that they cannot achieve in the market.
   
   
5. These regulations will not benefit consumers. Wireless net neutrality would subvert market forces and usurp the freedom of consumers to choose the best technology, resulting in a consolidated industry built on fundamentally inferior technology.
   
   

“Wireless net neutrality is nothing more than old-fashioned government regulation originally designed for a single monopoly telecom carrier, but now dressed up for the digital age,” said Dr. Ballon. “It didn’t work then, and it won’t work now.”

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About PRI
For 28 years, the Pacific Research Institute (PRI) has championed freedom, opportunity, and individual responsibility through free-market policy solutions. PRI is a non-profit, non-partisan organization. http://www.pacificresearch.org/.