NetCompetition

Kudos to Larry Darby of the American Consumer Institute for his outstanding new study on the destructive effect of regulation on innovation. Please read it if you are at all interested in innovation.

The study debunks the views of some that government, regulation and regulators are somehow a font of innovation.

After reviewing the relevant literature and evidence on the subject, Dr. Darby concluded that:

• innovation is naturally flourishing without government involvement or micromanagement;
• burdening broadband providers with new common carrier burdens would severely discourage innovation; and
• limiting innovation in one part of the ecosystem would ultimately diminish innovation in the entire Internet ecosystem.

At core, the new notion floated by some that more FCC regulation would encourage innovation is nonsensical and unsupported by any literature or evidence.

The big takeaway here is that new “Mother may I” regulations, which effectively require some market participants to get FCC approval for their innovations, in order to protect or advantage others’ innovations, is not innovation policy. It is old-fashioned industrial policy where government picks market winners and losers. This is a policy approach long proven to grossly underperform market-based policies.