Net Neutrality Regulation => Online Product/Service Definitions => Online Taxation

by on September 26, 2009 · 9 comments

Adam Thierer and I have warned that neutrality regulation, once imposed on broadband providers, will extend to other Internet services wherever “gatekeepers” are alleged to control access to a platform used by others. In short, the slippery slope of creeping common carriage is real and we’re already heading down it, with cyber-collectivist “luminaries” like Jonathan Zittrain and Frank Pasquale demanding neutrality regulation for devices, application platforms like iTunes and Facebook, and search!

TLF Reader Jim Reardon made a particularly astute observation on my post asking whether Americans really want net neutrality regulation:

Regulation of any service, product or industry is preceded by definition. Once defined, it is subject to taxation.

[Net Neutrality regulation] is a prelude to taxation of Internet products and services. It will likely start with telephony services and proceed accordingly to financial services, and continue from there.

As such, the activity is essentially neutral insofar as technology innovation is concerned — so long as applicable taxes are paid the government will ensure that the service is not disfavored by the network operators.

Absolutely right! One of the greatest barriers to government regulation and taxation of the Internet today is the lack of clear definitions: The FCC rules will tell you precisely what “cable television” or “commercial radio” mean, but the concepts of “social networking,” “Internet video,” “blogging,” and even “search” are indeterminate and constantly evolving.

Ronald Reagan once quipped:

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it.  If it keeps moving, regulate it.  And if it stops moving, subsidize it.

Fortunately, government’s ability to implement this view depends—to paraphrase President Clinton—”on what the meaning of the word ‘is’ ‘it’ is”: Allowing “it” to remain beautifully amorphous may be the best way to keep government at bay.

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