The Internet is inaugurating an economic transformation no less significant than the Industrial Revolution. What was really important about the Industrial Revolution was the change in outmoded methods of production that had existed since the late Middle Ages.

These methods, especially in the textile industry, had come to be severely regulated by government, primarily to protect the status quo. Thus there was very little innovation in textile production for hundreds of years.

The Industrial Revolution changed all that because its methods of production were so new and so different that they fell outside existing regulations. A similar situation exists with regard to the Internet, which explains its amazing growth and vibrancy.

The Internet's vast expansion came about largely due to an almost complete lack of government regulation. Jason Oxman of the Federal Communications Commission has documented the government's largely laissez-faire attitude toward the Internet dating back to the 1960s.

Oxman points out that the FCC first dealt with the issue of data transmission over telephone lines as long ago as 1966. The commission then adopted a policy of treating data transmission no differently than voice. Had it adopted the European approach, which has controlled data transmission as separate and distinct from voice, the Internet might have died in its crib.

The key to the success of the Internet, says Oxman, is its openness, which has allowed providers and users almost infinite access and freedom to develop. And this openness, Oxman argues, is fundamentally a result of the FCC's policies, which kept telephone transmission lines free of government regulation and forced phone companies to maintain open access.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, January 5, 2000.

For Oxman text http://www.fcc.gov/Bureaus/OPP/working_papers
/oppwp31.pdf

For text http://www.ncpa.org/oped/bartlett.html