Appearing at the American Enterprise Institute (AEI) on Wednesday, O’Rielly said that what the White House wants the commission to do is either bad for the economy or contrary to the law.
“The foundation of the U.S. economy is for private companies to offer products and services -- not government-sponsored companies,” O’Rielly said.
"Whether federal regulation would be of value, he said, “is something I have to step back from a bit. The question is whether I at the FCC have the authority to overturn… law.”
President Obama has repeatedly expressed a desire in recent weeks for the FCC to take steps towards regulating the Internet and overturn laws in 19 states that prevent municipal governments from starting their own Internet services.
In his State of the Union address Tuesday evening, Obama reiterated his plan to get the federal government involved in providing “free” Internet to all Americans: “I intend to protect a free and open internet, extend its reach to every classroom, and every community, and help folks build the fastest networks.”
Last week, President Obama delivered an address in Cedar Falls, Iowa, asking for the change to be made. “Today, high-speed broadband is not a luxury,” President Obama said. “It's a necessity.”
The first part of President Obama’s policy prescription – municipal broadband – relates to state laws that affect how municipalities may go about starting their own Internet services. According to Obama, those states laws “make it really difficult for communities to provide their own broadband.”
But at AEI, O’Rielly said that Obama has not accurately represented the issue.
“I challenge everyone to cite specific state laws that proponents [of federal involvement] oppose,” O’Rielly said. He explained that in many states, statutes simply require municipalities to hold referendums before using public funds to provide Internet services.
“That’s called democracy,” O’Rielly said.
According to Census Bureau data released in September, 74 percent of Americans already have access to the Internet at home. Accounting for those who can access it at work, school, or public libraries, Pew Research found that just 15 percent of Americans reported not using the Internet at all.
Of the 15 percent who did not use the Internet, one-third (5 percent) said they had no desire to do so. “They are not interested, don't want to use it or don't need it,” Pew reported in 2013. Overall, 3 percent of Americans reported that they did not use the Internet due to financial reasons.
It is unclear how many of those Americans live in states or municipalities that would be affected by a change in FCC regulation.
The second measure President Obama has called for is “net neutrality.” Net neutrality originated as a concept in a 2003 article published by Columbia University Professor Tim Wu. Among other things, it means that Internet Service Providers (ISPs) should not allow some users to pay for better services, and they should not be permitted to block content on the Web.
For the FCC to impose net neutrality, it would need to reclassify Internet service as a “Title II” utility. Doing so would place it in the same category as telephones, television and radio, and allow the FCC to dictate regulations independent of Congress.
Opposition to the measure has been vocal. Broadband for America, a group comprised of major Internet service providers, has called the possibility of reclassification an “unprecedented government interference that would stifle private investment, hinder innovation and undermine the growth of the Internet.”
O’Rielly argued that reclassification would also increase costs for consumers.
Companies that fall under Title II classification are required to pay into a federal “Universal Service Fund” (USF). O’Rielly pointed out that there is consensus among experts that the fee would be passed on to consumers in the form of higher prices.
As a result, he said, some consumers who currently have Internet service would then find it unaffordable.
Though net neutrality would theoretically prevent private companies from controlling speech on the Internet, calls for the federal government to impose its own speech regulations have mounted during President Obama’s tenure in office.
Cass Sunstein, Obama’s former administrator of the Office of Information and Regulatory Affairs, called for a “First Amendment New Deal” in his 1993 book, The Partial Constitution, that would include a "nonpartisan panel" to ensure "diversity of view" on the airwaves.
As the Internet surged in popularity, Sunstein worried that Americans might fail to choose to hear the “right” opinions. Sunstein explained his reasoning in his 2001 book, Republic.com. “Private choices, under a system of limitless options, may lead in unfortunate directions, both for them as individuals and for society at large,” Sunstein wrote.
Sunstein suggested that people may need to be forced to make the “right” choices when it came to news consumption. He theorized that one method of accomplishing that might be forcing websites to post links to content with which they disagreed.
Sunstein recanted those views during his confirmation hearings in 2009, and he left the administration in 2012.
O’Rielly was asked whether such views still persist among some officials in the Obama administration.
“Everybody needs a nudge, right?” O’Rielly responded, referring to Sunstein’s suggestion that the federal government should “nudge” people into making the right choices. “We aren’t regulating content yet, thankfully.” he added.