Herman Makes a Good Point about the Scope of Neutrality Regulations

I’ve been pretty critical of Bill Herman’s paper on network neutrality regulation, so I wanted to highlight a section of the paper that I thought was extreme sensible, and I hope that Herman’s allies in the pro-regulatory camp take his recommendation seriously:

I would offer just two minor improvements by way of clarification. First, the bill is reasonably clear but could be more explicit so that the prohibition on broadband discrimination applies only to last-mile BSPs and not to intermediate transmission facilities, where the market is highly competitive and, due to packet-switching, very unlikely to lead to bottlenecks. It may be the case that, for some services, content or application discrimination is necessary; but senders and receivers should be able to choose freely among intermediate service providers or choose not to use such services. Second, the bill should add an additional clarification for establishments such as schools, libraries, government buildings, and Internet cafes that provide Internet service via computer terminals that are owned by the establishment. In the bill’s current exemption permitting BSPs to offer “consumer protection services” such as anti-spam and content filtering software, BSPs are required to offer such services with the proviso that end-users may opt out. In the case of establishments offering patrons access to the Internet on establishment-provided computers, the owner of the computer–not the user–should be able to choose whether or not such software is optional.

If we do wind up with new regulations, I think it’s very important that they be limited to those segments of the Internet where there is at least a plausible case that the lack of competition endangers the end-to-end principle. That’s clearly not the case for the Internet backbone, for high-end Internet service targeted toward businesses, or among the thousands of businesses, such as hotels and coffee shops, that now offer Internet access.

On that second point, I think the exemption should be somewhat broader. I don’t see why the FCC should have any authority at all over the administrative decisions of a coffee shop, hotel, or other private business that offers Internet access as an incidental part of a broader service. If the policy rationale for regulations is the lack of competition, that argument certainly doesn’t apply to coffee shops. Any reasonably-sized city has dozens, if not hundreds, of coffee shops offering high-speed Internet access. I don’t think anybody wants hotels to have to defend themselves in court if one of their customers doesn’t like their firewall settings.

It’s not clear to me that the Snowe-Dorgan bill does a very good job of defining who counts as a Broadband Service Provider. The bill says:

The term `broadband service provider’ means a person or entity that controls, operates, or resells and controls any facility used to provide broadband service to the public, whether provided for a fee or for free.

This is as clear as mud and as far as I can see, it could be applied much more broadly than simply to last mile incumbents. A coffee shop or hotel plainly controls a facility (the wireless access point, for example) that provides broadband service to the public. In fact, a backbone provider arguably fits the definition too. They aren’t directly providing broadband service to the public, but their services are indisputably “used” in the process of providing broadband service to the public.

And for that matter, it seems pretty clear that I fall under the Snowe-Dorgan definition, since I have chosen not to set a password on my wireless network and am therefore sharing my Internet connection (a broadband service) to any member of the public who happens to be in range. Is my neighbor entitled to file a complaint with the FCC if they don’t like the way my firewall is configured?

Now, I’m sure that’s not what Snowe and Dorgan intended the law to do. And perhaps there’s a nuance to the language that would exclude me from being answerable to the FCC for the way I configure my access point. But with Herman as a notable exception, there seem to be very people giving these sorts of concerns serious thought. That’s a shame because while I think any neutrality regulations are likely to be counterproductive, it will do far more damage if it’s poorly crafted.

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