Broadband & Neutrality Regulation

A funny thing happened to the FCC Friday on its way to regulating the Internet:  a federal appeals court panel questioned the agency’s authority to regulate the web.    There’s no final decision yet, but an adverse ruling could stop the agency’s Internet regulation plans in their tracks.    And for good reason.

In proposing new neutrality rules last October, the FCC one rather inconvenient obstacle:   there isn’t anything in the Communications Act, or any other statute, actually giving them power to regulate such things.   Internet service, by the FCC’s own reckoning, is not a telecommunications service, nor is it cable TV, or broadcasting, or anything else the law give the FCC authority to regulate. Continue reading →

I’m attending the Tech Policy Summit at CES in Las Vegas today and tomorrow. Lots of good discussions. The focus of the first panel, which was entitled, “Making Nationwide Deployment and Adoption of Broadband a Reality,” was what we should expect from the National Broadband Plan. This is particularly timely as the FCC just announced today it would be delaying the rollout of the plan.

This TPS session was moderated by technology journalist Steve Wildstrom. The panelists were:

  • Susan Crawford, Professor of Law and Professor of Information, University of Michigan
  • Neil Fried, Senior Telecommunications Counsel, U.S. House Committee on Energy and Commerce
  • Anna Gomez, Deputy Assistant Secretary of Commerce for Communications and Information, NTIA
  • Karen Jackson, Deputy Secretary of Technology, Commonwealth of Virginia
  • Carlos Kirjner, Senior Advisor to the Chairman, FCC
  • Andrew McLaughlin, Deputy CTO, Internet Policy, OSTP

Below is my summary of what each of the panelists had to say.

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As early as 1990, telecom industry observers speculated about the shift away from traditional circuit-switched telephony to “Voice Over IP” (VoIP). By the late 1990s, Internet industry observers began using the term “Everything Over IP” (VoIP) to describe the ongoing and seemingly inevitable shift towards Internet distribution of not just voice, but all forms of, audio, text and multi-media content. Today, term has become a victim of its own success:  “Of course, ‘everything’ is delivered over IP. How else would you do it?”

While this capitalist success story is among the greatest technological triumphs of our time, a similar rhetorical pattern is, unfortunately, playing out in very different arena of Regulatory Creep. The crusade for “net neutrality”  is metastasizing before our very eyes into a broader holy war for regulating “Everything” (EoIP) in the name of “protecting neutrality.” The next target is clear: search engines Google—as an op-ed in today’s New York Times makes crystal clear. Adam Thierer and I warned about this escalation of efforts to get government more involved in regulating Internet back in October in a PFF paper entitled Net Neutrality, Slippery Slopes & High-Tech Mutually Assured Destruction:

If Internet regulation follows the same course as other industries, the FCC and/or lawmakers will eventually indulge calls by all sides to bring more providers and technologies “into the regulatory fold.” Clearly, this process has already begun. Even before rules are on the books, the companies that have made America the leader in the Digital Revolution are turning on each other in a dangerous game of brinksmanship, escalating demands for regulation and playing right into the hands of those who want to bring the entire high-tech sector under the thumb of government—under an Orwellian conception of “Internet Freedom” that makes corporations the real Big Brother, and government, our savior.

Today’s editorial is only small dose of what’s to come. The floodgates will really open and let forth a great gushing rage of demands for sweeping regulation of the entire Internet under the banner of neutrality when the deadlines pass in the FCC’s “net neutrality” NPRM (comments due January 14, 2010; reply comments due March 5). Continue reading →

It may be possible to wring consistency from the “open” manifesto Google SVP of Product Management Jonathan Rosenberg published earlier this week, but I can’t.

He correctly extols the virtues of openness in technology and data for its pro-competitive effects. Closed systems may be profitable in the short run, but they are weak innovation engines:

[A] well-managed closed system can deliver plenty of profits. They can also deliver well-designed products in the short run — the iPod and iPhone being the obvious examples — but eventually innovation in a closed system tends towards being incremental at best (is a four blade razor really that much better than a three blade one?) because the whole point is to preserve the status quo. Complacency is the hallmark of any closed system. If you don’t have to work that hard to keep your customers, you won’t.

But his paean to openness draws a tight line around Google’s profitable products: Continue reading →

Last week I commented on a severely one-sided FCC net neutrality hearing that featured a endless parade of horribles being prophesied by virtually every speaker. The litany of spooky stories became tedious and absurd. Everyone foretold of the impending doom that awaits unless government intervenes to save us from various corporate conspiracies to “silence” our voices.  Unsurprisingly, evidence was in short supply. It was pure Chicken Little poppycock.

This got me thinking again about what I have referred to as the “problem of proportionality.” I have discussed the problem of proportionality in the context of public policy debates about online safety and privacy, but it seems equally applicable to debates about net neutrality. Here’s how I explained the “problem of proportionality” in an earlier essay:

let’s think about how some of our lawmakers and media personalities talk about the Internet.  If we were to judge the Internet based upon the daily headlines in various media outlets or from the titles of various Congressional or regulatory agency hearings, then we’d be led to believe that the Internet is a scary, dangerous place. That ’s especially the case when it comes to concerns about online privacy and child safety. Everywhere you turn there’s a bogeyman story about the supposed dangers of cyberspace. But let’s go back to the numbers. While I certainly understand the concerns many folks have about their personal privacy or their child’s safety online, the fact is the vast majority of online transactions that take place online each and every second of the day are of an entirely harmless, even socially beneficial nature.  I refer to this disconnect as the “problem of proportionality” in debates about online safety and privacy. People are not just making mountains out of molehills, in many cases they are just making the molehills up or blowing them massively out of proportion.

Again, much the same is true of net neutrality. Indeed, it is even more true since actual net neutrality “incidents” are so hard to come by.  Continue reading →

We’ve spent a lot of time here at TLF talking about the sound economic arguments against net neutrality regulation. We argue that net neutrality regulation will result in worse consequences than leaving the internet relatively unregulated. But to me, the more important point is that net neutrality regulation is itself unjust.

Why do I make such a strong claim? Simply put, people own their stuff. People can decide what to do with their stuff. People can enter into mutually-consensual agreements about what to do with their stuff. As long as both parties agree on the terms, both parties are deciding what to do with the property they each bring to the table. All that is just. It is unjust, on the other hand, to take someone’s property. It is similarly unjust to use force upon someone (e.g. by taking their money, which is other property they own) as a punishment for doing something just. So, it would be unjust for me to reach into your wallet and take a “fine” from you because I don’t like that you sold your copy of Anarchy State & Utopia to Berin for what I think is far too low of a price. I could argue to you that Berin is giving you a bad deal or tell Berin to stop exploiting you, but it is unjust for me to steal from you to enforce my personal desires about the terms of your agreement. Continue reading →

Robert Corn-RevereAs I noted here a few days ago, the Federal Communications Commission held a workshop on Tuesday about “Speech, Democratic Engagement, and the Open Internet.”  It was a shockingly one-sided affair with the deck being stacked almost entirely in favor of advocates of Net neutrality regulation. Worse yet, those advocates shamelessly made up spooky stories about a future of “private censorship” that could only be remedied by using the First Amendment as a club to beat private players into submission. The token opposition at this Chicken Little circus was Robert Corn-Revere, a Partner at the law firm of Davis Wright Tremaine LLP in Washington, D.C.   Bob set the record straight–both in terms of baseless accusations that were flying that day as well as the revisionist histories of the First Amendment that were being put forward. I’m happy to report that Bob allowed PFF to reprint his remarks as a new white paper entitled, “The First Amendment, the Internet & Net Neutrality: Be Careful What You Wish For.”

In his essay, Corn-Revere discusses the relationship between the First Amendment and regulatory policy, particularly the treatment of new communications technologies, and he warns that government regulation of broadband networks could “provide the vehicle for advancing new First Amendment theories for media regulation” and online speech and expression more generally.  “It should not be forgotten,” he argues, “that the federal government’s initial impulse was to censor the Internet and to subject it to a far lower level of First Amendment protection. It pursued this agenda for more than a decade but was blocked by a series of First Amendment rulings.”  The Communications Decency Act and the Child Online Protection Act are just two notable examples. Luckily, the courts determined that “the open Internet would be at great risk if the government is allowed to exercise such power,” he notes, and they struck down such laws.

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The European Commission today announced the settlement of its antitrust case against Microsoft concerning the inclusion of Internet Explorer in its operating system. In the settlement, Microsoft has agreed to offer a “browser ballot” in its Windows 7 operating system, which Adam Marcus and I commented on in November.

It’s a relief to see that the European Commission is bringing to a close this chapter in the seemingly endless epic of its antitrust persecution of Microsoft. The Commission should have recognized that Internet Explorer’s rapidly falling market share made it unnecessary to meddle in software creation. Still, I suspect that it’s only a matter of time before the Commission hauls another Microsoft or some other innovative American tech titan into court on trumped-up charges.

Worse, such mandates could easily extend to require “ballots” for choosing one’s default search engine, media player, instant messaging client, email provider, and so on. That kind of bureaucratic interference with the delicate art of interface design will only serve to discourage Microsoft and its many competitors from including useful new features in their offerings, thus harming consumers.

Today I visited the Federal Communications Commission meeting room to attend a workshop on “Speech, Democratic Engagement, and the Open Internet.”  Honestly, I think I was stuck in the Twilight Zone, because from what the speakers at this ridiculously one-sided panel had to say: (1) the First Amendment means something entirely different than what the Constitution says; and (2) the whole Internet world is set to go to hell unless government intervenes and saves us a litany of corporate conspiracies to “silence” us.

Seriously, I thought the FCC was trying to make their broadband workshops and Net neutrality proceeding “balanced” and “evidence-based.” This one was neither.  One speaker after another regaled us with spooky stories and asked us to imagine how their particular group or service would be “blocked” or “silenced” unless Net neutrality regulations were put on the books.  But no evidence was offered supporting their scary tales.

By the time Michele Combs of the Christian Coalition got done breathlessly delivering her conspiratorial rant, for example, I half expected her to ask “What would Jesus do?” about Internet regulation.  She really laid it on thick, suggesting that ISPs were hell-bent (excuse the pun) on blocking Christian messaging across multiple platforms.  Yeah, cause it would be a brilliant business strategy to piss off tens of millions of Christians in this country. Sure, that makes a lot of sense.

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One of the more troubling aspects of the contentious debate over Net neutrality regulation is the way some proponents have sought to cast Net neutrality as “the Internet’s First Amendment.” As a die-hard free speech advocate, I find this truly outrageous and a complete contortion of the true purpose of the First Amendment.  As I have argued here before, it is incredibly dangerous thinking that puts our real First Amendment liberties at stake by empowering a regulatory agency with more means of controlling online speech and expression. Simply stated, the Internet’s First Amendment is the First Amendment, not some new, top-down, heavy-handed regulatory regime that puts the Federal Communications Commission in control of the Digital Economy.

On this point, I wanted to bring two things to your attention. The first is an outstanding address delivered today by Kyle McSlarrow, President & CEO of the National Cable & Telecommunications Association, at a Media Institute event here in Washington, DC.  And the second is this new paper by my PFF colleague Barbara Esbin.

McSlarrow’s speech was entitled, “Net Neutrality: First Amendment Rhetoric in Search of the Constitution” and it squarely addressed the fundamental fallacy set forth by the Net neutralitistas when it comes to the First Amendment. “Whatever our present-day policy disagreements about net neutrality, or even differing politics, let’s not forget that the First Amendment is framed as a shield for citizens, not a sword for government,” he argued. “By its plain terms and history, the First Amendment is a limitation on government power, not an empowerment of government,” McSlarrow said. “And… if there’s one thing the Supreme Court has made clear, it’s that rules that directly restrict protected speech cannot be justified by a government interest that is merely hypothetical.”

Absolutely correct. And these views are buttressed by the comments of Barbara Esbin in her new paper, in which she argues that “Net Neutrality is not the First Amendment for the Internet.”  She continues: Continue reading →