By Berin Szoka & Adam Thierer
We learned from The Wall Street Journal yesterday that “Federal Communications Commission Chairman Julius Genachowski gets a little peeved when people suggests that he wants to regulate the Internet.” He told a group of Journal reporters and editors today that: “I don’t see any circumstances where we’d take steps to regulate the Internet itself,” and “I’ve been clear repeatedly that we’re not going to regulate the Internet.”
We’re thankful to hear Chairman Julius Genachowski to make that promise. We’ll certainly hold him to it. But you will pardon us if we remain skeptical (and, in advance, if you hear a constant stream of “I told you so” from us in the months and years to come). If the Chairman is “peeved” at the suggestion that the FCC might be angling to extend its reach to include the Internet and new media platforms and content, perhaps he should start taking a closer look at what his own agency is doing—and think about the precedents he’s setting for future Chairmen who might not share his professed commitment not to regulate the ‘net. Allow us to cite just a few examples:
Net Neutrality Notice of Proposed Rulemaking
We’re certainly aware of the argument that the FCC’s proposed net neutrality regime is not tantamount to Internet regulation—but we just don’t buy it. Not for one minute.
First, Chairman Genachowski seems to believe that “the Internet” is entirely distinct from the physical infrastructure that brings “cyberspace” to our homes, offices and mobile devices. The WSJ notes, “when pressed, [Genachowski] admitted he was referring to regulating Internet content rather than regulating Internet lines.” OK, so let’s just make sure we have this straight: The FCC is going to enshrine in law the principle that “gatekeepers” that control the “bottleneck” of broadband service can only be checked by having the government enforce “neutrality” principles in the same basic model of “common carrier” regulation that once applied to canals, railroads, the telegraph and telephone. But when it comes to accusations of “gatekeeper” power at the content/services/applications “layers” of the Internet, the FCC is just going to step back and let markets sort things out? Sorry, we’re just not buying it. Continue reading →
I was just reading this interesting Broadcasting & Cable interview with Steven Waldman, senior advisor to FCC Chairman Julius Genachowski, who is heading up the FCC’s new effort on “The Future of Media and the Information Needs of Communities in a Digital Age.” The FCC’s Future of Media website says that “The goal of this project: to help ensure that all Americans have access to vibrant, diverse sources of news and information that will enable them to enrich their families, communities and democracy.” In the interview with B&C, Waldman promises that “we are not in the business of providing bailouts or encouraging bailouts to particular companies or industries,”and that “we can absolutely, definitively say that we have no plans to take over the media, and we have no plans to reinstitute the fairness doctrine while I am at it.” I’m certainly glad to hear that. As I’ve pointed out here many times before (1, 2, 3, 4), the prospect of greater government involvement in the news business raises profoundly troubling implications for an independent press and the First Amendment.
Anyway, I’ll be debating these issues with Mr. Waldman and others next week at this Georgetown Center for Business and Public Policy event on, “The Crisis in Journalism: What Should the Government Do?” It will be held on Wednesday, February 17, 2010 at 9:30am at the Newseum (Knight Conference Center) located at 555 Pennsylvania Ave here in Washington, DC. Breakfast will be served. (You can RSVP please by emailing: cbpp@msb.edustrong>cbpp@msb.edu</strong) Here’s the event description:
Continue reading →
I know, I know… do we really need to listen to another debate over Net neutrality?! I too have grown a bit tired of the issue, which has crowded out so many other important issues in the Internet policy world these days. Net neutrality simply sucks all the oxygen out of the room no matter what topic is being discussed. And it is so highly charged that it has become the equivalent of the abortion issue of the high-tech world; intellectual combatants can get so worked up over the topic that seemingly no rational debate can take place at times.
That being said, I do want to encourage everyone to check out this dynamite debate about “Demystifying Net Neutrality,” a Diffusion Group webinar which took place last week. It’s a very level-headed discussion of the issue that features my colleague Barbara Esbin, a PFF Senior Fellow and the Director of PFF’s Center for Communications and Competition Policy, and Chris Riley, a Policy Counsel at Free Press. You can now download and listen to the debate now from the Diffusion Group website. Barbara also wrote about the discussion over the PFF blog and walks the reader through the discussion. And you won’t be surprised to hear me say I think Barbara gets the better of Chris Riley in the debate!
One thing I found quite interesting in the debate was how Riley struggled to distinguish between “the Internet” versus “Internet access services” for purposes of delineating the proper confines of Net neutrality regulation. Like many other defenders of Net neutrality regulation, (see, most recently, for example, Rob Frieden, “Why the FCC’s Proposed Openness Principles Cannot and Should Not Apply to Internet Application and Content Providers“), Riley and Free Press want us to believe that this distinction is clear-cut and that regulation won’t have unintended consequences. Of course, such distinctions are always easier in theory than reality, and as Berin Szoka and I argued in our recently paper on “high-tech mutually assured destruction,” regulation always spreads. The march of regulation can sometimes be glacial, but it is, sadly, almost inevitable: Regulatory regimes grow but almost never contract.
Anyway, listen to the entire webinar discussion. It’s worth your time.
Ken Ferree, former chief of the FCC’s media bureau and PFF’s recently retired president (now Board member), has penned another devastatingly witty piece slamming the FCC’s recently announced inquiry into “the future of media and information needs of communities in a digital age” as something that,
should make the stomachs of civil libertarians everywhere queasy. Of course the Public Notice of the inquiry is dressed up in all of the usual public interest language. The Commission purports to be interested in protecting good journalism, promoting a diversity of information sources, and expanding the opportunities for a vibrant debate of public issues. We have no reason to doubt the sincerity of those representations, or of the FCC’s claim that it will consider First Amendment concerns first and foremost as the inquiry proceeds.
The problem is that
the very act of initiating such an inquiry will chill protected speech; government inquiry into what is and is not working in the area of news, information, and media is itself an affront to the First Amendment. And it is no answer that the Commission has embarked on this journey with beneficent motives, it has no power to derogate from the protections of the First Amendment in the name of what one group of bureaucrats may think are important government interests.
Can there be any doubt but that any category of speakers that are even indirectly regulated by the FCC will be mindful of this new inquiry and will curb the nature of their conduct and communications in light of it? What great potential for mischief the FCC has spawned merely by initiating this little inquiry! Regulation by “raised eyebrow” has become a well-established tool for a number of federal agencies, including the FCC, but with this inquiry the Commission has taken the concept to a level heretofore unknown – this inquiry is
regulation by penetrating leer.
The rest of the piece is well worth reading. But of course, the FCC will continue on their merry way anyway presuming neither their their complete lack of jurisdiction nor the First Amendment prevents them from “merely asking questions”—as with asked open-ended questions about things like cloud computing, online privacy (a slightly different matter) and online content controls that don’t come anywhere near the agency’s jurisdiction. Adam and I will be filing comments on the “Empowering Parents” inquiry questioning this “questioning.”
http://blog.pff.org/archives/2010/02/a_chill_wind_blows.html
Northwestern Law Prof. James Speta has a new paper out that touches on many of the themes that Barbara Esbin, my colleague at The Progress & Freedom Foundation, has been covering in her excellent work explaining why the FCC doesn’t actually have have the vast, essentially unlimited authority over the Internet that it has asserted in its recent effort to enforce its non-binding 2005 net neutrality policy statement and its ongoing net neutrality rulemaking. (See her FCC comments on that issue here and Adam’s thoughts on this here.) Speta’s thesis also seems to parallel the approach taken under PFF’s 2005 Digital Age Communications Act (DACA), which emphasized focusing on on unfair practices and relying on a standard of consumer harm as in antitrust rather than trying to enshrine abstract principles like “neutrality” into law.
Anyway, here’s the abstract for Speta’s paper: Continue reading →
I testified this morning in the House Energy and Commerce Committee’s Subcommittee on Communications, Technology, and the Internet at a hearing titled, “An Examination of the Proposed Combination of Comcast and NBC Universal.” Among those testifying were Comcast Chairman and CEO Brian L. Roberts, and NBC Universal President and CEO Jeff Zucker. Down below I have attached my brief remarks (we only had 5 minutes), but see the Scribd doc at the very bottom to also see the embedded charts. I also wrote a paper about the proposed deal back in December entitled, “A Brief History of Media Merger Hysteria: From AOL-Time Warner to Comcast-NBC” as well as this editorial for Forbes.
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Mr. Chairman and members of the Committee, thank you for inviting me here today. My name is Adam Thierer and I am the President of The Progress & Freedom Foundation (PFF).
Although we are still early in this process, there has already been a great deal of hand-wringing and even some dire predictions about the pending merger of Comcast and NBC Universal. I hope to put this proposed marriage in some historical context and explain why the deal certainly won’t have the detrimental impact some critics fear, and also explain why it might even be one potential model for how to sustain traditional media going forward.
Beware Media Merger Hysteria
First, let’s remember that we’ve been here before. Paranoid predictions of a media apocalypse have accompanied the announcements of many previous media mergers, from AOL-Time Warner to News Corp.-DirecTV to XM-Sirius.[i] In these cases and almost all others, however, the “sky is falling” claims proved to be greatly overstated.[ii] The only “harm” that one could reasonably claim came from those mergers was not to consumers or content providers, but to the merging firms themselves and their shareholders. That’s because many mergers simply fail to create the sort of synergies and benefits originally hoped for and consequently die of natural causes over time.
Other firms, however, have found ways to make deals work and deliver important new services that previously were unimaginable or simply too expensive to offer alone.[iii] Regardless, the point here is that we’ll never know what works unless we permit marketplace experimentation with new and innovative business models. Continue reading →
The Washington, D.C., fight over “net neutrality” in some ways only scratches the surface of what’s really at stake in the question of government regulation of Internet service providers’ treatment of online content. The downside of permitting FCC and Congressional authority over cyberspace “neutrality” is hard to overstate.
A former colleague and friend, now at New Media Strategies, sent me a January 2010 article—“The Splinternet means the end of the Web’s golden age”—about the proliferation of non-compatible devices used online, and th
e shielding of much new content behind logins and passwords, like the way News Corp. “hides” Wall Street Journal content behind a paywall, and other perceived insults. The author doesn’t see the trend as reversible, but the tone implies what an ominous development this somehow is, as if all this abundance and customization is negative, and that caution is in order.
But the realities of pay models and splintering—like the fact that some journalists have families to feed and can’t write for free, that Google doesn’t see much of what’s on Facebook, and that I can’t stream your iTunes—have no metaphysical, free speech, or public policy implications. Emergent splintering online represents the beginnings of a groundbreaking expansion of the Web’s basic capabilities, not a curtailment. (Besides, many with pro-neutrality views have been upset with Google lately anyway.)
This hand-wringing and use of the term “splinternet” reminded me of a related speculation I’d made in Forbes nearly 10 years ago about the tailoring of networks and pipes. Disturbed by then-burgeoning calls for regulation of the Internet emerging from various quarters over issues like privacy, spam, porn and cyber-trespass, I called for a “splinternet” mindset then and put it as follows:
The Internet needs borders beyond which users can escape damaging political resolutions of [policy] battles, which are rooted in the Internet’s non-owned, common-property status. Conflicting legislative visions in a cyberspace populated by exhibitionists at one extreme and would-be inhabitants of gated communities on the other, reveal the basic truth that not everybody wants or needs to be connected to everybody else.
Continue reading →
The Federal Communications Commission released its 102-page fiscal year 2011 budget request to Congress this week. Here are some fascinating factoids about the agency that I’ll pass on without commentary, beyond saying that they caught my attention:
- The FCC has hired “close to 54 data experts, statisticians, econometricians, economists, and other expertise” to help with the National Broadband Plan mandated under the Recovery Act. These are “term employees,” meaning they’re not permanent, but the FCC says it needs more permanent hires to work on broadband after the plan is done. (p. 2)
- The commission asks for a “budget” of $352.5 million. (p. 1) But its total requested spending actually tops $440 million, because it also asks for authority to spend $85 million of spectrum auction proceeds to cover the cost of auctions. (p. 5)
- The administration proposes to give the FCC authority to charge user fees for unauctioned spectrum licenses, with projected revenues totaling $4.8 billion through 2020. (p. 6)
- The FCC commits to 24 “outcome-focused performance goals.” (pp. 16-29) Most of these goals are phrased as activities, not accomplishments, with lots of verbs like “enact,” “encourage,” “facilitate,” “enforce,” “promote,” “work to,” “foster,” advocate,” and “maintain.” In some cases, one can identify the actual concrete outcome by looking at additional wording or performance targets. It’s clear, for example, that the FCC wants to make sure that all Americans have access to broadband. In other cases, the concrete outcome, or how we would know if it is accomplished, is not clear. For example, the only targets listed under the goal “Promote access to telecommunications services to all Americans” are targets for enforcement actions rather than measures of whether the FCC has actually accomplished the desired outcome.
- The FCC has been supported almost entirely by regulatory fees assessed on regulated companies, with virtually no direct appropriations of tax dollars since fiscal year 2003 (p. 31).
- Spectrum auctions have generated more than $51.9 billion for the US Ttreasury. (p. 33)
Panel #2 at this year’s “State of the Net” pre-conference featured a lively debate about net neutrality and investment. It included a debate between Hal Singer of Empiris LLC and Michael Livermore of the New York University Law School. It also featured the comments of Markham Erickson of the Open Internet Coalition and Christopher Yoo of the University of Pennsylvania Law School. The panel was ably moderated by Susan Crawford. Here are some highlights of what proved to be a fun and feisty debate, which began with the comments of Hal Singer:
Hal Singer, Empiris LLC
- FCC wants to constrain pricing flexibility for networks
- Not clear we need price regulation for service delivery in absence of clear market power
- FCC offers novel “collective action” theory to justify regulation, but doesn’t make sense and doesn’t apply here
- Investment at edge of network will not decline in absence of Net neutrality regulation
- Outlawing priority delivery would discourage investment in new networks AND applications
- “Net neutrality would harm the very folks it seeks to protect”; end users will see price hikes
- Investment at core is crucial
Continue reading →
FCC Commissioners Michael Copps and Meredith Attwell Baker kicked off the 2010 Congressional Internet Caucus “State of the Net” conference this afternoon with two brief keynote addresses. Below I’ve summarized the highlights here from my live Tweeting at the event (@AdamThierer):
Commissioner Copps
• “every great challenge this country faces… has a broadband component at its core if it’s going to be successfully dealt with”
• Broadband is the great enabler; Private sector will lead, but national objectives and visionary public policy also have to be at core
• “sins of recent public policy past” got in way of us doing things that needed to get done
• Worries about wider new “divides between us”; have opportunity to close them
• Praises Hillary Clinton’s Internet freedom speech from last week
• Hard to conceptualize the changes that next 5-10 years hold in light of the developments of past 5-10
• Worried about open Internet; “unreasonable discrimination”… doesn’t want to allow “too much latitude” to private operators… says it is threat to “openness” (he never really defines the term, however)
• Passionate views on both sides of Net neutrality debate
• Need big pipes and more spectrum to grow capacity (I certainly agree on that one! But Net neutrality isn’t going to help us much in that regard)
• He fears consolidation
• Says minority and women voices are not getting heard online (he says we should measure it by audience measurements & ad $$ but doesn’t bothering mentioning how much wider the gap was in the old mass media era when none of those voices could get heard at all)
• How do we assure what we’re doing “actually works for democracy” and the “public interest” (but never defines what that means)
• Says media is failing us today; victims are public; investigative journalism is dying (but never discusses how current FCC regulation affects the equation)
• cites Founders (Jefferson, Madison) re importance of media … and then favorably cites McChesney & Nichols new book (ugh, someone needs to tell Commissioner Copps that McChesney is a neo-Marxist who wants to destroy all private media providers!)
Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.