At the “State of the Net” conference this morning, Alan Murray of The Wall Street Journal interviewed Brian Roberts, Chairman & CEO of Comcast. Here are some highlights. [You can follow all of my live Tweeting at: @AdamThierer]
- Stresses synergies from combination of Comcast cable channels & NBC broadcast properties (ex: Golf Channel & NBC Sports)
- Program access rules “should give fair amount of comfort” to critics who fear that content will be withheld
- “Businesses have to transform & reinvent themselves all the time” NBC part of that transformation for Comcast
- Internet is more friend than foe; broadband has transformed the business for the better
- Businesses grappling w/ ways to extend traditional services to consumers in new ways & still make $$$ (ex: TV Everywhere)
Can the Federal Communications Commission (FCC) just do anything it wants? If it wants to bring the entire Internet under its thumb, or regulate any speech uttered over electronic media, can it just do so on a whim? The agency’s recent actions on the Net neutrality and free speech fronts seems to suggest that the agency thinks so.
I don’t need to rehash here what the FCC has been up to on the Net neutrality front. Most everyone is familiar with how the agency has essentially been trying to invent its authority to regulate out of thin air. If you want the whole ugly history of how this charade has unfolded over past few years, I encourage you to read these amazing comments filed today in the FCC’s net neutrality NPRM proceeding by my PFF colleague Barbara Esbin. Barbara simply demolishes the FCC’s argument that it can do anything it wants under the guise of its “ancillary jurisdiction.” As Barbara argues in her comments, the FCC’s position “is akin to saying that the FCC can regulate if its actions are ancillary to its ancillary jurisdiction, and that is one ancillary too many.” She notes that:
The proposed rules regulating the services and network management practices of broadband Internet providers must rest, if at all, on the Commission‘s implied or ancillary jurisdiction and the NPRM fails to provide a basis upon which the exercise of such jurisdiction can be considered lawful.
She shows how farcical it is for the FCC to concoct its supposed authority to regulate from provisions of the Communications Act that have nothing whatsoever to do with Net neutrality or even expanding regulation in general. Specifically, the agency’s reliance on sections 230(b) and 706(a) of the Telecommunications Act of 1996 is completely outlandish. Anyone who knows a lick about telecom law and the nature of those two sections understands they were never intended to serve as the basis of an expansive new regulatory regime for the Internet. As Barbara puts it:
This exercise—searching for snippets and threads of regulatory authority over a communications medium as significant as the Internet in multiple, unrelated statutory provisions—should signal to the Commission that no credible source of authority to regulate Internet services exists.
All I have to say is, thank God for checks and balances. I believe the courts will put a stop to this nonsense, but it will take some time. Until then, I suppose the FCC will continue to act like a rogue agency, hell-bent and tossing the constitution to the wind and concocting asinine theories about why they should be allowed to do anything they want. But there
are signs that the courts are ready to start holding the FCC more accountable. 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 →
As 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.
Continue reading →
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.
Continue reading →
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 →
My PFF colleague Barbara Esbin has a great piece about why “FCC Could Mess Up Internet With ‘Net Neutrality’ Rules No One Needs” in a USNews point/counterpoint debate with Andrew Schwartzman of the Media Attack Access Project, who claims such rules “Would Keep the Web Free for Speech and Trade.” Here are her two best gems:
The FCC claims that broadband Internet markets are insufficiently competitive today to protect consumer interests. Yet a 2007 Federal Trade Commission report found no market failure and warned regulators to proceed with caution. The FCC acknowledges that broadband service providers face growing traffic volume demands that must be managed but claims that they have the potential—the opportunity, means, and motive—to act in an anticompetitive fashion when transporting Internet traffic across their networks. FCC detectives point to economic theory suggesting providers have incentives to act in an anticompetitive manner against competing providers of content, applications, or services. What is missing from this crime scene investigation is the body—the actual evidence that providers are behaving anticompetitively or are likely to.
And:
Lacking evidence that regulation is now necessary to combat either market failure or other consumer harms, the FCC is left to postulate a dystopian world without network neutrality rules. It claims that unless it acts now, we risk losing what we value most about the Internet. In other words, it creates what economists would call a “counterfactual.”
But we don’t need economic theory to tell us what a world without network neutrality rules would look like because we already live in that world. And in the real world, the fact is that the Internet ecosystem we have is functioning quite well to satisfy customer needs without the ministrations of the FCC. In fact, one might go so far as to say it functions as well as it does because of that.
Of course, regulatory advocates would insist that broadband providers
aren’t really behaving themselves today, citing a handful of vastly exaggerated examples. But they would probably fall back on the argument that broadband service providers are just waiting to start behaving even more anti-competitively until the threat of net neutrality regulation has been removed.
It’s certainly true that government disciplines markets as much by the threat of regulation as the actual exercise thereof,
but that’s especially true of antitrust laws: Even if we never see an antitrust suit brought against an ISP for anticompetitive behavior towards applications and content providers, antitrust laws would still play—indeed, have already played—a vital role in discouraging companies from engaging in the kind of behavior Andy Schwartzman worries about. That’s why PFF proposed relying on case-by-case antitrust enforcement rather than preemptive regulation with its 2005 DACA project.
Given the dangers of inviting further proscriptive government regulation of the Internet: “All we are saying, is give love antitrust a chance…”
It’s truly amazing how fast mobile broadband demand is expanding. A couple of things caught my eye yesterday that really drove that home. First, I was reading Bernstein Research’s weekly (subscription-only) newsletter and Craig Moffett, one of America’s top media and communications analysts, summarized the growing mobile bandwidth crunch as follows:
To fully grasp the challenge facing wireless providers as we make the transition from wireless voice to wireless data, it is helpful to put some ballpark numbers around current usage levels. Today, the average voice-only customer consumes something like 50 megabytes of data every month. For that, they pay about $40, or about $0.80 per megabyte. That’s 70% of wireless industry revenues. Text messaging generates another $10 per month for a minuscule amount of data (in fact, arguably no throughput at all, since text messaging travels in a signaling band rather than in the carrier band itself). Let’s call it $1,000 per megabyte. That’s another 15% of industry revenues. On a blended basis, then, that’s $1.00 per megabyte for 85% of industry revenues.
And then there’s the iPhone. By some estimates, the average iPhone user consumes as much as 800 megabytes per month. Take out their 50 Mb for voice and you’re looking at 750 Mb of data… for an additional $30. For the mathematically challenged, that’s a princely sum of… wait for it… four cents per megabyte. Worse, we noted that the FCC’s wireless net neutrality policies posed the risk of “bandwidth arbitrage,” where low bandwidth services (at $1.00 per megabyte) would be replaced with free or almost free applications that ride on $0.04 per megabyte data plans, and where carriers’ hands would be tied to prevent it. Taking a business that is currently getting $1.00 per megabyte down to just $0.04 per megabyte is, well, hard. And lest anyone think that this threat is idle fear-mongering, Google’s acquisition last week of Gizmo5, a wireless VoIP specialist, should give one pause.
Those are stunning numbers. And then I saw this new filing by CTIA listing some other statistics about growing mobile broadband demand:
Continue reading →
This morning, the Technology Committee of the New York City Council convened a large hearing on a resolution urging Congress to pass a robust Net Neutrality law. I was supposed to testify, but our narrowband transportation system prevented me from getting to New York. Here, however, is the testimony I prepared. It focuses on investment, innovation, and the impact Net Neutrality would have on both.
“Net Neutrality’s Impact on Internet Innovation” – by Bret Swanson – 11.20.09
The American Consumer Institute has released a collection of essays addressing the likely consequences of “‘Net Neutrality” regulation for investment in broadband and for consumer welfare. These are important things to consider, in case it needs saying.
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