September 15, 2014

FCC Open Internet Reply Comments

Key materials
Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Designating Internet service providers (ISPs) as telecommunications providers and common carriers subject to Title II regulations contradicts the stated intention of Congress:

It is the policy of the United States . . . to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.1

The Federal Communications Commission (FCC) should tread cautiously as it considers once again bringing ISPs and parts of the Internet under greater regulatory scrutiny. The regulatory zeal and mixed messages displayed by net neutrality supporters is alarming considering the stakes and should signal to the FCC that regulatory humility is called for.

This reply comment argues that imposing regulatory burdens on ISPs and Internet companies would likely harm consumers and competition. Bringing ISPs under Title II’s obligations would also be legally unsound. First, as commenters point out, the Internet functions very differently from telephone networks and common carriers. This has legal import and it is uncertain, to say the least, that the FCC could reinterpret the law, “reclassify” broadband provision as “telecommunications,” and have that designation upheld by a court. Second, years of carrier experimentation with priority traffic reveal that the “virtuous cycle” of online innovation is not harmed when ISPs engage in nonneutral behavior. That open Internet supporters cannot agree on whether and in what manner non-neutral behavior should be allowed reveals the ambiguity around priority treatment of broadband traffic. Because priority treatment tends to be used by smaller carriers serving consumers with idiosyncratic needs, regulators should permit nonneutral behavior except when it is anticompetitive or harming consumer welfare. Finally, Title II has several undesirable ancillary effects, including tacitly sending an encouraging message to illiberal foreign governments about Internet regulation.

DISCUSSION

Though an effective rallying cry, there is no consensus about what “net neutrality” or the “open Internet” means when it comes to putting rules on paper. Professor Barbara van Schewick has said, “If there is no rule against blocking in a proposal, it’s not a network neutrality proposal. That’s the one defining factor that holds all net neutrality proposals together.”2 That limitation—a no-blocking provision—is supported by nearly every commenter in this proceeding, including the ISPs. Agreement on what else neutrality requires is difficult to ascertain. Commenters’ demands for regulatory action under Title II of the Communications Act are many and often mutually exclusive, rendering the campaign spurring the FCC to act nearly incomprehensible. The motivating factor is not the legality and efficacy of Title II rules but a general sense of grievance towards ISPs. It should trouble the commission that there is no agreement on even basic facts about what the FCC should attempt to accomplish. Net neutrality proponents admit in this proceeding that while the open Internet debate originally focused on blocking and discrimination on the “last mile” connection between an ISP and its customer, “it has since evolved into a number of sub-debates,”3 including interconnection, content delivery networks, data limitations, zero-rated applications, and even whether search algorithms need to be neutral. Those sub-debates themselves reveal disagreements in the general net neutrality community.

Commenters favoring “strong” net neutrality—like Free Press and Netflix—unconvincingly assert that common carrier regulation is deregulatory.4 This view is undermined, ironically, by the very commenters whipped into a frenzy by these net neutrality proponents. As one representative commenter says, “I support a Title II approach— we need more regulation.”5

Similarly, while Title II supporter Public Knowledge distances itself from designating broadband a public utility,6 Popular Resistance, ColorOfChange.org,7 and literally tens of thousands of commenters characterize net neutrality as making the Internet a “public utility regulated in the public interest without discrimination.”8

The FCC has confronted similar grievances before. Many parties bemoaned the purported loss of the “end-to-end” principle in the late 1990s and the FCC’s choice a few years later to decline to impose open access on cable modems.9 Advocates wanted ISPs treated as Title II common carriers then. Many of their predictions about cable investment and broadband innovation proved incorrect,10 and the FCC should be skeptical of their repackaged arguments today.

Continue reading