Last week, Sen. Ed Markey (D-MA) and others headlined a press conference (0) organized by several progressive groups, which focused on anticipated changes that the Federal Communications Commission (FCC) may make to its Open Internet rules. The event appeared designed to serve notice that supporters of former FCC Chairman Tom Wheeler’s Title II reclassification approach will (loudly) oppose any efforts at regulatory reform. Unfortunately, in the wake of that press conference, several misconceptions about the issue are circulating, as one might expect when nuanced policy debates are reduced to 140-character-or-less sound bites. This blog post is a first stab at dispelling the most problematic issues.
The Open Internet Order is not a First Amendment issue
Sen. Patrick Leahy (D-VT), Sen. Richard Blumenthal (1) (D-CT), and Public Knowledge President Gene Kimmelman all suggested (2) that the Open Internet Order is a First Amendment issue. It is not. The First Amendment prevents the government from infringing on freedom of speech. The FCC’s Open Internet rules are not designed to curb government limits on speech, so the First Amendment rights of speakers are simply not implicated.
Nor do the rules regulate end users’ ability to speak over the internet. Only two portions of the rules implicate the relationship between internet service providers (ISPs) and consumers: the transparency rules (which require ISPs to disclose their network management practices to consumers) and the unreasonableness standard (which prohibits ISPs from unreasonably interfering with or disadvantaging consumers’ ability to access content and applications). The bulk of the order focuses instead on managing business relationships between ISPs and edge providers such as Google, Amazon, and Netflix — which are among the world’s largest corporations and can more than hold their own in negotiations with ISPs over terms of access.
Repealing Title II reclassification is not the same as eliminating the Open Internet
Although FCC Chairman Ajit Pai opposed the current net neutrality rules, he has not publicly committed to repealing them now that he is in the driver’s seat. So far, he has said only (3) that “I favor a free and open Internet and I oppose Title II.” By “Title II” he means Wheeler’s party-line decision to reclassify broadband providers, which subjected them to a panoply of common carrier regulations originally designed to discipline the Bell Telephone monopoly during the Great Depression. Reclassification was unnecessary for the FCC to protect an Open Internet and has raised numerous ancillary consequences that the agency may not have anticipated (such as stripping the Federal Trade Commission of authority to regulate broadband providers’ data privacy practices).
Pai has previously voiced his support for former FCC Chairman Michael Powell’s “four freedoms.” These stem largely from a 2005 FCC policy statement (4), which provided that consumers shall have the freedom to access legal content of their choice, use applications of their choice, attach devices of their choice to the network, and that they are entitled to competition among network providers, application and service providers, and content providers.
A return to this foundational document would help reframe the Open Internet debate in two important ways:
- Focus on consumers, not edge providers.Powell’s four freedoms rightly emphasized the need to protect consumers. But somehow, on the path to the Open Internet rules, the FCC shifted its focus from consumers to edge providers. In his congratulatory message to the FCC (5), President Obama emphasized that the Open Internet Order would protect the “next generation of entrepreneurs” such as the “next Google and the next Facebook.” While some believe what’s good for Netflix is good for consumers, this is not necessarily the case.
- Focus on competition throughout the internet ecosystem.By emphasizing competition among network providers and edge providers alike, the four freedoms emphasized the need to focus on all players in the internet ecosystem, rather than singling out ISPs for special treatment vis-à-vis other internet-based companies. Competition should be the touchstone for regulatory intervention: If a company is abusing market power in an anticompetitive fashion, the agency can and should intervene. But it should not intervene merely because a sector of the internet economy does not behave precisely as the agency thinks it should.
The Open Internet Order does not protect against higher prices
Kimmelman similarly suggested (6) that reforming the Open Internet Order was “only going to drive up prices.” But the Open Internet Order itself foreswears any effort to regulate consumer prices. In fact, one could argue that Kimmelman has it exactly backward. By banning paid prioritization, the rules eliminate a potential revenue stream that ISPs might otherwise receive from edge providers. This limits ISPs’ ability to cover their network costs from other revenue sources, and instead puts the costs on the backs of consumers. Every dollar an ISP cannot collect from Netflix is another dollar it must collect from you and me, its end users.
The ultimate answer lies with Congress
Much of the controversy in this space stems from the fact that the FCC’s operative statute, the Communications Act, was written in 1934 and last updated in 1996, when dial-up internet was just getting started. If Markey and the other legislators at the press conference are serious about reform, they should join the ongoing efforts in Congress to reform the Communications Act to reflect 21st-century communications networks. This would take a holistic approach to the issue, clarifying the FCC’s authority over broadband providers and other players in the internet ecosystem and give the agency clear marching orders, rather than forcing it to fit the square peg of the internet into the round statutory holes of law written to govern the telephone network.