Tech Policy Offers Republicans Best Opportunity to Lead
WASHINGTON D.C. — Celebrating yesterday’s Republican victories, presumptive Senate Majority Leader Mitch McConnell declared, "Just because we have a two-party system doesn't mean we have to be in perpetual conflict." TechFreedom President Berin Szoka offered the following comment on what Republican victories might mean for tech policy:
Republicans won in deep-blue states like Maryland by promising the kind of post-partisan compromise that President Obama ran on back in 2008. Tech policy is the obvious area for the party to look for winning issues where consensus can be reached and where the GOP will actually get attention for doing so.
The real test will be how Republicans handle net neutrality, especially if the FCC applies Title II’s 1930s-era monopoly regulations to the Internet — breaking with Clinton’s “Hands off the Net” approach. The New Democrats of the 1990s opposed Title II and so did 74 House Democrats when the FCC floated the idea in 2010. Rebuilding that coalition against Title II will require a compromise that finally ends the decade-long debate over the FCC’s authority. It was no less a Republican stalwart than Jim Demint who introduced a compromise bill developed by a bipartisan group of telecom scholars back in 2005.
The Digital Age Communications Act (DACA) would give the FCC the broad authority it has long sought to police all forms of Internet traffic — but constrain that authority by requiring the FCC to prove that regulation would actually make consumers better off. DACA could be combined with the net neutrality rules proposed by the FCC in a deal that prevents the FCC from using either Title II or Section 706 to regulate the Internet. Add in pro-deployment reforms that remove remaining regulatory barriers, and Republicans could finally shift the net neutrality conversation from regulation to competition. In short, Republicans could claim both victory and pragmatism on the issue that has bitterly divided the tech world for nearly a decade.
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TechFreedom and ICLE Urge FCC to Maintain Bipartisan Consensus Against Title II
In reply comments on the FCC’s proposed Internet rules, TechFreedom and the International Center for Law and Economics (ICLE) urged the Commission to not impose common carrier regulations on the Internet through Title II of the 1996 Telecommunications Act. The comments debunk three key myths about Title II and call for the FCC to base any new rules it issues under Section 706 of the Act. The organizations also urge the FCC to ask Congress to provide clearer, narrower legislative authority over Net Neutrality, and call for a multistakeholder process to address the issue, regardless of what the FCC or Congress does.
The filing echoes the sentiments of a diverse coalition of web entrepreneurs, investors, telecom and antitrust experts, and policy organizations who wrote yesterday to FCC Chairman Tom Wheeler urging him to not invoke Title II.
“Title II is a wolf in sheep’s clothing,” said Berin Szoka, President of TechFreedom. “A radical fringe has dressed up a government takeover of the Internet as ‘Net Neutrality.’ Google, Facebook, and the NAACP haven’t jumped on the Title II bandwagon, because they know better. Imposing public utility regulations on the Internet won’t create Net Neutrality, but the heavy hand of government will crush innovation and investment in broadband.”
“If the FCC wants to enforce Net Neutrality, it should, for now, use the broad powers it has granted itself under Section 706 of the ‘96 Telecom Act, said Geoffrey Manne, Executive Director of the International Center for Law and Economics. “Subjecting broadband to Title II would not even allow the FCC to do the one thing that most Net Neutrality supporters want: banning ‘paid prioritization.’ On the contrary, ‘reclassifying’ broadband under Title II would require the FCC not merely to authorize paid prioritization, but to set tariffed prices for it!”
A bipartisan consensus has long held that the ‘96 Act is woefully outdated, and today’s regulatory uncertainty could easily be cleared up with new legislation. “The single most remarkable fact about the decade-long debate over Net Neutrality is that the FCC has never formally requested specific legislative authority,” continued Szoka. “With a stroke of the President’s pen, the endless battle over the FCC’s authority in this area could end. Congress must establish clear authority for the FCC on Net Neutrality, so that companies have the regulatory clarity needed to invest and innovate. But even without legislation, the FCC could bring telcos, content providers, and the public to the table for a multistakeholder process to hash out these issues. The multistakeholder process, championed by the White House as the best model for Internet governance, remains the road not taken on Net Neutrality.”
Visit DontBreakThe.Net to read about or join our campaign against Title II. The website directs comments to the FCC and debunks several myths about the benefits of a government takeover of the Internet.
Find/share this release on Facebook or Twitter, and see TechFreedom and ICLE’s other work on Title II and Net Neutrality, especially:
“Net Neutrality's hollow promise to startups,” an op-ed by Geoffrey Manne and Berin Szoka in Computerworld
TechFreedom and ICLE’s legal and policy comments to the FCC on Net Neutrality (and highlights of both)
“Understanding Net(flix) Neutrality,” an op-ed by Geoffrey Manne in the Detroit News on Netflix’s strategy to confuse interconnection costs with neutrality issues
“The Feds Lost on Net Neutrality, But Won Control of the Internet,” an op-ed by Berin Szoka and Geoffrey Manne in Wired.com
“Dear Chairman Wheeler, Don’t Break The Net!”, TechFreedom statement on launch of DontBreakThe.Net
“That startup investors’ letter on Net Neutrality is a revealing look at what the debate is really about,” a post by Geoffrey Manne in Truth on the Market
“Bipartisan Consensus: Rewrite of ‘96 Telecom Act is Long Overdue,” a post on TF’s blog highlighting the key points from TechFreedom and ICLE’s joint comments on updating the Communications Act
The FCC’s Section 706 Power Grab is Dangerous, and Ignores Marketplace Realities
On Friday, TechFreedom filed comments on the FCC’s annual inquiry into whether broadband is being deployed in a “reasonable and timely” fashion under Section 706(b) of the 1996 Telecommunications Act. The Notice of Inquiry seeks comment on how concerns about privacy and cybersecurity may slow broadband adoption, thus signalling that the FCC may expand its use of Section 706 beyond net neutrality to reach edge providers as well, despite having no specific statutory authority to do so.
“A chill wind blows through Silicon Valley from the East,” warned Berin Szoka, President of TechFreedom. “In 2010, after the courts first said the FCC didn’t have authority to regulate net neutrality, the FCC announced that, upon re-reading the Act, it had found in Section 706 a blank check for regulating the entire Internet, which the Commission had somehow previously failed to notice. This Notice reminds America’s tech sector that net neutrality may only be the beginning, and that the FCC may be coming for them next.”
The Commission’s reinterpretation of Section 706 would authorize regulation not merely over broadband providers but also Google, Twitter, Facebook and the countless startups building new apps and services.
“The Inquiry doesn’t just signal that a regulatory winter is coming,” continued Szoka. “It will inevitably have a quasi-regulatory effect, especially over small companies, who must now begin worrying that the next shoe could drop at any moment. Under the FCC’s preposterous re-interpretation of Section 706, the FCC apparently would not be required to engage in formal rulemakings, but could bring enforcement actions against practices it deems to raise concerns that discourage broadband adoption and thus slow broadband deployment. This will chill entrepreneurs and investors trying to deliver sites, apps and services.”
“The FCC can’t put the 706 genie back in the bottle, but it can ask Congress for clear legislative authority over net neutrality and appropriately narrow power to remove barriers to broadband deployment,” concluded Szoka. “Those urging the FCC to invoke Title II because of the dangers of Section 706 miss the point: grounding new net neutrality rules in Title II will not stop the FCC from using Section 706 to regulate privacy, cybersecurity, copyright, indecency or anything else the FCC asserts relates to broadband deployment. Reclassification would simply give the FCC a second source of broad power.”
The FCC’s Notice of Inquiry also proposes to raise the minimum speed threshold, which would allow the FCC to pooh-pooh progress on broadband deployment and thus make it easier for the FCC to justify using its purported powers under Section 706. “The FCC’s regulatory agenda has blinded it to the enormous progress made in broadband deployment,” said Tom Struble, Legal Fellow at TechFreedom, citing massive increases in both wireline and wireless broadband since 2010.
“Those urging the FCC to manipulate the data to justify regulation of broadband today may find the FCC using the same outcome-driven methodology against them tomorrow. Rather than inventing arbitrary baselines on how Americans ought to use broadband, the FCC should focus on assessing actual broadband usage patterns and objective measures of investment and competition,” concluded Struble.
The Smart, Bipartisan Way to Address Interconnection Concerns
TechFreedom and the International Center for Law and Economics (ICLE) submitted comments Friday in response to the House Energy and Commerce Committee’s fourth white paper, which asks what authority the FCC should have to regulate the interconnection among broadband providers, transit providers, and edge providers — an issue that Netflix has successfully conflated with net neutrality (i.e., what happens within a broadband network). The two think tanks called on Congress to address interconnection through the economics of consumer welfare as part of a larger rewrite of the 1996 Telecommunications Act.
In 2005, a diverse, bipartisan group of telecom experts issued a compromise proposal for rewriting the 1996 Act to make the FCC work more like the Federal Trade Commission. Under the proposed Digital Age Communications Act (DACA), the FCC would have to show that a company had abused market power to harm consumers and, unlike antitrust law, could issue prophylactic regulations on that basis. But for interconnection, the FCC would have to show only that practices pose a substantial and non-transitory risk to consumer welfare.
“DACA remains the right way to address interconnection,” said Berin Szoka, president of TechFreedom. “If a failure to interconnect actually did harm consumers, DACA would give the FCC ample authority to address it. But otherwise, the FCC would maintain the hands-off-the-net approach championed by President Clinton and his FCC chairman, Bill Kennard.”
“Netflix has added little to the debate over interconnection except confusion,” argued Manne. “Netflix has attempted to get for free something it has always had to pay for: the capacity necessary to carry its streaming traffic, now one third of all peak U.S. traffic. Comcast, Verizon and other companies have offered Netflix a cheaper option than paying for transit, yet Netflix is still trying to pass ‘net capacity’ costs onto broadband companies, which means to all broadband consumers — even those who don’t use Netflix.”
“Netflix has led the push to impose Title II common carrier regulation, but Title II still wouldn’t get Netflix what it wants: free interconnection,” concluded Szoka. “Title II’s interconnection provisions apply only to negotiations between telecommunications services. So unless Netflix is proposing that all content companies be subject to 19th century common carriage regulations, which would be a disaster for everyone, Title II won’t even apply to interconnection disputes. And if it did, it’s not clear the FCC can, as a legal matter, order free interconnection anyway.”
Read the full comments here. Find/share this release on Facebook or Twitter, and see our other work on Net Neutrality, the FCC, and a #CommActUpdate, especially:
“Bipartisan Consensus: Rewrite of ‘96 Telecom Act is Long Overdue,” Berin Szoka
“Congress, not FCC, should Decide Future of Internet Regulation,” Berin Szoka & Geoffrey Manne
“Debunking Netflix’s attempt to rebrand interconnection negotiations as ‘Net neutrality,’” Berin Szoka
“Understanding Net(flix) Neutrality,” Geoffrey Manne, The Detroit News
“Killing Net Neutrality Helps Underdogs Succeed,” Berin Szoka, Wired
Highlights from Net Neutrality Comments Filed by TechFreedom and ICLE
On Friday, TechFreedom and the International Center for Law & Economics (ICLE) filed joint comments with the FCC, explaining why the FCC has no sound legal basis for micromanaging the Internet and why “net neutrality” regulation would actually prove harmful for consumers. Below are some of the highlights from the filing, the longest filed.
The following quotes are from the joint filings:
Proposed regulations would outlaw innovative business models, harming consumers.
“A truly open Internet would preserve for all players the right to experiment with innovative content delivery methods and business models.”
“It isn’t hard to imagine myriad business models that could be prohibited under a pure net neutrality framework.”
“The [economics] literature directly contradicts the assumption that neutrality improves consumer welfare or encourages infrastructure investment. In fact, the opposite appears to be true, and non-neutrality actually generally benefits both content providers as well as consumers.”
Startups and small businesses could benefit from non-neutrality.
“Startup content providers are at least as likely to benefit from a non-neutral net as to be hurt by it.”
“Non-neutrality offers the prospect that a startup might be able to buy priority access to overcome the inherent disadvantage of newness, and to better compete with an established company.”
“Bob Loblaw’s Law Blog may seem to be at the mercy of its Internet provider, standing on its own. But if it uses WordPress’s platform it doesn’t actually stand on its own. The same is true for independent artists plying their music or videos on the web. It isn’t Adele vs. Comcast; it’s YouTube vs. Comcast. “
Title II would be a disaster — without actually doing what regulatory advocates want.
“So-called ‘reclassification’ would not even accomplish what those advocating for Title II demand: a ban on prioritization.”
“There is no bright line by which the FCC can limit the effects of ‘reclassification’ to the last-mile ISP connections in particular or even to broadband more generally.”
“It will be difficult for the Commission to reject efforts by complainants and policy advocates to expand the reach of the NPRM’s logic to an ever-expanding range of companies and relationships, bringing a wider range of pro-consumer practices under scrutiny and threat.”
“The the key to promoting more competition lies in removing remaining barriers to entry at the federal and state level, not returning to monopoly-era regulation.”
Re-interpreting “telecommunications” would likely fail in court.
“It simply is not clear that the FCC can impose Title II common carrier status on broadband carriers that have either always, or long, been regulated under Title I -- no matter how well the FCC explains this change of interpretation.”
Forbearance is an empty promise that the FCC can’t keep.
“Promising to clean up the mess through forbearance is, essentially, an empty promise, on which the FCC simply cannot deliver — and certainly not in a timely fashion. Those pushing the Commission to “reclassify and forbear” are either insincere about forbearance or are simply misinformed about what forbearance would require.”
“The FCC is not proposing simply to chip away at the margins of the Title II regime, but to adopt it wholesale — and then undo most of it. The more the FCC tries to rush the process of building a record to justify its case, the more likely it is to lose in court and have to start over.”
"Assuming the FCC does have the discretion to make forbearance much easier, as a legal matter, will it actually be willing to lower the bar for forbearance going forward, knowing that a more deregulatory-minded FCC could, in the future, use forbearance to effectively gut the entire Communications Act?”
“The prospect of easy unforbearance means that forbearance decisions will be, at best, temporary reprieves. -- hardly a sound basis for continued broadband investment.”
Section 706 creates a duty to promote broadband, not a power to invent a new regulatory framework.
“By re-interpreting Section 706 as an independent grant of authority, the FCC has opened the Pandora’s Box of broader Internet regulation.... Reclassifying broadband under Title II … will in no way solve that problem. “
“Far from being the vast grant of discretion the FCC now claims, the FCC had, until 2010, always understood Section 706 to be what any reasonable lay person reading the text would have understood Congress to have meant: a command to the FCC to promote broadband deployment and investment: a duty, not a power.”
New regulation would raise constitutional problems not yet addressed in court.
“Net neutrality regulation compels broadband providers, who are speakers with First Amendment rights of their own, to carry the speech of others.”
“Net neutrality regulation, as proposed by the FCC, violates the Fifth Amendment’s prohibition on takings without just compensation...It’s difficult to imagine a larger, more draconian regulatory taking than imposing Title II on broadband.”
The FCC should ask Congress to update the Communications Act.
“There is no shame in the FCC admitting it does not have a sound legal basis for regulating net neutrality. Indeed, the first duty of every regulatory agency is not to push the boundaries of the agency’s authority in increasingly creative ways, but to defer to Congress and await clear instructions.”
“Given the FCC’s stubborn insistence that it has all the legal authority, despite losing twice at the D.C. Circuit, what possible incentive could there be for Congress to take this issue seriously? It is hardly surprising Congress has not invested the time and effort required to forge a legislative compromise.”
Read the legal comments here and policy comments here. Find/share this release on Facebook or Twitter, and see TechFreedom and ICLE’s other work on Net Neutrality, especially:
“Understanding Net(flix) Neutrality,” an op-ed by Geoffrey Manne in the Detroit News on Netflix’s strategy to confuse interconnection costs with neutrality issues
“The Feds Lost on Net Neutrality, But Won Control of the Internet,” an op-ed by Berin Szoka and Geoffrey Manne in Wired.com
“That startup investors’ letter on net neutrality is a revealing look at what the debate is really about,” a post by Geoffrey Manne in Truth on the Market
“Bipartisan Consensus: Rewrite of ‘96 Telecom Act is Long Overdue,” a post on TF’s blog highlighting the key points from TechFreedom and ICLE’s joint comments on updating the Communications Act
About TechFreedom:
TechFreedom is a non-profit, non-partisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.
About The International Center for Law and Economics:
The International Center for Law and Economics is a non-profit, non-partisan research center aimed at fostering rigorous policy analysis and evidence-based regulation.
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TechFreedom and ICLE File Joint Comments to FCC in Defense of a Free Internet
Today, TechFreedom and the International Center for Law & Economics (ICLE) filed joint policy and legal comments with the FCC, explaining why the FCC has no sound legal basis for micromanaging the Internet and why “net neutrality” regulation would actually prove counter-productive for consumers.
New regulation is unnecessary. “An open Internet and the idea that companies can make special deals for faster access are not mutually exclusive,” said Geoffrey Manne, Executive Director of ICLE. “If the Internet really is ‘open,’ shouldn’t all companies be free to experiment with new technologies, business models and partnerships?”
“The media frenzy around this issue assumes that no one, apart from broadband companies, could possibly question the need for more regulation,” said Berin Szoka, President of TechFreedom. “In fact, increased regulation of the Internet will incite endless litigation, which will slow both investment and innovation, thus harming consumers and edge providers.”
Section 706 is not a viable option. In 2010, the FCC claimed Section 706 as an independent grant of authority to regulate any form of "communications" not directly barred by the Act, provided only that the Commission assert that regulation would somehow promote broadband. “This is an absurd interpretation,” said Szoka. “This could allow the FCC to essentially invent a new Communications Act as it goes, regulating not just broadband, but edge companies like Google and Facebook, too, and not just neutrality but copyright, cybersecurity and more. The courts will eventually strike down this theory.”
A better approach. “The best policy would be to maintain the ‘Hands off the Net’ approach that has otherwise prevailed for 20 years,” said Manne. “That means a general presumption that innovative business models and other forms of ‘prioritization’ are legal. Innovation could thrive, and regulators could still keep a watchful eye, intervening only where there is clear evidence of actual harm, not just abstract fears.”
“If the FCC thinks it can justify regulating the Internet, it should ask Congress to grant such authority through legislation,” added Szoka. “A new communications act is long overdue anyway. The FCC could also convene a multistakeholder process to produce a code enforceable by the Federal Trade Commission,” he continued, noting that the White House has endorsed such processes for setting Internet policy in general.
Manne concluded: “The FCC should focus on doing what Section 706 actually commands: clearing barriers to broadband deployment. Unleashing more investment and competition, not writing more regulation, is the best way to keep the Internet open, innovative and free.”
Read the legal comments here and policy comments here. Find/share this release on Facebook or Twitter, and see TechFreedom and ICLE’s other work on Net Neutrality, especially:
“Understanding Net(flix) Neutrality,” an op-ed by Geoffrey Manne in the Detroit News on Netflix’s strategy to confuse interconnection costs with neutrality issues
“The Feds Lost on Net Neutrality, But Won Control of the Internet,” an op-ed by Berin Szoka and Geoffrey Manne in Wired.com
“That startup investors’ letter on net neutrality is a revealing look at what the debate is really about,” a post by Geoffrey Manne in Truth on the Market
“Bipartisan Consensus: Rewrite of ‘96 Telecom Act is Long Overdue,” a post on TF’s blog highlighting the key points from TechFreedom and ICLE’s joint comments on updating the Communications Act
About TechFreedom:
TechFreedom is a non-profit, non-partisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.
About The International Center for Law and Economics:
The International Center for Law and Economics is a non-profit, non-partisan research center aimed at fostering rigorous policy analysis and evidence-based regulation.
Democrats Tell FCC Not to Regulate Broadband as a Utility — back in 1998
Today, some Democrats are urging the FCC to regulate broadband as a public utility. But back in 1998, Democratic Senators John Kerry and Ron Wyden joined three Republican Senators to tell the FCC the exact opposite:
The overarching policy goal of the 1996 Act is to promote a market-driven, robustly competitive environment for all communications services. Given that, we wish to make it clear that nothing in the 1996 Act or its legislative history suggests that Congress intended to alter the current classification of Internet and other information services or to expand traditional telephone regulation to new and advanced services…. Moreover were the FCC to reverse its prior conclusions and suddenly subject some or all information service providers to telephone regulation, it seriously would chill the growth and development of advanced services to the detriment of our economic and educational well-being.
It’s worth noting that 74 House Democrats opposed Title II when the FCC proposed it in 2010. These are just a few examples of two decades of bipartisan consensus around a few simple ideas:
Hands off the Net: the less we regulate the Internet, at all levels, the better
Communications regulation should focus on effects, not static silos of service
Government should get out of the way of competition and investment
Fred Campbell has more on why Congress never intended to apply public utility regulations to the Internet in the 1996 Act. Also check out our recent comments on why it’s time to do what Clinton and Gore proposed twenty years ago, and what smart, pro-tech Republicans and Democrats have been trying to do ever since: write a communications act for the digital age.
Bipartisan Consensus: Rewrite of '96 Telecom Act is Long Overdue
The Telecommunications Act of 1996 has been outdated since the moment it was signed into law. A rewrite is long overdue, and there has been a bipartisan consensus on this point for nearly twenty years. Yet, two decades after Clinton and Gore called for a technologically neutral communications act, we are still watching the FCC struggle to apply the 1996 Act in a world that looks nothing like its basic assumptions, and where voice, video and information have become applications delivered over radically different platforms.
Today, TechFreedom and the International Center for Law and Economics (ICLE) submitted comments in response to the House Energy and Commerce Committee’s third white paper in its examination of how communications law can be rationalized to address the 21st century communications landscape. The organizations’ experts call on Congress to rewrite the 1996 Telecommunications Act and reassert its authority over the FCC. Key points:
Content/app providers have enjoyed a flourish of innovation in the Internet age, yet broadband and infrastructure remain hamstrung by the 1996 Act. This regulatory framework wrongly assumes that infrastructure monopolies threaten competition in the content/app market, and that network competition is hopeless and impossible. The Act’s myopic focus on content has stifled innovation and competition among infrastructure providers and ISPs.
The FCC’s proposal to reclassify broadband as a public utility is not only impractical, but also a blatant attempt to rewrite the 1996 Act without congressional authority. This kind of legislating is something only Congress, the people’s elected representatives, can do. A rewrite of the 1996 Act is already occurring — except it is being done by the FCC, informally, with no clear limits on its discretion, and with little analytical rigor. The uncertainty created by this dynamic is already discouraging investment, and arbitrary reclassification of broadband would only exacerbate this problem. Congress must step into the void.
There is a fairly simple solution to the problem of anti-competitiveness in broadband, and it derives from a consensus forged in 2005 by a politically diverse group of academics and tech policy experts: The FCC should focus on advancing consumer welfare by rigorously assessing costs and benefits, including the negative costs of over-regulating. This approach allows innovation, technological development and changes in consumer preferences to guide conduct, intervening only where actual competitive harms develop.
