Reason ran an article today about the ongoing Title II-based regulation of the Internet by the FCC. If you haven’t followed the issue, the FCC voted in February to reclassify broadband providers as common carriers under Title II of the Communications Act, a move which puts high technology companies on par with Ma Bell, circa 1950. Among other things, this accession to power grants the FCC the ability to regulate rates and the so-called “paid prioritization” of bandwidth.
The authors of the Reason article note the strange tension in allowing the FCC to solve a problem that, apparently, was founded on anti-competition grounds:
The usual answer [to the question of what Title II is needed] is that ISP competition is limited or non-existent … [b]ut if the underlying problem is an absence of competition, then antitrust laws—or even adjudication of alleged net neutrality violations on a case-by-case basis, assessing actual effects after the fact—would be sufficient.
Throughout all of the breathless warnings of anti-competitive behavior by Title II proponents, I was constantly left wondering why this was an FCC issue. Why is this not an antitrust issue, before the FTC, or subject to, for instance, a civil case based on interference with contract. I am certain that megacorporation A (Netflix) has plenty of funds to defend its contractual relationship with its consumers against megacorporation B (Comcast), who might otherwise discriminate against high-bandwidth content. Don’t get me wrong, I love “House Of Cards,” but my loyalty to Netflix ends at my appreciation for their content. It is up to Netflix to figure out with the other giant corporations with which it works how to deliver Frank Underwood to my screen.
More pointedly, the authors note that…
after poring over hundreds of thousands of pages of comments in the public record, the FCC in its 2010 Open Internet Order could identify just four actions in the history of the Internet that might have been prevented by such rules. Even these four are questionable, and all of them were resolved without the heavy hand of net neutrality.
Thus the proponents of Title II regulation have essentially, in the wise words of Richard Epstein, created a solution in search of a problem. Further, the whole Title II debate missed an enormous amount of subtlety.
In a network composed of limited resources there must obviously be mechanisms for packet shaping — for delivering certain kinds of content on demand, and for demoting other kinds of content. For instance, providers of real-time medical information services obviously require and deserve prioritization and should be entitled to seek relationships with network providers that guarantee that level of service. If Netflix wants to make sure my hi-def video plays with nary a hiccup nor lag, then let it make a deal with the network providers, and then give me the option to opt for better quality through their service.
However, all the details about how to actually manage the network are pretty boring. Yet, Title II proponents have somehow taken an essentially dry and boring subject such as how to design responsive networks and turned it into an issue of fundamental justice.
Generally speaking, neutrality advocates don’t spend much time in the weeds of boring traffic-flow engineering and network prioritization. What has animated everyone from HBO comedian/anchor John Oliver to millions of irate FCC commenters has been an angry suspicion that somewhere, some rich corporations are on the verge of hijacking the Internet’s architecture to profit themselves while excluding others.
What has bothered me most in the whole debate is the underlying faith that Title II proponents place in a small group of experts to understand something as vast and complex as the Internet. Presuming that there are anti-competitive monopolies that destroy consumer choice in content, proponents of Title II regulation presume that the FCC somehow will be able to properly differentiate between all of the innovative possibilities for traffic shaping that providers can dream up.
This is, at root, a fatal conceit. In fact, the only way to actually manage something so large and naturally unruly as the Internet will be to bring it to heel. The FCC must normalize transactions across the network, and overall mandate an environment that provides less choice and opportunity for innovation. That would be truly neutral.
Further, given that the incidents of harm are so low, that such incidents have only potentially harmed relatively rich companies, and that the real crux of the arguments offered more properly sound in anti-competition actions, I am inclined to view the Title II reclassification cynically. Frankly, it seems like a naked power grab. Our own John Walker opined along these lines in the comments section to a post.
Throughout the ’80s and ’90s, the Internet exploded out of military and academic setting with great speed and essentially under the radar of regulators. It did not step on the toes of the Keepers of the Public Spectrum (i.e., the FCC) because it did not threaten to consume a naturally limited bandwidth (i.e., the radio spectrum). Thus, it is not obviously something that should be subject to FCC oversight. I echo John when he wrote:
“My cynical (but I fear accurate) view is that “network neutrality” is a cleverly-crafted way to accomplish [a power grab for regulators]. It promises worthy goals such as charging all Internet users the same price to send the same volume of data across the network, and preventing Internet operators from privileging content providers who pay them for better access to their customers. (I support both of these goals.) But look behind the curtain and what you see is the FCC getting its hands upon the content of the Internet, with the same power to regulate, tilt the playing field, impede innovation (“No, we can’t route your new immersive virtual reality packets until we decide what impact it will have on other traffic. Perhaps in five years we will have completed our study.”) as has happened in all other areas they regulate.”
Let’s hope that the courts that review the Title II reclassification challenges can see the man behind the curtain (Chairman Tom Wheeler, I am looking at you).