Friday, July 03
Last week, we held a discussion in Washington DC on how regulators can help — rather than hinder — the broadband economy. The featured speaker at this event was FCC Commissioner Mike O’Rielly, who delivered his vision for how the FCC and other regulatory bodies should fulfill their vital role in the face of the fast-moving technology. An excerpt from Commission O’Rielly’s speech:
As regulators consider proposals that would impact the Internet or the deployment of broadband, thoughtful analysis should be done prior to enactment to consider whether the costs and burdens imposed are greater than the benefits of acting. Given the amazing positives to be gained from an Internet free and open from government intrusion — or at least significant government intervention — there should be a universal requirement for quantifiable data under a cost-benefit analysis regime. It seems universally accepted that there are direct and indirect costs to every burden placed on Internet activities. It should be our duty to show the detailed costs and benefits of every proposal, not hypothetical claims that give short shrift to statutory requirements to do an actual analysis. If a regulator involved in some capacity with the Internet cannot accept this basic premise, maybe they are in the wrong line of work.
Let me also take a moment to provide a few other premises that most people who operate in this space accept: Internet-related taxes depress deployment and adoption; costs of regulations are ultimately passed onto consumers; and the structure of the Internet will produce some type of reaction to undermine any imposed regulation. If these premises are accepted, and they have proven to betrue time and time again, it means that regulators need to be extremely cautious in acting or risk decreasing deployment, or raising prices — and all for naught.
You can read Commissioner O’Rielly’s full remarks — and watch a video of the event, which also featured Stuart N. Brotman of the Brookings Institution, James Reid from TIA, Susan Bitter Smith of the Arizona Corporation Commission, and our own Bruce Mehlman — by clicking here.
Thursday, June 11
Earlier today, IIA sent a letter to FCC Chairman Tom Wheeler expressing our support for the Commission’s upcoming rulemaking proceeding soon to be initiated to advance Lifeline reform. From that letter, signed by IIA Chairmen Rick Boucher, Bruce Mehlman, Larry Irving, and Jamal Simmons:
“In the U.S., consumers with economic means have nearly ubiquitous access to broadband, yet almost two-thirds of our nation’s low-income community continues to seek that similar opportunity. Without broadband availability, low-income families face an uphill battle in obtaining the American dream.
“In bringing Lifeline into the 21st century, broadband should be included as an integral, more affordable offering of the program, and consumers should be empowered by providing the subsidy directly to eligible people instead of companies. Moreover, to enhance administrative efficiency, we urge the FCC to shift program eligibility verification away from companies that are not accountable to the American people, and instead allow states to verify eligibility for Lifeline at the same time they determine consumer eligibility for other federal low-income programs. Such ‘coordinated enrollment’ would benefit consumers by streamlining the eligibility process and ultimately enable subsidy recipients to receive a ‘Lifeline Benefit Card’ where consumers could apply the funds to the provider of their choosing. These reforms would make program participation for all service providers more attractive, thereby broadening consumer choice and stimulating competition for the low-income consumer purchasing power.
“IIA applauds the Commission for quickly moving forward to initiate a new proceeding aimed to advance Lifeline reform this year. The time for reform is now, the need is great, and the goal is achievable.“
You can read the full letter here. Additionally, you can download our white paper on reforming the Lifeline program that we published last November.
Friday, May 29
Originally published by eWeek. Reposted here with permission.
IIA Proposes Net Neutrality Legislation to Solve FCC Title II Dilemma
by Wayne Rash
At first, Rick Boucher’s idea seemed too good to be true. The former Democratic Congressman from Virginia was proposing an idea so radical that I had to check my notes to make sure I hadn’t been daydreaming.
The concept was a bipartisan bill that would give both Democrats and Republicans something each party wants and little or nothing they don’t.
Boucher, honorary chairman of the Internet Innovation Alliance, offered draft legislation that would give the Democrats guaranteed, long term, net neutrality and Republicans something they really want, which is to return Internet access to being an information service rather than a telecommunications service, as it is under Title II. Perhaps more important, the bill that Boucher proposes doesn’t attempt to do anything else.
Boucher’s reasoning is based on a recent change of heart in Republican circles regarding net neutrality. Lately, it seems the party is OK with the concept as long as they eliminate the real problem they see with Title II, which is the reclassification. “What is so different today is that the Republicans have offered to the Democrats that range of network neutrality protection,” Boucher said.
“The Republicans have said that they’re willing to put strong protections for net neutrality in place and continue to have protection for information services,” Boucher explained. He said that for their part, the Democrats have told him that they’re willing to work with the Republicans as long as any legislation doesn’t become loaded down with provisions they can’t support.
“That way there’s only two moving parts,” Boucher said. The problem so far is that nobody on the Democratic side of the aisle has moved forward with discussions on how to draft legislation that would get bipartisan support. Now, with the move by the FCC to reclassify Internet access under Title II, Boucher thinks there may be an opening.
In a May 21 press conference held the day before our interview, Boucher and legal scholar Kathleen Sullivan, who is the former Dean of the Stanford Law School, pointed out how recent events could well result in all sides losing what they want. Sullivan pointed out that current legal challenges to the Title II reclassification could, and in fact are likely to, put the entire move by the FCC on hold.
But Boucher pointed out the looming danger that could come about in two years, a Republican win in the White House and a new, Republican-chaired FCC. He said that such an event could effectively undo everything the Democrats want, but also might undo everything the Republicans want, too.
Either way, it could tie up Internet regulation for years and, in the process, hurt innovation through years of uncertainty.
But there’s another potential stumbling block in this otherwise simple idea: that is, will the President sign such legislation? Boucher thinks he will, if only because the White House has been pushing the Title II reclassification is as a way to get net neutrality in place.
Unfortunately, as many people (including me) have mentioned, the FCC’s action doesn’t guarantee anything. A future FCC or a future White House can undo it in a heartbeat. This is why Boucher thinks bipartisan legislation is really the only good way to assure that net neutrality stands the test of time. Once it’s written into law, even the FCC can’t change it.
Of course the FCC doesn’t want to try, just as it has tried to rewrite the Communications Act to say what it wants. Sullivan pointed this out in her statement at the press conference as did Boucher, who is one of the authors of the current Communications Act.
“The Communications Act distinguishes between telecommunication services and information services,” Sullivan said in her presentation. “The Supreme Court has properly defined cable internet use as an information service. The FCC has reversed course and acted outside of the statute. Congress has not authorized this.”
By crafting and passing bipartisan legislation, both sides of the aisle in Congress can avoid outcomes they don’t want, Boucher said. “Democrats can protect net neutrality and Republicans can achieve a top policy priority which is to treat broadband as an information service.”
Boucher said he hopes that the House and Senate Commerce Committees can get the ball rolling. He pointed out that these committees tend to stay away from partisan politics and perhaps because of that continue to function in what is otherwise a politically gridlocked Congress.
Unfortunately, just because a bill makes a lot of sense, fixes a problem that many people believe badly needs fixing and is supported by both parties doesn’t mean it’ll ever see the light of day as a piece of proposed legislation.
The sad fact remains that despite general agreement on the need for a return to the way that the Internet was regulated before the Title II reclassification (meaning lightly if at all) and the agreement by nearly everyone from the Supreme Court on down that the Internet is an information service, getting legislation through Congress is problematic under even the best circumstances.
One can hope that Rick Boucher and the IIA can get this bill past dead center, but hope is about all that’s left.
Thursday, May 21
Earlier today, our Honorary Chairman Rick Boucher and constitutional law expert Kathleen M. Sullivan participated in a teleconference to discuss the political and legal infirmities of the FCC’s recent net neutrality decision. The teleconference coincided with the release of IIA’s informational doc, “Permanently Securing Net Neutrality,” along with our timeline of light-touch regulation that has given consumers a vibrant Internet.
During the teleconference, Sullivan and Boucher discussed the political and legal fragilities of the FCC’s recent decision to impose public utility-style net neutrality rules on the broadband ecosystem, as well as the broader implications of Title II reclassification. Specifically:
How the FCC’s decision to reclassify broadband Internet access service as a “telecommunications service” subject to Title II common carrier regulation is contrary to nearly 50 years of FCC and Supreme Court precedent;
How the FCC failed to legally and factually justify its decision to abruptly reverse course; and
How the FCC now faces the real threat that its monopoly-era approach will be overturned either by a court or through the election of a Republican President that would alter the Commission’s leadership in 2017.
Our thanks to Kathleen M. Sullivan for participating in the teleconference. A recording of the discussion is embeded below:
Friday, May 15
At CNBC, our Co-Chairman Jamal Simmons has an op-ed explaining how the Federal Communications Commission’s new open Internet rules could be swept away with the next presidential election, and how Congress should make permanent in law prohibitions against slowing, throttling and creating Internet fast lanes without imposing public utility-style regulation on broadband. An excerpt:
All those who care about preserving an open Internet that maintains the flexibility to innovate and develop new products and services without entrepreneurs having to seek government permission should support a new law. A new law won’t be perfect and will require both sides to make compromises, but it is a far better path to certainty and avoids legal and political wrangling that could tie advancement up for years, slowing down innovation and economic growth in the meantime.
Voters should ask Congress to pass an open Internet law before all attention turns to the presidential campaign. Otherwise, the next president will hold in her — or his — hands the future of the open Internet. Protecting such an important resource from the whims of shifting presidential political winds is among the most important things voters can do to keep the economy growing.
You can check out Simmons’ full op-ed over at CNBC.
Thursday, May 14
The Multicultural Media, Telecom and Internet Council (MMTC) has assembled an impressive list of co-signers for a letter to the FCC encouraging the Commission to rapidly and comprehensively reform the Lifeline universal service program for the digital age. An excerpt from the letter:
Success in upgrading this 30 year-old program will require policy makers to embrace a new approach. Commissioner Clyburn outlined her thoughts on the subject in a 2012 speech at the American Enterprise Institute referencing immediate Lifeline reform where she stated that reform must occur in a manner that, “…increases the value of other federal investment, reduces administrative burdens, reduces incentives for waste, fraud and abuse, addresses privacy concerns of consumers, streamlines the program to encourage participation and leverages efficiencies from other programs.”
On behalf of the constituents that entrust our organizations to ensuring parity in telecommunications services and other public benefits, we believe that the Commission has the tools necessary to create a new twenty-first century model for the Lifeline program that would serve the needs of low income consumers in an efficient, secure and respectful fashion.
You can read the MMTC letter, which includes its recommendations on how best to reform Lifeline, at the FCC’s website. And for more on the subject, check out our white paper “Bringing the FCC’s Lifeline Program Into the 21st Century.”
Thursday, May 07
FCC Commissioner Mignon Clyburn has penned an op-ed for Multichannel News on the need to reform the Commission’s Lifeline program. An excerpt:
The FCC’s Lifeline program, originally established in 1985, was designed to ensure that Americans have universal access to telephone service because it was found that such access was “crucial to full participation in our society and economy, which are increasingly depending upon the rapid exchange of information.” The FCC emphasized at the time that its “responsibilities under the Communications Act require us to take steps … to prevent degradation of universal service and the division of our society … into information ‘haves’ and ‘have nots.’ ”
Today, a full three decades after the creation of Lifeline, the program still only funds voice service. It has been stuck in a bygone era since its inception and is in need of serious reform.
Commissioner Clyburn goes on to list her recommendations for reform, which include:
• Establishing minimum service standards for any provider that receives a Lifeline subsidy. This will ensure that we get the most value for each universal service dollar spent and better service for Lifeline recipients.
• Relieving providers of responsibility for determining customer eligibility. Lifeline is the only federal benefit program I know of where the provider determines the consumer’s eligibility. That must cease. For providers, this change would yield significant administrative savings, and for consumers, it would bring dignity to the program experience.
• Leveraging efficiencies from existing programs. A coordinated enrollment system would allow customers to enroll in Lifeline at the same time that they apply for other benefit programs; and
• Instituting public-private partnerships and coordinated outreach efforts. The lack of a centralized effort is leaving too many who qualify behind.
Commissioner Clyburn’s recommendations dovetail nicely with IIA’s own assessment of how best to bring Lifeline into the digital age. As we outlined in our white paper “Bringing the FCC’s Lifeline Program Into the 21st Century,” there are four key steps the FCC should make:
• Bring the Lifeline Program into the 21st Century by making broadband a key part of the program’s rubric;
• Empower consumers by providing the subsidy directly to eligible people instead of companies;
• Level the playing field between service providers to broaden consumer choice and stimulate competition for their purchasing power;
• Safeguard and simplify the program by taking administration away from companies that are not accountable to the American public, instead vesting that governmental responsibility with an appropriate government agency.
Friday, May 01
Earlier today, our Honorary Chairman Rick Boucher returned to Sirius XM’s “Morning Briefing” to once again talk technology and regulations with host Tim Farley. Asked to respond to presidential candidate Sen. Rand Paul’s pledge to overturn the FCC’s recent Title II classification, Boucher argued that a congressional repeal be ineffective (the President would simply veto the resolution), and that a bi-partisan bill offered by Republicans would be a better path — especially for Democrats, since the current net neutrality rules could be swept away in the next election.
Here’s audio of the interview.
Monday, April 13
In response to the publication of the Federal Communication Commission’s (FCC) Title II Net Neutrality decision in the Federal Register, we encourage Congress to craft legislation in order to avoid legal challenges and market uncertainty. The publication of the decision starts the clock on potential legal challenges, and given that the FCC’s rules will soon take effect, Congress should use this window of opportunity for legislation that sets forth permanent rules to advance Internet openness, continued investment, and innovation in the nation’s vibrant 21st Century digital broadband economy.
Wednesday, April 08
This morning, our Honorary Chairman Rick Boucher had an op-ed published in The Hill encouraging Democrats to work across the aisle to legislatively ensure net neutrality is enshrined into law. An excerpt:
[W]hy, one may ask, would Democrats want to accept such an offer, since the FCC has now reclassified broadband as a telecommunications service, vesting the FCC with the power to apply a broad swath of common carrier rules to the Internet? Under that authority, the FCC can assure network neutrality and have residual power to regulate broadband providers in other ways that today are unforeseen. Why would Democrats want to give that up for a statute that only protects net neutrality?
The answer is both simple and compelling. The FCC’s reclassification decision rests on a bed of sand. It is highly impermanent and could be washed away with the next presidential election. Today’s seemingly firm network neutrality assurances are at serious risk of being lost in the future.
You can read Boucher’s full op-ed over at The Hill.
Tuesday, April 07
Recently I had the privilege of participating in Georgetown University’s look back at the National Broadband Plan and its impact. Although far less high-profile than many made-for-the-media-circus endeavors, the National Broadband Plan (NBBP) proved a model of creativity… efficient, effective government, your tax dollars well-spent. Much credit goes to NBBP’s fearless and far-sighted leader Blair Levin, and Blair happily enjoyed a victory lap while heaping praise upon his many able lieutenants and soldiers… both outcomes to be expected by those who know Blair well!
While others dove deep into the specific recommendations made and outcomes achieved in the report itself, I took away four core conclusions from the five-years-after look back:
1. People Matter. Being the government is not a barrier to efficiency, innovation or effectiveness… given the right team and right processes. Blair gathered a “best and brightest” of policy analysts to research and write NBBP. He neither relied on outside experts alone nor eschewed career professionals. Instead he blended a team of thoughtful go-getters such as Pew’s John Horrigan, with leading thinkers at several agencies, a “best and brightest” approach that paid dividends.
2. Process Matters. The NBBP planning efforts were highly inclusive, hearing from all sides of most issues and inviting every sector to participate. No ideological or political litmus tests applied, maximizing ideas and enthusiasm. Concurrently NBBP was highly transparent, minimizing suspicions or criticisms of the ultimate product (lessons from the failed-and-far-less-transparent 1993 “HillaryCare” and 2001 “Cheney Energy Policy”).
3. Policy Matters. Even the best process and smartest people would not have counted if they failed to ask the right questions and offer the right answers. In this case, they did both, highlighting the critical need for more spectrum for broadband services, for example, along with creative methods for finding it. NBBP likewise helped illuminate the need for and value of driving fiber deeper into networks, urging an “if you build it they will come” approach that has largely matched reality. And NBBP supplied vision of a broadband-enabled world for those many policy makers less familiar with the end-game opportunities.
4. Politics Matters. In this case, avoiding the unnecessary political morass named Net Neutrality. To have observed the President on the campaign trail, one might have concluded that the #1 broadband issue was Net Neutrality and preventing some nefarious monopolists from hijacking the “People’s Internet.” To its great credit, the NBBP recognized the difference between serious policy questions and partisan political hype in search of marketplace realities and assiduously avoided the issue. (Officially, these political appointees deferred to the FCC that wanted to take the issue head on… yet while the FCC spent a year stuck in the political mud, the NBBP charged forward). In reality the NBBP planners understood that the light-tough regulatory approach identified by President Clinton and maintained by President Bush paid extraordinary dividends, as we saw in a roaring broadband economy. Recent decisions to roll back those long-standing policies are a gamble at best, and an unnecessary one. Broadband and especially wireless has thrived in a light-touch regulatory framework, but we’ve just plucked a whole bunch of feathers from the golden goose. Maybe it won’t impact egg production, but maybe it will. Time will tell.
Thursday, April 02
Our Honorary Chairman Rick Boucher has an op-ed in Thomas Jefferson Institute’s Jefferson Policy Journal arguing for bipartisanship, rather than heavy-handed regulation, to keep the Internet growing. An excerpt:
Not surprisingly, the policies that have fostered this growth and today’s open Internet have largely been bipartisan. Everyone favors good, clean, well-paying technology jobs and the companies that generate those jobs. This bipartisan consensus extended to the Federal Government as well. Back in the 1990s, during the Clinton Administration, the Federal Communications Commission (FCC) raced to do all it could to get the Internet to as many Americans as possible and to keep it free from overly burdensome public utility regulation that then applied to telephone companies. Two decades later we see the results of bipartisan efforts in the form of the free, open, privately-networked Internet that we enjoy today.
And equally unsurprisingly, anything that threatens this consensus and the Internet on which our economy increasingly depends should be of first importance to Virginia.
Unfortunately, the FCC’s new “net neutrality” rules attempt to promote an open Internet by imposing regulations designed for public utilities, such as gas and water companies. Imposing these so called “Title II” regulations on the Internet introduces unnecessary uncertainty into the broadband marketplace, and it could threaten the future investment that is essential to promoting an innovative, growing, and vibrant Internet-centric economy.
By treating the competitive multi-media Internet as a 20th Century “common carrier”, the FCC’s decision opens the door to Internet regulations modeled on the rules that were developed for the Ma Bell telephone monopoly and for other monopolies that offered a single service and were regulated in virtually all aspects of their businesses. Under the light touch regulation that has applied to the Internet since the Clinton era, investment across the information ecosystem has produced an Internet economy that is the envy of the world. A regulatory environment welcoming to investment was at the foundation of that success, and it is now threatened.
Monday, March 30
1. The courts
3. A new president
4. The budget
These are the five perils Julian Hattem of The Hill recently highlighted as potential pitfalls for the FCC’s new net neutrality rules. Hattern’s full piece is required reading for anyone concerned about the future of the Internet, since it casts a light on sheer amount of uncertainty the rules are already causing.
An excerpt about the threat of deadlock from the piece, featuring our own Honorary Chairman Rick Boucher:
For now, given the FCC’s current makeup of three Democrats and two Republicans, any company asking for exemptions to the net neutrality rules is likely to be rejected.
But if that should happen to change — for instance, if a Democratic president is unable to move his or her nominees through a GOP-controlled Senate after the current commissioners’ term expire — the agency could be stuck in a 2-2 deadlock, which would automatically grant an exemption, known as forbearance.
“It’s not too far out there,” former Rep. Rick Boucher (D-Va.), who helped write the 1996 law undergirding the FCC’s authority, recently told The Hill.
“In that circumstance, if a forbearance petition is filed and they don’t act on it, it could be deemed granted.”
Wednesday, March 25
In the wake of the FCC’s controversial decision to regulate broadband services under Title II, our Honorary Chairman Rick Boucher spoke with Jim Puzzanghera at the Los Angeles Times about the possibility of Congress formally enshrining net neutrality into law. An excerpt:
Rick Boucher knows as well as anybody that net neutrality is the type of complex technology topic that Congress finds difficult to handle even when Democrats and Republicans are getting along.
But the former 14-term House member, a longtime player on Internet policy who now heads a telecommunications industry trade group, is optimistic that the controversial Internet issue could be a surprising source of compromise in a time of partisan gridlock.
“Each side can give the other the thing it wants the most,” Boucher, a well-respected Democrat who is honorary chairman of the Internet Innovation Alliance. “This is an optimal moment to legislate.”
Check out Puzzanghera’s full piece over at the Los Angeles Times.
Monday, March 23
At the Washington Post, Larry Downes has penned a piece highlighting a recent Georgetown Center for Business and Public Policy event commemorating the fifth anniversary of the National Broadband Plan. Headlined “Did the National Broadband Plan spur innovation?” the full piece is definitely worth checking out. An excerpt:
For the next five years, we need a significant policy reset to meet both the challenges and opportunities of the broadband revolution. Or rather, as I’ve argued before, a return to the bipartisan “light touch” policy embraced in the early years of the Internet revolution, in which regulators largely left broadband governance to the multi-stakeholder engineering-driven process that created the technology in the first place.
As the broadband revolution spreads its disruption farther from traditional computing, communications and consumer electronics industries, innovators need a kind of Hippocratic Oath from policymakers of all political persuasions. When considering regulatory intervention in quickly-evolving markets and technologies, our overriding public policy should be “first, do no harm.”
But given the alarming rise in heavy-handed interventions from state and local regulators, as well as a growing list of federal agencies including the FAA, FDA, FTC, SEC and the FCC itself, the prospects for a return to more rational policies — the kind that encouraged the broadband revolution to achieve the remarkable progress we have already witnessed — seem dim, at least for now.
The seeds for the National Broadband Plan were sown in the early days of the Obama administration. Perhaps the next president will call for a second plan that will build on the successes of the first. And learn from its misfires.
Wednesday, March 18
This week marks the five year anniversary of “Connecting America,” the FCC’s National Broadband Plan to improve Internet access in the United States. One of the many important goals set forth in the plan is commonly referred to as the “100 Squared Initiative”:
At least 100 million U.S. homes should have affordable access to actual download speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second.——- commonly referred to as the “100 Squared Initiative.”
That seemed like a doable — if lofty — goal back in 2010, but since Internet providers had already sextupled the number of people with >100 Mbps high-speed broadband by December 31, 2013 (the most recent numbers from the National Broadband Map), we thought it would be worth highlighting the progress.
That’s a pretty good leap in the three years that have been measured, but if the FCC is going to hit its goal by 2020, regulatory roadblocks to deployment and the billions in private investment needed to make it happen should be avoided.
For more on National Broadband Plan progress, check out the event being held by the Georgetown Center for Business and Public Policy today beginning at 9 am (EDT). Our own Bruce Mehlman will be participating in a discussion called “The Agenda Ahead” at 3:15 pm. Details on the event—“The National Broadband Plan: Looking Back, Reaching Forward”—can be found here.
Monday, March 16
In the wake of the FCC officially implementing Title II regulations on broadband providers, the organization Tech Freedom put together this handy infographic highlighting the problem with the Commission leaning on forbearance.
Thursday, March 12
Today the Federal Communications Commission (FCC) released its net neutrality order. In response, IIA asks on Congress to step in with a non-partisan and long-lasting legislative solution that preserves and maintains the “open Internet” without the burdens of utility-style regulation. Our full statement:
Market uncertainty accelerates today with the release of the FCC’s decision to impose public utility regulation on the Internet. Long drawn out legal challenges to the agency’s embrace of Title II regulation without clear statutory authority now await the Internet ecosystem. Yet, Congress can still rescue the nation from this fate by crafting a non-partisan and long-lasting legislative solution that would preserve and maintain an ‘open Internet’ without the burdens of utility-style regulation. Now is the time for a bi-partisan Congressional effort aimed at creating statutory permanence that helps advance innovation, investment, and broadband deployment for the benefit of all Americans.
Friday, March 06
The need for a permanent legislative solution to guarantee an open Internet against all risks, present and hypothetical, has been greatly enhanced by the confusion and lack of clarity that Title II proponents have created, perhaps unavoidably, as we break with 20+ years of bipartisan support for light-touch regulation of the Internet and charge forward on treating the most innovative sector of our economy as if it’s among the least. Even net neutrality champions have seemed flummoxed.
For example, one of the loudest champions supporting public utility style regulation for the nation’s broadband ecosystem was Netflix. Netflix publicly pushed the White House and the FCC to embrace Title II as a means to achieve marketplace concessions and prevent assignment of higher costs for consumption of greatest bandwidth. Yet, when Netflix’s Chief Financial Officer was asked at an investment conference this week, “Were we pleased it pushed to Title II,” he replied: “Probably not. We were hoping there would be a non-regulated solution.”
Netflix’s CFO was hardly alone in expressing concern for the potential harms that could cascade from treating the most dynamic and innovative sector of our economy as the most in need of Washington’s control. CloudFlare CEO Matthew Prince eloquently shared his “deep concerns” that the use of Title II to achieve net neutrality protections could well snatch defeat from the jaws of victory – “proponents of a free and open Internet may look back on today not as a great victory, but as the first step in what may turn out to be a devastating loss”. According to reporting by the Wall Street Journal, erstwhile net neutrality champion Eric Schmidt even lobbied the White House against use of the thermonuclear Title II option.
The lack of appreciation for the harms associated with the FCC’s decision to impose public utility style regulation (Title II) on broadband has not been limited to Netflix. During a recent CNBC interview, Title II proponent David Karp, founder and CEO of Tumblr, similarly made statements regarding the proposed Net Neutrality regulations that ironically affirmed why a “light-touch” regulatory approach is superior to Title II to maintain the current open, robust, and investment-friendly Internet. Mr. Karp and others have been led down the proverbial primrose path to believe that Title II is the only solution to keep any potential abuse at bay. However, it is worth reviewing many assertions made by Mr. Karp and other Title II advocates and the realities that contradict them.
The Title II rules will not “slow down innovation.”
Not true. Innovation developed at the Internet’s ‘edge’ by companies like Tumblr depends on robust high-speed broadband wired and wireless networks to reach consumers. Innovative success stories such as Tumblr thrived precisely because Title II was not applied to the Internet ecosystem. Title II regulations that slow broadband investment by Internet service providers will ultimately harm Internet innovation by those hoping for robust and rapidly-improving service.
New rules are needed to achieve “a competitive market for carriers where they’re competing to deliver us the fastest, best Internet.”
That market exists today. It’s the very market in which Tumblr has thrived. The U.S. benefits from robust competition among both wired and wireline Internet providers – competition that exceeds that in Europe, which today maintains Title II-like regulations on Internet providers.
Concerns that Title II will restrict investment “have been disproven.”
Wrong. To the contrary, light-touch regulation promotes greater investment, as highlighted in a recent Internet Innovation Alliance study that compares broadband and telco investment in the U.S. and Europe.
There is currently “a lot of artificial throttling going on, [even though broadband providers] have the bandwidth to deliver this.”
Not really. Allegations of throttling are hypothetical. In fact, the FCC found only four instances of alleged anticompetitive throttling behavior, and all occurred before 2010. The core challenge remains: Managing the exponential explosion of content and data generated by “killer content”, such as Netflix’s popular “House of Cards.” Carriers desperately search for more spectrum for mobile broadband services, which is why wireless companies just spent $45 billion at the recent FCC spectrum auction gobbling up airwaves to provide mobile Internet services. But broadband providers, and new entrants such as Dish, may not make such desperately-needed investments in the future if they believe that Title II will inhibit their ability to recoup.
Title II will “move further in breaking down the near-monopoly situation we have right now.”
What monopolies? No broadband company has as much market share as the leading search engine or many of the leading tech players. Today’s broadband market is vibrantly competitive as consumers have multiple Internet options in markets across the U.S. Title II does not “break down” monopolies, since it was crafted to manage and regulate the one service provider that existed in the 1930s monopoly telephone market.
Despite Title II, providers will continue to build the broadband Internet at faster speeds and that the carriers are “just lying” when they claim otherwise.
Really? Public Internet service companies are responsible to their shareholders and logically invest only in markets where they have an ability to recoup their capital. Investment suffers in markets—like Europe—where a Title II-like regulatory regime prevails.
Thursday, February 26
Today the FCC voted 3-2 to impose Title II regulation on the Internet. In response, our Honorary Chairman Rick Boucher had this to say:
The FCC’s decision to embrace Title II regulation over the Internet now creates an opportunity for Congress to craft a non-partisan legislative solution that provides the legal certainty necessary to preserve and maintain an “open Internet” without the burdens of utility-style regulation. After more than a decade of wrangling about the proper regulatory classification of broadband services and the scope of the FCC’s authority, it is time for Congress to provide the certainty that consumers and industry need. IIA looks forward to working with members of Congress to ensure that the promise of broadband remains available for entrepreneurs, innovators and America’s consumers without a return to the days of utility regulation.