It’s Throwback Thursday for the FCC with net neutrality
by Larry Irving
The Federal Communications Commission (FCC) this week embarked on its own Throwback Thursday with the release of its Open Internet Order. A 20-year bipartisan philosophy of regulatory restraint for the Internet changed when the FCC voted to transform the Internet from a model of global entrepreneurial innovation and advancement to a utility governed under a 19th-century regulatory model. The newly available rules usher in a new era of government involvement in the evolution of the Internet here in America and, perhaps more importantly, in countries around the planet.
Since the inception of the Internet, the U.S. government, under both Republican and Democratic administrations, has fought for regulatory restraint with regard to the Internet. I had the honor of serving as a policy adviser in the earliest days of the Clinton administration’s development of Internet policy and I am confident that our forceful advocacy of limited government regulation of the Internet and related technologies helped foster the explosive growth of the Internet globally over the past two decades.
Proponents of utility-style regulation of the Internet believe that it is the only way to ensure net neutrality or an open Internet. They fear that, without government intervention, Internet service providers such as cable or telecommunications companies will block new entrants or competitors.
Unfortunately, most of today’s proponents of a utility model for the Internet either have forgotten or never knew the genesis of the regulatory-restraint model that helped spur and continues to support Internet expansion.
They fail to realize that the global Internet was not inevitable. In the early days of the Internet, policymakers from developed countries fought for regulation of the Internet to protect incumbent national champion telecommunications providers, and developing economies saw the Internet as a means of America asserting economic and cultural hegemony or dominance. We had the task of explaining the importance of the then-emerging Internet and its potential for transforming economies and nations. We were addressing a skeptical world.
In 1993 when I joined the Clinton administration, only 2 million people were on the Internet. More than half the world’s population had no access to a telephone. Half the planet had to walk an hour or more to the nearest telephone. Mobile telephony was in its infancy.
Telecommunications service generally was provided by state owned and controlled monopolies. Governments in developing countries saw telecommunications services as a source of foreign capital and political control.
Under the leadership of President Bill Clinton and Vice President Al Gore, the U.S. argued forcefully, consistently and passionately for a transformation of telecommunications and technology policy. We suggested countries that wanted to enter the Internet age should:
• Seek to increase private investment
• Promote competition
• Provide open access to emerging networks
• Ensure universal service
• Create a flexible regulatory environment that minimized regulation and would foster competition.
Most nations, and particularly their regulators and policymakers, had no experience with the Internet in the early to mid-1990s. Those officials were used to a command-and-control, top-down utility form of regulation of communications networks. We argued that new networks required new thinking and a new approach, but not necessarily new or more rules. The unmistakable economic benefits of and consumer demand for the Internet helped us to persuade regulators not to regulate the Internet under then existing models.
By any measure, the Internet has transformed the world. We are witnesses to a two-decadelong experiment that has resulted in one of the greatest technological revolutions in history. We have seen an explosion in connectivity and the democratization of communications. Today, more than 3 billion people access the Internet. Internet-based telephony has reduced telephone costs dramatically. Globally, there are more than seven billion mobile telephone subscriptions. The cost of computing, telephony and Internet access has fallen dramatically.
In recent years, we have seen renewed efforts internationally to constrain the Internet, to increase government control of communications, to censor content and to impose institutional controls on the Internet. For 20 years, the U.S. could argue forcefully that we did not regulate the Internet in our country and that regulation of the Internet was not only not needed but bad policy. That has changed with the newly released rules soon heading to the Federal Register, and it will change the debate globally.
The U.S. has led the global debate for two decades on a nonpartisan basis. There is a strong interest among many for a nonpartisan congressional response to the FCC’s action that will ensure an open Internet, but without the burden of utility-style regulation. The U.S. led a technological and regulatory revolution that changed the world. Surely we can find a way to ensure the Internet is open for the benefit of entrepreneurs, innovators and consumers without a return to the days of utility regulation.
Originally published in The Hill. Source URL: http://www.sfexaminer.com/sanfrancisco/its-throwback-thursday-for-the-fcc-with-net-neutrality/Content?oid=2923292
How to Really Preserve the Open Internet
Congress can write a better law than the FCC’s ill-advised regulations.
by Jamal Simmons
The Federal Communications Commission voted recently to approve regulating the Internet as a public utility under Title II of the Communications Act, approving the plan favored by President Barack Obama to achieve what’s known as “net neutrality.” But that may not be the best way to ensure the principles of an open Internet in an era of big political swings. Remarkably, bipartisan Congressional action is a real possibility and would do a better job ensuring lasting protection for consumers.
I bet most people who supported Title II utility-style regulation didn’t know that adopting that option would increase costs on low- and middle-income people. That’s not something in the standard net neutrality talking points, but it’s true. Robert Litan and Hal Singer authored a report for the Progressive Policy Institute that predicted new taxes and fees would increase by $11 billion because of state and local regulations as regulatory costs are passed on to consumers.
In fact, the prospect of increasing taxes and fees is so ominous that it inspired one of the first bipartisan actions of the new Congress. Recently, a bill was introduced in the Senate to prevent some sales taxes, though state and localities may still be able to impose other fees that the law can’t prohibit.
Adoption of Title II may cause other unintended harms that could stifle the innovative economy. The FCC says it will “forbear” from the application of certain provisions to prevent negative outcomes, but that could get pretty messy. Lawsuits are certainly on the way. Companies will jockey for their best position while trying to keep their competitors at bay, questioning the picking and choosing of each rule.
Although the ruling is settled, Congress can still pass a bipartisan solution that enacts the valuable objectives of preserving an open Internet while leaving the onerous utility-style regulations of Title II behind. There are other solutions available, such as Section 706 of the Telecommunications Act of 1996, but the president and net neutrality supporters wanted something more. A Congressional act is a more permanent solution that would enshrine the prohibition against blocking sites, throttling speeds for consumers or allowing paid prioritization by companies for faster lanes, and would require disclosure of network management practices. A law doesn’t leave these rules in the hands of regulators whose opinions could change with the political winds. Who knows what political changes may come in 2016?
I co-chair the Internet Innovation Alliance because of a commitment to seeing more people in communities, such as the one where I grew up in Detroit, participate in the global technology revolution. Students need access to the best technology at school and at home to get up to competitive speed with their peers around the world. Mobile devices can help families get health care services that may be more difficult to access because of the dearth of facilities in low-income and rural communities. Entrepreneurs need access to global markets from wherever they are.
Ensuring we don’t discriminate in digital access is a core value when it comes to closing the opportunity gap. Government is an important partner in maintaining order in the marketplace, but maintaining an environment that encourages public and private investment in broadband availability and helps entrepreneurs maintain the flexibility to build great companies is critical.
It’s rare that Democrats and Republicans can agree on the substance of any matter, but there is great agreement on the principals of an open Internet. Companies, activists and political leaders from both parties want to make sure companies can’t pay for special treatment and consumers have high speed, reliable access to the Internet that can’t be blocked or slowed down. Let’s focus on the core values in common and write a law that will protect consumers while giving companies the ability to innovate without setting ourselves up for years of lawsuits and political wrangling. The people who need access to this valuable resource can’t wait for Washington power brokers to battle it out in the courts.
Source URL: http://www.usnews.com/opinion/economic-intelligence/2015/03/12/congress-can-preserve-open-internet-better-than-fcc-net-neutrality-rules
We Need a New ‘Straight A’ Strategy to Bridge the Digital Divide
It’s imperative that we prepare young people of color with the skills they need to succeed in a high-tech economy.
by Larry Irving and Jamal Simmons
Black History Month provides Americans an opportunity to celebrate our successes as a nation, reflect on what might have been and begin to craft a more inclusive future. Recent reports about the paucity of minority professionals in tech are all the more devastating because today’s underemployment has its roots in our collective failure to prepare all of America’s youth for the technology revolution that has swept our nation over the past 20 years.
Almost two decades ago, we had the honor of having front-row seats at the advent of the Internet era and the emergence of information technology as the new engine for driving global economies. Working at the Commerce Department under President Bill Clinton, Vice President Al Gore and Secretaries Ron Brown, Mickey Kantor and Richard Daley, we saw the dawning of a new era of opportunity and prosperity.
It was clear that the technology revolution could change the trajectory of some of the challenges facing low-income and black and Latino-American communities. On behalf of the Clinton administration, we worked to educate our communities so they could participate in the emerging high-tech economy; to stem the emerging digital divide; to connect urban, rural and low-income schools to the Internet; to inform black and Hispanic-serving colleges and universities about the need to prepare their graduates for careers in technology; and to educate black and Latino youth about the necessity of obtaining the skills they would need to succeed in the new economy.
As assistant secretary for the National Telecommunications & Information Administration, Larry outlined a Straight A Strategy consisting of three components—access, aptitude and attitude—in an attempt to steer a course for technological advancement that would include more of America’s cities and all of our citizens. When the 1990s tech boom collapsed and the Clinton administration ended, efforts such as the Straight A Strategy cratered. Despite the failure to develop an inclusive strategy for minority youth employment in tech back then, elements of that strategy still present a framework that has the potential to work today.
Access: Low-income and minority students still don’t have access to the educational technologies that are commonplace in more affluent American communities. The Federal Communications Commission’s new E-rate program will bring improved access to America’s schools and libraries, making institutional access more available to millions of Americans. The Internet Innovation Alliance, which we co-chair, has joined with key members of Congress and the FCC in calling for an overhaul of our Federal Lifeline program to bring greater access to broadband to millions of low-income Americans’ homes and to foster broader use of computing and Internet technologies.
Aptitude: In addition to providing connectivity and hardware, we also must provide students training and help them obtain the skills they will need for tech-industry jobs. Over a million additional high-tech jobs will be available between now and 2022—high-tech companies should make clear to public-sector leaders what skills students should learn so they are prepared to fill these jobs. Why are we talking about importing skilled workers, when we should be talking about imparting work skills?
Attitude: Finally, we need to ensure that all students and communities are familiar with new technologies and aware of the importance of high-tech skills. As President Clinton said in his commencement address at MIT in 1998, “All students should feel as comfortable with a keyboard as a chalkboard; as comfortable with a laptop as a textbook.” Sadly, that goal still eludes us two decades later.
One way to inspire our youth is to highlight the successes of those who come from their communities: Jewel Burks recently won a pitch competition for Partpic, her app that helps locate replacement parts for companies. Trey Brown recently started selling the Wemojis app that makes round-faced emojis with different skin colors for smartphones. Both of these entrepreneurs are recent Howard University graduates.
Two decades ago, America failed its children by not providing them with the tools, skills, environment and encouragement they would need to thrive in the high-tech economy we knew we were creating. Today, it’s imperative that we enlist the brightest minds in technology, government, education and urban communities to craft a new Straight A Initiative that ensures the future of all of America’s children and to create a new chapter in black history.
Source URL: http://www.theroot.com/articles/culture/2015/02/time_for_a_straight_a_strategy_in_tech.html?wpisrc=newstories
Outdated U.S. Regulations Would Stifle Global Internet
by Larry Irving
After years of contentious debate on net neutrality, there is good news and bad news in Washington. The good news is that there is strong bipartisan support for an open Internet. The bad news is that there is an increasingly partisan disagreement on how best to protect the open Internet.
Federal Communications Commission Chairman Tom Wheeler recently provided a preview of the open Internet rules he intends to enact, but this sneak-peek was not well received by Republicans on Capitol Hill or by his Republican colleagues on the commission. Historically, Internet policy has been relatively free of partisan strife — but that may no longer be the case. Over the past decade, preservation of the open Internet has galvanized political progressives, consumer advocates and policy advocacy groups. Advocates of net neutrality decry court rulings suggesting that the FCC might not have authority to protect the open Internet, and so utility-type regulation of broadband under Title II of the Communications Act is seen by many progressives — and by the president and his advisers — as the only way to unambiguously assure the FCC’s authority. Yet Title II regulation of the Internet seems like the wrong solution to those of us who support an open Internet but fear the impact of burdening still-evolving wired and wireless networks with centuries-old rules.
The U.S. government declaring the Internet an essential utility and applying Title II rules will also have an impact on policy deliberations about the Internet in other nations. Since the inception of the Internet, the U.S. government has urged international policymakers and regulators to exercise regulatory restraint. To reverse course at this critical time in the development of the global Internet seems self-defeating.
Despite partisan distrust and increasingly strident debate about Internet policy in Washington, an opportunity to protect core Internet values without changing our historic bipartisan approach to Internet regulation remains. Republican members of Congress recently circulated legislation that would:
• Enforce prohibitions against wired and mobile Internet service providers from blocking access to lawful content and devices;
• Prohibit future “paid prioritization” deals under which content providers pay serve providers to have their content ahead of competitors;
• Prohibit “throttling” or slowing of Internet traffic; and
• Require detailed disclosure of network management practices.
While Democrats in Congress expressed concern about other provisions of the draft bills, those principles could serve as both a baseline and springboard for further congressional deliberations. A key benefit of a legislative solution is that it would provide assurance that some future commission won’t overturn proscriptions against network discrimination. Insistence on Title II regulation by a badly divided FCC only assures three things:
• The seemingly interminable fight over net neutrality will continue at the commission, in the Congress and in the courts;
• Regulatory uncertainty that will stifle investment and innovation in our nation’s most critical infrastructure will continue; and
• Policymakers and regulators in other nations will be encouraged to regulate an Internet that has thrived precisely because of the lack of government interference.
One year ago it would have been considered an historic victory of monumental proportions for Congress to pass open Internet legislation. And there is still time for a bipartisan legislative endorsement of the open Internet today, without resorting to Title II.
Both sides of the political spectrum need to ask themselves if they are more interested in making good policy or making a point. If Republicans and Democrats would embrace the opportunity to craft a legislative solution and declare victory, the ultimate winners would be those of us who want to see the Internet remain open — not just here in America, but globally.
Source URL: http://www.sfchronicle.com/opinion/article/Regulating-the-Internet-like-a-utility-is-wrong-6090757.php
Why Download Europe’s Lousy Broadband Policy?
Treating the Internet like a utility has been tried, with deleterious effects on innovation and costs.
by Rick Boucher and Fred Campbell
As the Federal Communications Commission prepares to treat Internet companies like public utilities under Title II of the 1934 Communications Act, it is worth asking how government regulation of the Internet would actually work. Conveniently enough, Europe has been experimenting with heavy-handed Internet regulation since 2002, and the results are a warning of what the U.S. can expect.
That is the conclusion of a new study by our organization, the Internet Innovation Alliance, a coalition of businesses and nonprofits. Over the past two decades, the U.S. has benefited from a bipartisan, light-touch broadband regulatory regime that has spurred more capital investment, more competition and—perhaps most important—more broadband capacity than in the European Union, which has a larger population and similar economy.
Consider capital investment, without which broadband networks do not exist and cannot be modernized. Fixed-broadband operators in the U.S. invested $137 billion in 2011 and 2012, more than four times Europe’s $31 billion over the same time period. U.S. mobile operators, at $55 billion, invested twice as much as their European counterparts’ $29 billion. Even when the comparison is made as a percentage of industry revenue, the U.S. investment advantage persists.
Europe’s “wholesale-access” regulatory regime, under which fixed operators must make their networks available to competitors at a regulated price, was ostensibly designed to promote competition. Yet in Europe, powerful incumbent carriers hold 65% of the local telephone market, while in the U.S. 59% of the local telephone market is served by new competitors. More than 90% of U.S. households can choose from among 10 or more providers.
A similar story emerges in facilities-based broadband competition. While 76% of American households have access to three or more fixed-broadband providers, in Europe less than 50% do. This is in large part because European investment has been so weak. Without robust investment, competition cannot flourish, and it is no surprise that 82% of U.S. households have access to high-speed broadband, compared with 63% in the European Union.
The study’s analysis of mobile networks also illustrates how the U.S. offers greater access than Europe to the highest-speed, so-called LTE networks. In 2012 only 30% of European households had access to LTE, while 79% of American households did.
So where does this leave us? Net-neutrality proponents assume that the impact of common-carrier regulations will be minimal and that the U.S. will maintain its technology lead forever, but the European regulatory example suggests that such an outcome is far from certain. It is more likely that imposing regulations crafted for last century’s monopoly telephone service will have a crippling and chilling effect on broadband investment. Investment drives innovation: As the Internet Innovation Alliance study demonstrates, Europe has fallen badly behind the U.S.
The European Union has wisely decided to pull back, recommending in 2013 that member-state regulators not impose wholesale-access prices on the deployment of next-generation networks, fearing that private investment would be severely reduced.
It is ironic that shortly after the European Commission recommended relaxing its Title II-style approach to broadband regulation, the FCC began considering whether to impose such a failed policy in the U.S. The irony is compounded by the reality that the FCC could use its existing authority to adopt strong network-neutrality protections without reclassifying broadband as a public utility.
Sufficient investment and innovation are needed to prevent Internet capability in the U.S. from declining, an alarming prospect for one of the economy’s most dynamic sectors. Furthermore, adding regulations while Europe scales back may send capital overseas to a more welcoming investment environment.
Mr. Boucher, a former Democratic congressman from Virginia, is a partner at Sidley Austin LLP and honorary chairman of the Internet Innovation Alliance. Mr. Campbell, formerly chief of the Federal Communications Commission’s Wireless Bureau, is the author of the study discussed in this op-ed.
Source URL: http://www.wsj.com/articles/rick-boucher-and-fred-campbell-why-download-europes-lousy-broadband-policy-1423700586
Wheeler move latest blow to bipartisan Internet
Partisanship will only stunt progress progress on internet
by Bruce Mehlman and Larry Irving
While many things in Washington seemed broken over the past few decades, tech policy has not been one of them. Regardless of which party controlled Congress or the Federal Communication Commission (FCC), technology issues enjoyed civil discourse, bipartisan collaboration and thoughtful compromise. Partisanship stopped at the network’s edge.
As thought leaders and policy gurus convened last month for the annual “State of the Net” conference, they faced a sobering reality: The State of the Net is imperiled. By Washington. The borderline theological debate over “net neutrality” is breaking the rules and threatening an approach that served our nation well. Policy deliberations once decided by non-partisan engineers have been hijacked by the Occupy Wall Street versus Tea Party legions. Battle is joined, lobbyists engaged, grassroots activated.
And the war reached new heights this week, as FCC Chairman Tom Wheeler proposed regulating our most advanced companies based on the rules designed for our oldest.
For a majority of innovators and entrepreneurs around the nation, partisan paralysis is unwelcome news, likely to spawn years of litigation, cloud investment certainty and potentially slow our economy’s most powerful engine. For objective policy analysts, the partisan intensity surrounding the net neutrality debate is unnecessary and counterproductive. Bad politics is making for bad policy.
It has not always been thus. For example, presidents from both parties promoted federal investment in basic research that ensured our research universities’ global preeminence and launched the semiconductor, cellular and Internet industries, among others. Bipartisan high-skilled immigration policies encouraged the best and brightest to study here, invent here and create great jobs here. Collaborative support for patent laws helped craft the critical balance needed for intellectual property to flourish, while bipartisanship enabled the world’s first incentive for private research — the highly-effective R&D tax credit passed in 1981 — subsequently emulated by most developing economies.
A productive, bipartisan answer to the net neutrality challenge is staring us in the face. Congress makes the laws, and Congressional action here can be bipartisan, focused and effective, ensuring the Internet remains “fair and open.” For conservatives, the legislation will ensure that our most advanced technologies are not regulated like 20th century utilities and that FCC authorities are clearly identified by Congress. For liberals, such legislation will explicitly empower agencies to prevent companies from blocking, degrading or placing anti-competitive restrictions on Internet access without risk of yet-one-more legal challenge to their authority. Consumers gain protections, while businesses enjoy greater regulatory certainty. Only the lawyers lose.
America’s historic leadership in high technology innovation and entrepreneurship is more than the product of divine providence or cultural exceptionalism. Enlightened policies and regulatory humility have proved essential elements to reward risk-taking and encourage investment and invention. We face many challenges ahead, demanding smart policy. We need more spectrum to accommodate ever-accelerating wireless use and the Internet of Things. Network operators need greater flexibility to handle the exponential waves of new data. We need a united front against growing digital protectionism and assaults on the market-based multi-stakeholder model. Too few Americans possess the digital literacy to thrive in the knowledge economy, while too many cyber criminals remain unchecked.
It is time to return partisanship to the network’s edge. There is important work to be done.
Source URL: http://www.usatoday.com/story/opinion/2015/02/06/fcc-technology-net-neutrality-technology-congress-washington-column/22762691/
On Net Neutrality: Title II Regulation Means Higher Taxes On Consumers
by Jamal Simmons
Congress is diving into the Open Internet debate with hearings last week on new net neutrality bills in the House and the Senate. Intense controversy over the benefits and downsides of turning broadband service into a public utility drags on, underscoring the need for a legislative solution. Many people advance claims on the impact of net neutrality to consumers, but now there are real numbers to discuss—numbers that make it clear that the President’s plan of imposing public utility-like Title II regulation on the Internet would lead to holes in family budgets.
A recent study by Progressive Policy Institute economists Robert Litan and Hal Singer is the first significant effort to quantify how much it could potentially cost consumers if broadband services are reclassified as “telecommunications services” under Title II of the Communications Act of 1934. By regulating broadband service under Title II, the Federal Communications Commission would essentially be required to treat this service under the same rules as the old telephone monopoly from decades ago. By switching from the current light-touch regime to Title II, broadband Internet services would be subjected to a panoply of requirements, such as for entry and exit. That also means broadband would likely become burdened with a host of new state and local taxes and fees, the kind we pay on our monthly home and/or wireless phone bills. These taxes and fees are normally passed on to consumers; when they rise, consumers end up paying more. Expect the same with broadband.
According to Litan and Singer, these new state and local fees will increase by $15 billion, impacting consumers to varying degrees. The average American household with a fixed broadband connection would pay in the range of an additional $51 to $83 per year, and those with one smartphone or other wireless broadband device (tablet) would pay $72 more annually. For many working American families, that’s money that could be used to help cover necessities like food, gas or rent.
Make no mistake: These fees would apply if broadband is reclassified under Title II. Unlike certain provisions of the law, the FCC has no forbearance authority over how a state imposes taxes on its services. It would be up to Congress to step in and take action.
When the government taxes cigarettes and tobacco, it discourages people from using these products to protect health. In this case, those taxes would discourage broadband use, exactly opposite of the desired impact. High-speed Internet is our link, not only to each other, but to health, education, government, entertainment and information. Broadband literacy is the foundation for jobs of the future and increasingly jobs of today’s economy. We shouldn’t tax broadband more heavily; it would be like charging people to enter a public library.
The PPI report makes clear that Title II net neutrality proponents need to face the facts that any FCC action to reclassify broadband as a telecom service will result in a tax increase for the average American. Besides, reclassification is completely unnecessary—the FCC can use its existing powers under Section 706 of the Telecommunications Act to ensure an open Internet, preventing blocking access to websites, “paid prioritization” or other actions that are harmful to consumers.
Yes, there are good government programs that help low-income consumers with basic communications services. The FCC’s Lifeline program, for example, has demonstrated success in connecting millions of Americans to voice telephone service—but the program should be modernized to include broadband. Like Lifeline being stuck in centuries past, additional taxes and fees on high-speed Internet would be another delay to our nation fully entering the broadband century. We need more and better high-speed connections; policymakers shouldn’t discourage broadband investment and broadband consumption with unnecessary rules.
Source URL: http://www.forbes.com/sites/realspin/2015/01/26/on-net-neutrality-title-ii-regulation-means-higher-taxes-on-consumers/
Net Neutrality Is Low-Hanging Fruit for Congress
by Rick Boucher
As is normal, the start of a new Congress resonated with pledges of bipartisan intention as legislative leaders expressed a determination to work across the aisle in addressing the nation’s challenges.
All too often, the opening week’s bipartisan good feeling devolves into partisan bickering. But, this year can be different. The tech arena is yielding a promising legislative opportunity with ample incentive for Democrats and Republicans to cooperate in the early passage of a bill that resolves one of the most contentious policy debates of 2015.
The issue is net neutrality, which has dominated the debate in tech policy circles since the U.S. Court of Appeals for the District of Columbia Circuit invalidated the Federal Communications Commission’s 2010 Open Internet Rule and tossed the matter back to the FCC. The rhetoric has sharpened and the partisan divide has widened as the time for FCC resolution of the matter approaches.
The nation’s broadband providers are concerned that during the FCC’s Feb. 26 public meeting, as a prelude to adopting a new set of net-neutrality rules, the agency will decide to treat broadband Internet access service as a public utility under Title II of the Communications Act. With justification, they claim that imposing monopoly rules from the era of rotary telephones on broadband services would stifle investment at the very time when we have a national goal to extend high-speed Internet service to 98 percent of the nation. Both Republicans and Democrats have echoed those arguments.
On the other side of the debate are claims of potential consumer harm that would result if the commission fails to reclassify broadband under Title II. Without Title II, they argue that the FCC lacks authority to prevent actions such as the blocking of websites, the slowing down of competitors’ content or the creation of Internet fast lanes that harm consumers or potentially benefit some content providers to the disadvantage of others.
The coming month, before the FCC acts presents a timely opportunity for Congress to step in and resolve the debate on terms that would seemingly be agreeable to Democrats and Republicans, broadband providers and consumers seeking continued access to robust high-speed Internet services. The FCC promulgated its Open Internet Rule in 2010 against a backdrop of consensus that had been reached through lengthy discussions among the stakeholders. While not all of the parties were in agreement, a critical mass of consumer groups, broadband providers and policymakers created the consensus that resulted in the FCC’s Open Internet framework. It’s notable that among broadband providers, AT&T publicly expressed support for the rule, and it was ultimately approved with the FCC’s Democratic members voting affirmatively. Even more noteworthy is that in the four years since the Open Internet Rule was adopted, broadband providers have integrated its requirements into daily operations, and high-speed Internet access service has expanded absent consumer complaints of violations.
Narrow legislation that specifically empowers the FCC to re-promulgate the 2010 Open Internet Rule would simultaneously cure the D.C. Circuit’s objection that the FCC lacked the statutory authority to act, maintain the existing classification of broadband, avoid imposing new barriers to investment associated with reclassification, and assure that rules are in place that maintain Internet openness. While enabling the FCC to adopt the 2010 Rule, the legislation would circumscribe the agency’s authority to impose onerous Title II regulations on broadband.
This approach would allow parties on both sides of the debate to claim victory and secure for each its major objective. It’s a rare opportunity for Congress to act in a bipartisan fashion while a substantial measure of bipartisan good intention remains. Let’s not let the moment pass.
Source URL: http://www.rollcall.com/news/net_neutrality_is_low_hanging_fruit_for_congress_commentary-239195-1.html
For Lifeline Program in the 21st Century, Consumers Must Have the Power
by Rick Boucher
More than 45 million people in the United States live below the poverty line. For many of these Americans, the Federal Communications Commission’s Lifeline program has been a lifesaver, offering essential communications in times of emergency, not to mention help in everyday life. But it’s a 20th century government program aimed at spreading a 19th century technology: basic voice telephone service. Nearly all agree that, in today’s broadband world, this program from the 1980’s needs a major overhaul.
The decades-old premise of the Lifeline program is that low-income consumers should have access to the communications service Americans commonly use. In the 1980’s, that meant assuring the availability of basic voice service; today, that means broadband.
Each day brings new examples of how broadband-delivered Internet services are fundamentally changing the nature of communications. In the 1980’s, the wired telephone was the predominant communications platform for almost everyone. Today, just five percent of Americans rely exclusively on “plain old telephone service.” The rest use a variety of communications devices, a growing number of which are broadband-enabled.
So the question is not just whether to expand Lifeline to include broadband, an idea endorsed by two FCC commissioners and the chairman at the agency’s December open meeting; the question is how to incorporate broadband without exploding the cost of the program.
A recently released report from the Internet Innovation Alliance (IIA) charts a path toward reform. In today’s highly competitive communications market, the new reality is that consumers are now in charge. No longer do communications users passively accept a service designed by regulators and delivered by telephone companies. With 80 percent of Americans having access to five or more wireless offerings in addition to cable and wired telephone, consumers freely shift among communications services, selecting the one that is best tailored to their needs.
Respecting the new power of consumers in the market, IIA recommends that the Lifeline subsidy become user-directed. It’s an elegant and simple concept: Let the consumer decide. The aid could be applied to a broadband service that incorporates person-to-person communications applications such as Skype and FaceTime, or to plain old phone service, via a voice-only wireless carrier or a wired telephone. Similar to the federal Food Stamp program, eligible subscribers could receive a “Lifeline Benefit Card” with which they can easily shop among various communications providers.
In theory, the FCC could make this change, bringing millions of Americans into the competitive telephone market, without increasing Lifeline program costs. In fact, the simplicity of a Lifeline shopping card provided to eligible consumers may prove less administratively costly than the current program.
Another major shortcoming of the Lifeline program is related to its administration. Today, the carriers, who have obvious financial incentives to increase enrollment, determine subscriber eligibility. That determination is an inherently governmental function and should be given to a governmental agency such as the Universal Service Fund Administrator or state public utility commissions that have every motivation to eliminate fraud and program misuse. The change would not only significantly increase administrative efficiency, but would also reduce program cost.
Beyond these major program reforms, it would make sense to de-link the Lifeline program from any notion of “eligible telecommunications carrier” (ETC) status. This concept is as worn out as the notion of Lifeline only supporting voice service. With these targeted changes, we can bring an essential government program into the 21st century, offering direct and immediate benefits to the people it serves while strengthening it against fraud and misuse.
Imagine all the ways the 14.5 percent of Americans living below the poverty line could benefit from broadband. Modernization of this government program is a must because, today, the Internet is a jobs line, an education line, a health line, and an information line. The Lifeline Program has demonstrated success connecting millions of Americans for the first time, but its future can be even more meaningful than its past.
Source URL: http://www.bna.com/lifeline-program-21st-n17179921919/
Download Boucher’s Op-Ed From Bloomberg’s Daily Report for Executives (PDF)
Download Boucher’s Op-Ed From Bloomberg’s Telecommunications Law Resource Center (PDF)
Title II is wrong way to keep an open Internet
by Jamal Simmons and Rosa Mendoza
Last week, the president called on the Federal Communications Commission (FCC) to reclassify broadband service under Title II of the Telecommunications Act of 1934. We fully agree with the president when it comes to his goals for an open Internet. There should be no blocking, throttling, or paid prioritization by companies looking for faster lanes than their competitors. In addition, ISPs should be completely transparent. The one thing we differ on is regulating the Internet under Title II, a piece of legislation created decades ago for the regulation of obsolete devices.
The president’s approach is the wrong way to go especially when considering the recently released Pew Internet Project report on “Killer Apps in the Gigabit Age.” The report detailed these experts’ beliefs about the breathtaking future that could be possible when connection speeds reach 1,000 megabits of information per second, about 100 times faster than speeds commonly available today in the United States.
These speeds will allow far more data to pass between and through networks. Many experts who responded to Pew’s questions looked forward to the commonplace use of virtual realities and avatars for meetings, sporting events and long-distance family dinners. Daily home check-ins from devices and far away medical professionals could revolutionize healthcare. Shopping could become a completely different experience with consumers choosing new dresses online and having them appear on a home 3-D printer queue soon after.
Ensuring everyone has access to these coming developments should be a major priority in the Internet Age. Twenty years ago, the talk of a digital divide in computer access became commonplace. In recent years, Pew has well-documented the disparity in broadband access for African American, Latino and other under-resourced communities. Since these communities are already at a disadvantage when it comes to broadband access, it makes them significantly more vulnerable to policies that could potentially impede innovation or progress within the industry.
Obama made the right call by taking on the challenge of getting schools and libraries access to faster broadband through his ConnectED initiative and modernizing the Universal Service Fund. Getting those students high-speed broadband access at home requires private sector investment and that means creating more certainty. According to the Progressive Policy Institute, broadband providers spent “roughly $46 billion in broadband investment in 2013.” To continue promoting this type of private sector investment we must not over-regulate innovative broadband providers using antiquated policies that may end up being litigated for years and diminish the certainty of being able to bring high-speed, advanced broadband networks to all Americans.
Technology has surpassed the days of the rotary phone system and has created a dynamically competitive Internet ecosystem that touches virtually every sector of the economy from banking, ordering a taxi, or even receiving medical attention. In the early part of the twentieth century no one could have imagined how the phone would transform and ultimately provide the technological capabilities it offers us today. Similarly, society can only speculate as to the potential benefits that further technological advancement will make possible in 10 or 20 years. Adding another layer of bureaucratic oversight on this dynamic industry will hinder innovation and potentially discourage investment. Innovative and forward thinking companies would face the inevitable requirement to obtain government approvals and investors may be forced to look elsewhere for capital returns to avoid the uncertainty of navigating the labyrinth of bureaucratic approval processes.
A better option exists that would provide the necessary oversight to preserve the Open Internet. The courts have made clear that Section 706 of the Telecommunications Act of 1996 provides the FCC with enough authority to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.” That would foster an environment for investment flexibility and open access.
Investment flexibility matters not only to broadband companies and individual consumers but also to technology companies founded by African American and Latino entrepreneurs. Though these companies tend to operate with smaller profit margins, they also tend to hire more minorities. That matters when unemployment among Black and Latino communities remains higher than white unemployment. Many companies would not be able to survive the added costs of complying with Title II regulations that may impact “edge providers.”
The FCC should pursue the President’s push for an open Internet, but we recommend using a lighter regulatory approach such as Section 706. Focusing on regulatory solutions that ensure access, innovation and investment will keep all Americans benefitting from these digital advancements.
As Chairman Wheeler himself said in October 2014, “Twenty-first century consumers shouldn’t be shackled to rules that only recognize 20th century technology.”
We couldn’t agree more.
Simmons is co-chair of IIA and Mendoza is executive director of HTTP.
Source URL: http://thehill.com/blogs/congress-blog/technology/224892-title-ii-is-wrong-way-to-keep-an-open-internet
The Lesson From Europe’s Broadband Breakdown
by Rick Boucher
Today a debate is being waged in Washington. Various approaches to preserving the open Internet are being weighed, and reclassification of broadband services under Title II of the Communications Act is still at the heart of the debate.
Earlier this year, Rep. Bob Latta introduced a bill (HR 4752), that would prevent the Federal Communications Commission from putting broadband Internet service providers under Title II, and just recently, Rep. Henry A. Waxman, D-Calif., sent a 15-page letter to FCC Chairman Tom Wheeler proposing a hybrid approach to net-neutrality rules involving Title II.
Title II reclassification is completely unnecessary. It would retard broadband investment and hobble efforts to create better and faster services.
The harms arising from monopoly-era regulation are clearly demonstrated with a glance toward Europe, where requirements for broadband unbundling and leased access have crippled private investment and left the continent far behind. The U.S. is ahead of Europe on virtually every metric of broadband deployment, from access to next-generation networks, to rural access to broadband and investment per household ($562 vs. $244), with better service here as well. While 4G LTE is widely deployed in the U.S., in Europe it’s more difficult to find.
The U.S. is winning the race for broadband — and future economic competitiveness — because our light-touch regulatory model led to an explosion of private investment and innovation while Europe, with heavier regulation, suffers in comparison.
The lesson is clear: Regulatory structure drives investment and directly affects broadband quality and price.
Everyone concerned about the future of broadband wants to preserve an open Internet. But we do not need to adopt a European or public-utility-style regulatory model to achieve that goal. There is a better, more investment-friendly approach using the FCC’s existing powers and maintaining today’s light-touch regulatory treatment.
Section 706 of the Communications Act directs the FCC to take steps to promote broadband deployment. The U.S. Court of Appeals for the District of Columbia has ruled that the FCC has the power, under section 706, to protect the openness of the Internet and to address any violations. Acting under section 706, the FCC could prohibit any broadband management practice that violates a rule of “commercial reasonableness.” Under this rule, the FCC could, for example, prevent any practice such as paid prioritization that degrades the broadband capacity to which users subscribe.
Make no mistake: The FCC’s upcoming decision will affect the quality and availability of broadband. Light-touch regulation works.
First crafted by the Clinton administration, this model created an environment that fostered the large investments in broadband and the fast speeds we enjoy today. The FCC’s 2010 Open Internet rule followed a similar path. In its wake, companies poured tens of billions of dollars into all types of broadband — wireless, wireline and cable. Since that time, video over broadband, tablet computing and the app economy have grown exponentially. Investment and innovation have prospered, including at the edge of the Internet.
What the FCC has termed the “virtuous circle” of broadband investment and adoption depends on private capital. The flow of investment dollars will continue only if the agency now reaffirms its open Internet authority under section 706 alone, rather than by a reclassification of broadband services to the Title II rules designed for the telephone monopoly.
Net neutrality has taken center stage with President Barack Obama’s recent statement and in the aftermath of three congressional hearings, and one thing is apparent: Subjecting broadband services to heavy, monopoly-era regulation with Title II reclassification is simply not necessary to achieve the assurance of continued Internet openness — and would carry harmful consequences. The FCC can and should proceed on a path that uses its authority under Section 706 to craft new rules that will help protect consumers, promote innovation and help achieve the nation’s twin goals of ubiquitous broadband deployment through private investment and preservation of an open Internet.
Former Rep. Rick Boucher, D-Va., served in the House from 1983 to 2011. He was chairman of the Energy and Commerce Subcommittee on Communications, Technology and the Internet. He is honorary chairman of the Internet Innovation Alliance and leads the government strategies practice at the law firm Sidley Austin.
Source URL: http://www.rollcall.com/news/the_lesson_from_europes_broadband_breakdown_commentary-238072-1.html
Don’t let the government kill the Internet’s next big thing
Innovative gigabit network should be supported, not stifled
by Larry Irving
“Our job is to steer, not row.” These were the words of the late Secretary of Commerce Ron Brown, my then boss, when I had the good fortune of being a member of the Clinton Administration’s technology team during the early days of the Internet.
We were not “hands-off”, but our goal was to create an environment where innovators and entrepreneurs could succeed to the benefit of consumers and competition. Regulatory humility, we found, was a key ingredient.
Over the past 20 years, we have benefitted from a technological abundance that has transformed and continues to transform virtually every aspect of our lives. And there is more change and progress yet to come. Recently I moderated a panel at the Pew Research Center where we discussed a new report on the coming Gigabit Age. Of the technology experts Pew surveyed, 86% believe major new applications will accompany a rise of bandwidth speeds in the U.S. by 2025.
Americans are living in a technological golden age, and public policy has played a supportive role.
In the early 1990’s, we understood that the government was not going to build the Internet. America’s Internet would be built by the private sector — and it has been. The regulatory environment that helped enable and propel the private sector investment that built the Internet as we know it was intentional. We advocated for passage of the Telecommunications Act of 1996, expecting that it would unleash investment in our domestic infrastructure. Since passage of the Act, America’s communications companies, wired and wireless, have invested more than $1.5 trillion dollars in advanced networks and continue to invest at a rate of approximately $100 billion per year.
A gigabit network will be 20- to 100 times faster than the networks the majority of Americans use now and will continue or, more likely, will propel the technological transformation that the Internet ignited barely two decades ago. Private investment of additional tens of billions to hundreds of billions of dollars will be required to build the new gigabit networks.
Most Americans have heard of Moore’s law, which holds that computer processing power will double every two years, and understand its contributions to technological innovation and advancement. Many fewer have heard of Cooper’s Law, which holds that the number of voice or equivalent data transactions possible via all useful spectrum doubles every 30 months.
Cooper’s Law helps our wireless networks carry the ever-increasing demand placed on them. But consider this: 10 million people purchased iPhones in the few weeks following the introduction of Apple’s newest models. Network operators know from experience that users of each new model of the iPhone typically burn through TWICE as much data as they did on the previous version. As devices get faster and smarter, networks also must get faster and smarter.
Cooper’s Law is buttressed by investment in, and increased development and innovative design of, the wired networks that form the backbone of our communications networks. After all, designing, building, maintaining and defending from attack the networks that carry our Internet communications is an expensive and difficult task. The cost of the Gigabit Network that Pew’s experts prophesied will be huge, but the benefit to America will be even bigger.
This week, President Obama asked the FCC to reclassify consumer-based Internet service as a Title II service under the 1934 Communications Act, essentially equating to heavy regulation of broadband. As the Federal Communications Commission weighs options during its Open Internet proceeding, the question remains whether today’s policy makers will be successful in maintaining a regulatory and investment climate that will promote continued investment in and innovation of new broadband networks.
My hope is that the public officials in charge of this stage of Internet growth approach their roles with as much regulatory humility as we did, aiming to steer, not row, and remembering what Secretary Brown understood: Innovation is not inevitable. The regulatory choices they make will propel or forestall innovation.
Larry Irving is a former U.S. Assistant Secretary of Commerce. He currently is the CEO of the Irving Group, a consulting firm that provides advisory services to technology and telecommunications companies. He also is co-chairman of the Internet Innovation Alliance (IIA), a non-profit advocacy group that includes telecommunications companies.
Source URL: http://www.marketwatch.com/story/dont-let-the-government-kill-the-internets-next-big-thing-2014-11-13
Uncaged bears and rotary phones
by Former Rep. Rick Boucher (D-Va.)
Every once in a while, someone comes up with an amusing article about obsolete laws that somehow have remained on the books for far too long. A law in Missouri, for example, apparently stated that it’s illegal to drive with an uncaged bear in the car.
The same exists in the telecom industry. The equivalent of the uncaged bear is a whole panoply of regulations that arose when Ma Bell was the monopoly telephone provider — and that meant rotary telephone, not your mobile device. Unlike some of the sillier laws still in place, antiquated regulations carry real costs in telecom.
The United States Telecom Association (USTA) has petitioned the Federal Communications Commission to “forbear” from enforcing obsolete regulations, precisely so companies can stop spending their dollars on complying with decades-old legacy rules and start spending even more dollars on bringing ever-faster broadband to homes and businesses. It’s sad, really, that the companies should even have to make such a petition. You’d think the FCC would want to do everything in its power to encourage high-speed broadband deployment. But today, the telcos have to spend Janus-like, facing both forward to broadband and backward to the narrowband era. In fact, according to a recent study, between 2006 and 2011, total spending by telephone companies on equipment totaled $154 billion. Shockingly, most of that expenditure was for maintaining the old circuit-switched telephone network, and the minority was devoted to the broadband technologies of the 21st century.
Consumers are fleeing the old network in droves. Only 5 percent use it exclusively, and another 28 percent use it in combination with a wireless service. Two-thirds of communications users have left the old network entirely. Every dollar telcos are required to spend on a network consumers are abandoning is a dollar not spent on deploying the modern networks that consumers prefer. Viewed in this light, the USTA plea for relief is entirely understandable — and it’s entirely justified.
FCC Chairman Tom Wheeler has said he wants more “meaningful competition” in high-speed broadband, particularly between telecom companies and cable providers. As Wheeler put it, these new broadband entrants are “well-positioned to give cable a run for its money, offering consumers greater choice.” This is exactly how it should work.
A while back, cable was the new kid on the block offering broadband and voice services; now, as Wheeler suggests, it’s the telcos’ turn to offer greater broadband competition. But for this to happen, regulatory relief is urgently needed. New entrants, such as wireless operators and cable, without regulatory restraint can devote their investments solely to the new technologies that consumers want, while telco spending by regulatory mandate remains anchored in the past. The best way to encourage telcos to become vibrant competitors with cable is to get rid of legacy rules where their very existence deters the kind of private-sector investment that everyone — including the government — wants to stimulate.
To make matters even worse, last week, President Obama urged the FCC to regulate consumer-based Internet services under the same rules that govern rotary telephones. Applying antiquated regulations to broadband will further complicate the effort by the USTA and others to bring the nation’s communications regulations up to date. The specter of saddling broadband with obligations on pricing, entry and exit from the market and other legacy regulations has introduced greater uncertainty that may jeopardize our clear national goal to encourage greater broadband competition. In fact, this uncertainty resulted in AT&T announcing a “pause” in further broadband deployment, while it better understands the rules of the road for future broadband investment.
So whether the issue is legacy telephone rules from the monopoly era or the possibility of shackling today’s broadband providers (and Internet edge companies offering telecommunications-related services) with similar rules from decades ago, tell the president, the FCC and Congress not to keep rules that are unnecessary and that interfere with the fastest possible expansion of technologies that consumers want. We already have strong competition in broadband; fully adding the telcos would make that competition even stronger, to the benefit of consumers.
Oh, and by the way, you probably shouldn’t drive with an uncaged bear in your car. That legacy regulation actually might have made sense.
Boucher served in the House from 1983 to 2011 and chaired the Energy and Commerce Committee’s Subcommittee on Communications, Technology and the Internet. He is honorary chairman of the Internet Innovation Alliance and leads the government strategies practice at the law firm Sidley Austin.
Source URL: http://thehill.com/opinion/op-ed/224452-uncaged-bears-and-rotary-phones
Section 706: A Rare Tech Policy No-Brainer
by Larry Irving and Rick Boucher
Those seeking to impose new regulations on broadband providers offer a seemingly simple approach: Just have the Federal Communications Commission shift broadband Internet regulations from an existing section (Title I) of the Communications Act to another provision (Title II). What’s the danger? Can’t the regulators protect this vital 21st Century technology on which so much of our economy and daily lives depend?
Unfortunately, it’s not so simple.
All participants are in violent agreement on the fundamental need to preserve and protect the open Internet. Everyone agrees that broadband providers should not become content gatekeepers. That’s been clear since 2010 when the FCC initiated its inquiry into how best to maintain an open Internet. Moreover, the facts make clear that the underlying success of the Internet in the two decades since its commercialization has been based on light-touch federal regulation and private sector, commercially-negotiated arrangements among service providers that have led to very few real complaints about supposed “gatekeepers.”
Under section 706, the FCC could prohibit so-called “paid prioritization” anytime such a practice has the effect of slowing down content or degrading the quality of service that any broadband customer receives, and which represent the alleged potential harms that lie at the core of the concerns expressed by activists urging Title II reclassification.
This fall’s intense debate is not about whether to preserve an open Internet. It’s about which of two available approaches the FCC could use is best.
Should the FCC use an axe (Title II) or a scalpel (Section 706) to advance the public interest in a continued vibrant and robust Internet?
There is no real dispute regarding the FCC’s vital role in ensuring that the Internet remains open. The U.S. Court of Appeals for the District of Columbia Circuit said as much in its decision earlier this year in upholding the FCC’s authority to act under Section 706 of the Telecommunications Act.
The FCC’s powers under Section 706 are real and far-reaching. For example, under its “commercial reasonableness” standard, the FCC could prohibit so-called “paid prioritization” anytime such a practice has the effect of slowing down content or degrading the quality of service that any broadband customer receives, and which represent the alleged potential harms that lie at the core of the concerns expressed by activists urging Title II reclassification. In short, the use of section 706 authority to maintain an open Internet would seem to be a complete answer to the Title II activists’ complaints.
Section 706, however, would not extend to things like price regulation, entry and exit from a market, or other types of intrusive Title II regulations that date from the era of copper wire, single-provider telephone service and that are wholly inappropriate for the era of broadband competition. Unlike Title II, Section 706 also would not pose a potential danger of extending unnecessary regulation to the Internet edge companies who offer services that take the place of traditional phone service and that consumers use every day (think Skype, FaceTime and a wide range of applications that involve videoconferencing). And, most importantly, treatment under section 706 would not carry the huge amount of regulatory and litigation uncertainty that would attend Title II reclassification, leading to an inevitable dramatic decline in the willingness of broadband providers to invest in next-generation networks.
Some Title II proponents now contend that the FCC could move forward with a “Title II lite” approach—that is, carry over to broadband Internet access services only certain portions of Title II regulation and allow the FCC to “forbear” from applying certain Title II rules at the outset. Such an effort would be subject to an exceptionally long, heavily lobbied and litigated proceeding, and would face a serious legal challenge, given how one court has already explicitly warned the FCC of the dangers of modifying its forbearance approach. And, in the meantime, the overhang of legal uncertainty will harm the broadband industry, depressing investment and thus delaying the faster, better broadband everyone wants.
Proponents of Title II, no less than their opponents, sincerely desire more broadband for everyone. Then why support a path that leads to less investment to deliver that broadband? In fact, the existing light-touch regulatory approach endorsed by the FCC for well over a decade has made possible the very explosion of broadband, in both reach and speed, which has made America a world leader, far outpacing Europe. An abrupt switch to Title II regulation would endanger that process, essentially freezing the investment on which innovation depends.
Section 706 gets us to the place everyone wants: an open Internet that is innovative and favors investment. The court gave the FCC an open door to promote the open Internet. Let’s take it and end this debate so that the doors of broadband investment and innovation will remain wide open as well.
Larry Irving is a former U.S. Assistant Secretary of Commerce. He currently is the CEO of the Irving Group, a consulting firm that provides advisory services to technology and telecommunications companies. He also is co-chairman of the Internet Innovation Alliance, a nonprofit advocacy group that includes telecommunications companies.
Rick Boucher represented Virginia in the U.S. House of Representatives for 28 years and chaired the Subcommittee on Communications and the Internet. He leads the Government Strategies Group at the law firm Sidley Austin LLP, which represents communications companies, and is honorary chair of the Internet Innovation Alliance.
Originally published at Bloomberg Law: http://www.bna.com/section-706-rare-n17179911495/
Net neutrality: FCC should first do no wrong
by Larry Irving
“First, do no harm.” That phrase generally associated with the medical profession has been the operating philosophy for America’s Internet regulators for more than two decades. The philosophy has benefitted consumers and innovators greatly. Silicon Valley continues to generate new products, new businesses and new strength in old companies—its entrepreneurial spirit is the envy of the world.
With the digital economy and digital innovation continuing to flourish, government regulators should continue to question the impact of regulation.
This week, President Barack Obama asked the FCC to reclassify consumer-based Internet service as a Title II service under the 1934 Communications Act, essentially equating broadband to old copper wire telephone service. Such a regulatory approach would mimic oversight designed for a 19th century monopoly service.
At issue, however, is how to best to preserve an “open Internet”. No one opposes this vital concept. The battle is over how best to ensure the continuation of what has been deemed “net neutrality”.
The Title II path presents several potential harms. First, and most dangerous, is the harm to innovation. A light-touch regulatory environment has advanced ideas birthed in the valley. Introducing outmoded regulations on entrepreneurial business models in the tech sector could hurt the pace at which we’re seeing new start-ups, technologies, and products emerge.
A system of having to ask “Mother, may I?” of government would naturally introduce a chilling effect, as companies of all sizes would start wondering whether they or their product would be regulated. Would their products have to change to comply with regulation? Or would it be better to not introduce products to avoid regulation?
Second, Title II raises a panoply of requirements, such as for entry and exit, just as it did for monopoly telephone service. Section 251 of the Telecommunications Act, for instance, concerns telephone interconnection, but Netflix is trying to use this provision to assert a supposed violation of net neutrality regarding its broadband video traffic. The list of potential negative consequences is long. In a well-working, Internet Protocol-based world of private commercial negotiations, why would it be in our interests to superimpose a telephone model with layers of federal and state regulations?
That gets to a third point. Reclassification would lead to an alarming sense of uncertainty. Some contend that Title II can apply to certain companies but not to others, or to specific activities but not to others. Yet to whom would it apply, and how, and why? And who gets to decide that? Uncertainty in any marketplace means less investment, and Silicon Valley would be no exception.
Prompted by the dynamism of Silicon Valley, the United States has been a staunch proponent of promoting an open Internet, free from government controls, around the world. Reversing course now and switching to a government-based regulatory model for the Internet could undermine that goal and empower nations who most oppose a free and open Internet to attack our credibility. Reclassifying broadband Internet under Title II runs counter to our nation’s, and the valley’s, heritage of Internet innovation with minimal government intervention. We can and must preserve the open Internet without the regulatory and economic risks that Title II would bring.
First, do no harm. Our Internet-driven innovations remain the envy of the world. Why would we change course?
Originally published at the San Jose Mercury News.