Internet Regulation: How About This Ad Hominem?
The New York Times starts its commentary on proposed Internet regulations with a clever ad hominem argument: “The Republican attack on the Federal Communications Commission’s proposal to classify broadband Internet access as a telecommunications service sounded a lot like the G.O.P. talking points on health care reform.”
The GOP are being like themselves. Accordingly, Times readers should think their viewpoint is yucky. It’s not the most substantive argument you’ll come across today.
There are good reasons not to encumber the Internet with regulations designed for the telephone system. Here are four: The Internet is not like the telephone system, and the FCC doesn’t have the institutional ability to manage a changing, competitive system of networks. Extending “universal service” telephone taxes to the Internet will drive down adoption and frustrate universal service goals. The FCC is subject to capture by the very interests from which the Times thinks regulation would “protect.” The Internet’s large cadre of technologists and active consumers will do a better job than the FCC of protecting consumers’ interests.
But ad hominem is more fun. So let’s ask why the New York Times didn’t disclose that, as a content provider, it has a dog in the fight? Net neutrality regulation would act as a subsidy to content providers like the Times, ultimately paid by consumers as higher prices for Internet access.
Larry Downes on Internet “Reclassification”
A few weeks ago, the Court of Appeals for the D.C. Circuit rejected the FCC’s claim of authority to regulate Internet service. That was good news—and it sure didn’t create a crisis. It meant that the FCC would have to get authority from Congress if it wanted to regulate the Internet.
But a little hiccup in that plan quickly emerged: Congress won’t let the FCC regulate the Internet. Bills to do that have been floating around Capitol Hill for years, and they’ve never gotten traction.
So the proponents of government-controlled Internet access services have worked up an end-run around Congress: They want the FCC to try to reclassify Internet access from an unregulated “information service” to a “telecommunications service,” subject to common carrier regulation, like the monopoly phone system used to be (. . . and still is, generations after the monopoly ended).
Well, Larry Downes has been kicking the “reclassification” idea up and down the field. To relax, he’s been jumping up and down on ”reclassification.” Recently, Downes had a dream in which he took out a gun and shot “reclassification.” When he awoke, he did not apologize.
I recommend reading his post on the TechLiberationFront blog.
On Net Neutrality Regulation: Suppose Free Press Called a Crisis and Nobody Noticed?…
In the wake of today’s ruling in the D.C. Circuit that the FCC had exceeded its authority in attempting to regulate access to the Internet, I did a number of radio interviews and a radio debate with Derek Turner of Free Press, a leading advocate of Internet regulation.
The debate was a brief, fair exchange of views. I was struck, though, to hear Turner refer to the situation as a “crisis.” Sure enough, in a Free Press release, Turner says three times that the ruling creates a “crisis.”
Recall that in 2007 Comcast degraded the service it provided to a tiny group of customers using a bandwidth-hogging protocol called BitTorrent. Recall also that before the FCC acted, Comcast had stopped doing this, relenting to customer complaints, negative attention in news stories, and such.
In the wake of the D.C. Circuit ruling and the crisis it has created, Internet users can expect the following changes to their Internet service: None.
Wow. With crises like these, who needs tranquility?
“As a result of this decision, the FCC has virtually no power to stop Comcast from blocking Web sites,” the release intones.
That would be worrisome, though still not quite a crisis—except that Comcast would be undercutting its own business by doing that. Did you know also that no federal regulation bars people from burning their furniture in the backyard? That’s the same kind of problem.
As Tim Lee points out in his paper, “The Durable Internet,” consumer pressures are likely in almost all cases to rein in undesirable ISP practices. Computer scientist Lee presents examples of how ownership of communications platforms does not imply control. If an ISP persists in maintaining a harmful practice contrary to consumer demand—and consumers can’t express their desires by switching to another service—we can talk then. The focus should be on increasing competition by freeing up spectrum and removing regulatory barriers.
In the meantime, this “crisis” has me slightly drowsy and eager to go outside and enjoy the spring sunshine.
The Executive Summary of the Executive Summary
In a highly symbolic gesture, the Federal Communications Commission published the executive summary of its “National Broadband Plan” in one of the most opaque formats going: It’s a PDF scan of a printed document.
This means you can’t cut and paste the bullet point that says:
“Increase civic engagement by making government more open and transparent, creating a robust public media ecosystem and modernizing the democratic process.”
Can an agency that publishes documents in inaccessible formats be relied on to deliver transparency? Did you know that this is Sunshine Week?! Let’s segue from symbolism to substance . . .
That bullet and the many that accompany it explode the FCC’s proper authority and propose an industrial policy fit for . . . well, the industrial age—not that industrial policies were any good then.
The executive summary is 56 bullets broken into four sections, and six “goals” carefully crafted to avoid measurement with nebulous concepts like “affordable.” (We all want it, but affordability is subjective. Nothing is universally “affordable” while it bears a price tag.)
The one goal that is measurable is telling in its own way:
“Goal No. 6: To ensure that America leads in the clean energy economy, every American should be able to use broadband to track and manage their real-time energy consumption.”
(Why should it take broadband to monitor your energy consumption? Does the FCC plan to send out scanned PDFs of photos of your electric meter?)
Whether we should have a network-managed energy system or not, note how the Federal Communications Commission’s “broadband” plan would make it a player in the energy business. It would also be a player in health care. And education. And “economic opportunity.”
As to the latter, maybe the FCC has a leg to stand on. Expanding the current “universal service” tax-and-subsidy scheme would provide economic opportunity of a sort to the better lobbied firms in the telecommunications industry.
As I wrote before, in an even more summary way, “The Federal Communications Commission should be shuttered.” That’s still the gist of what I have to say about the “National Broadband Plan.”
The National Broadband Plan Is Bad. Period.
I’ve seen plenty of stories and gotten a fair number of calls from reporters about the national broadband plan. They generally want to get some insight from down in the weeds of the communications world. What do you think of this part? What do you think of that?
But I’m keeping my eye on the ball: This is another industrial-policy boondoggle. It’s a government spending program, created by the so-called “Recovery Act,” that will distort the communications marketplace, and it comes at the cost to taxpayers of having their resources taken from them and handed out to the firms that are best equipped to lobby for government succor.
I don’t care which community gets 1-gigabit connections. The money to pay for it should have been left with the American people to spend as they choose—on 1-gigabit connections if they choose. The debt overhang produced by all this spending makes us worse off, not better off, and the shiny bauble of hi-def, two-way video doesn’t change that.
The Federal Communications Commission should be shuttered. That’s the gist of what I have to say about the “National Broadband Plan.”
Net Neutrality Regulation: Consequences for Investment and Consumer Welfare
The American Consumer Institute has released a collection of essays addressing the likely consequences of ”‘Net Neutrality” regulation for investment in broadband and for consumer welfare. These are important things to consider, in case it needs saying.
How Did the FCC Come to Acquire This Power?
Jeff Eisenach and Adam Thierer have a great essay in The American honoring the 50th anniversary of Ronald Coase’s article “The Federal Communications Commission.” It’s timely given the FCC’s proposal to establish public utility-style regulation of the Internet under the banner “net neutrality,” and it’s a good general warning to Neo-Progressives who “see market failure as the source of most problems, and government as the centerpiece of most solutions.”
‘Net Neutrality’ Regs: Corporate Interests Do Battle
Some people have labored under the impression that “net neutrality” regulation was about the government stepping in to ensure that large corporations would not control the Internet. Now that the issue is truly joined, it is clear (as exhibited in this Wall Street Journal story) that the debate is about one set of corporate interests battling another set of corporate interests about the Internet, each seeking to protect or strengthen its business model. The FCC is surfing the debate pursuing a greater role for itself, meaning more budget and power.
Tim Lee’s paper, The Durable Internet, dispels the idea that owners of Internet infrastructure can actually control the Internet. The preferred approach to “net neutrality” is to let Internet users decide what they want from their ISPs and let ISPs and content companies do unmediated battle with one another to create and capture the greatest value from the Internet ecosystem.
If the FCC were to reduce its power by freeing up more wireless spectrum—either selling it as property or dedicating it to commons treatment—competition to provide Internet service would strengthen consumers’ hands.
Understanding the Consequences of Internet Regulation
In an effort to achieve “network neutrality” online, the FCC is starting to write new regulations for Internet providers. Reuters reports:
U.S. communications regulators voted unanimously Thursday to support an open Internet rule that would prevent telecom network operators from barring or blocking content based on the revenue it generates.
The proposed rule now goes to the public for comment until Jan. 14, after which the Federal Communications Commissions will review the feedback and possibly seek more comment. A final rule is not expected until the spring of next year.
Cato Director of Information Policy Studies Jim Harper appeared on Fox News this week to discuss the FCC decision. “This is governmental tinkering with a market place that is working really well and growing right now,” said Harper. “The last thing we need is to cut that off.”
There are ways to achieve net neutrality without regulation, says Timothy B. Lee:
An important reason for the Internet’s remarkable growth over the last quarter century is the “end-to-end” principle that networks should confine themselves to transmitting generic packets without worrying about their contents. Not only has this made deployment of internet infrastructure cheap and efficient, but it has created fertile ground for entrepreneurship. On a network that respects the end-to-end principle, prior approval from network owners is not needed to launch new applications, services, or content.
…Like these older regulatory regimes, network neutrality regulations are likely not to achieve their intended aims. Given the need for more competition in the broadband marketplace, policymakers should be especially wary of enacting regulations that could become a barrier to entry for new broadband firms.
Congress Shall Make No Law . . . But Regulators Act Anyway
Lovers of free speech should feel their stomachs turn when they look at the actions of the Federal Trade Commission and Federal Communications Commission these days.
Not that they took a sharp turn with the Obama administration, or with the chairmanships of Jon Leibowitz or Jules Genachowski. These are run-of-the-mill bureaucracies, constantly reaching for new powers, nevermind even constitutional limits on the federal government’s authority.
Item 1: Blogger, You’re an Advertiser Now
Via the L.A. Times blog, the FTC issued a guidance document yesterday requiring bloggers who write testimonials about products to disclose large gifts or payments, or they will run afoul of the FTC’s regulations on advertising.
Is that the right thing to do? Yep. Is that an appropriate thing to require in federal law? Absolutely not.
The FTC is putting itself in the business of guaranteeing the veracity of speech and the honesty and straightforwardness of bloggers. “No” means no law abridging the freedom of speech or of the press.
The “protection” in this regulatory scheme encourages consumers to be supine and irresponsible. State law should deal with frauds as they occur. There should be no law barring or limiting paid endorsements — certainly not a federal law.
Item 2: An Establishment of the Press?
Via the Examiner, it probably didn’t occur to the framers of the constitution to bar the government from establishing its own press, so they didn’t do that in the First Amendment. But we’re heading down that road, and the FTC wants to take us there.
In early December, it will hold a “workshop” called ”From Town Criers to Bloggers: How Will Journalism Survive the Internet Age?”
Here’s an idea for a “workshop”: Taking the Budget of the Federal Trade Commission and Giving it Back to Taxpayers.
Item 3: Just a Modest Takeover of the Communications Infrastructure
As discussed here several times before, FCC Chairman Genachowski has proposed to regulate the terms on which Internet service providers supply broadband services to the public. It’s pretty much the same thing as regulating how printing presses work, or the delivery decisions of newspapers.
The federal government is specifically disabled from regulating speech and the press in the constitution. But in various ways the regulators at the FCC and FTC have talked themselves into the role of censor.
Enough of this unconstitutional consumer coddling. It’s time to shut these agencies down and restore the funds that support them to American taxpayers. Now that would be a consumer protection!
An early version of this post collapsed the FTC and FCC together. Author Jim Harper swears he knows the difference and claims he was briefly blinded with rage at unconstitutional government. Jim thanks the Cato@Liberty reader who slapped him around, getting him focused once again on *happily* railing against unconstitutional government.
Preemptive Regulation of the Internet
Julian Sanchez has already done a fine job of assessing FCC Chairman Julius Genachowski’s speech announcing his plan for federal regulation of the Internet. There was nothing really new in it. No substantial problems justifying regulation have emerged, and—Genachowski’s claims to modest aims aside—any ‘net neutrality regulation is likely to be a substantive morass. Says Julian:
[I]t absolutely reeks of the sort of ad hoc ‘I know it when I see it’ standard that leaves telecoms wondering whether some innovative practice will bring down the Wrath of Comms only after resources have been sunk into rolling it out.”
If the FCC goes ahead with regulating the Internet, the public will get a good look at what closed systems are really like. The FCC’s retrograde “Electronic Comment Filing System” doesn’t even allow full-text searches of submissions. This is but one failing the Internet’s engineers all over the country—and not just in big telcos—will run into dealing with the FCC. It’s laughable that this outdated telecommunications bureaucracy is trying to take over the Internet.
A complex array of network protocols and business processes make up “the Internet.” The Internet’s end-to-end architecture is good engineering because it is naturally open, flexible, and conducive to communications freedom. The Internet empowers consumers to fend for themselves, such as in their dealings with Internet Service Providers. When Comcast degraded the Bitorrent protocol, it took just weeks for consumer pushback to end the practice. The FCC opened an inquiry long after the matter was settled.
But some politicians and the FCC’s lawyers think their slow-moving, technologically unsophisticated bureaucracy knows better than consumers and technologists how to run the Internet. The FCC’s “net neutrality” plans are nothing more than public utility regulation for broadband. With federal regulation, your online experience will be a little more like dealing with the water company or the electric company and a little less like . . . well, the Internet!
As Julian said, Tim Lee’s is the definitive paper. The Internet is far more durable than regulators and advocates imagine. And regulators are far less capable of neutrally arbitrating what’s in the public interests than they imagine either.
Who’s Running the American Economy Now?
Who’s the top dog in American business these days? Washington, says the Washington Post:
That’s one of the main themes of this week’s Capital Connection conference put on by the Mid-Atlantic Venture Association. . . . This time, policy wonks and government insiders will also be there.
Reed E. Hundt, former Federal Communications Commission chairman, and Tommy G. Thompson, former Health and Human Services secretary, will be speaking, as will VentureBeat blog author Matt Marshall and GigaOm author Om Malik, two well-known technology bloggers. Washington hasn’t been a frequent stop for them in the past.
It’s just one more sign of the region’s growing clout in the business and technology world. This is where stimulus dollars are doled out, where the economic recovery is taking shape, and where regulations — many of which directly affect businesses — are being crafted and rewritten. Of course, lawyers and lobbyists are getting a great deal of business helping folks find ways to tap into stimulus money. . . .
Companies familiar with the Beltway culture are well-positioned to benefit from the government’s increased role in nearly every sector. . . .
The conference, which is open to the public for the first time, demonstrates the growing nexus between the business community and the government, said Julia Spicer, MAVA’s executive director.
“The spread between the two worlds has tightened a bit,” she said. “The economy is the real focal point” of the conference, “and the government has a definite role in that.”
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