The FCC Doesn’t Have Authority to Regulate the Internet–and Shouldn’t
In the fall of 2007, word emerged that Comcast had degraded the Internet traffic of some customers, whose use of a protocol called BitTorrent interfered with other Comcast customers’ Internet access.
Comcast handled it badly, and sites like TechLiberationFront covered the “Comcast Kerfuffle” extensively. Consumers prefer unfiltered access to the Internet.
By springtime, Comcast had sorted things out and made a deal with BitTorrent to develop a neutral traffic-management protocol.
Four months later, the FCC weighed in, finding that Comcast had acted badly and telling Comcast not to do that again. Today the U.S. Court of Appeals for the D.C. Circuit concluded that the FCC exceeded its authority and reversed the FCC’s order against Comcast.
The court’s decision marks another turning point in the debate over whether the federal government should regulate Internet access services. What’s entertaining about it is that the problem was solved two years ago by market processes—sophisticated Internet users, a watchdog press, advocacy groups, and interested consumers communicating with one another over the Internet.
The next step will be for advocates to run to Congress, asking it to give the FCC authority to fix the problems of two years ago. But slow-moving, technologically unsophisticated bureaucrats do not know better than consumers and technologists how to run the Internet. The FCC’s “net neutrality” hopes are nothing more than public utility regulation for broadband. If they get that authority, your online experience will be a little more like dealing with the water company or the electric company and a little less like using the Internet.
As I’ve noted before, 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 interest than most people realize.
The FCC doesn’t have authority to regulate the Internet. Congress and the president shouldn’t give it that authority.
Open Source and Auto Safety
Tim Lee points to “The Toyota Recall and the Case for Open, Auditable Source Code.”
Knowing how the technology in our cars work is not just a safety issue, but a privacy issue—and maybe even a tax issue.
Mr. Obama, Tear Down This Wall
On his personal blog, Bottom-Up, Cato adjunct scholar Timothy B. Lee compares the Berlin Wall to the wall along the southern border of the United States. There are differences, of course, but important similarities too.
[I]t’s jarring that less than 20 years after one Republican president gave a stirring speech about the barbarity of erecting a wall to trap millions of people in a country they wanted to leave, another Republican president signed legislation to do just that. Conservatives, of course, bristle at analogies between East Germany’s wall and our own, but they seem unable to explain how they actually differ.
Judging by its ‘wall’ policies, the United States appears to value the freedom of Europeans more than Americans.
‘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.
Online Privacy and the Commerce Clause
I fear that with the PATRIOT Act on the brain, I’ve been remiss in continuing the colloquy on behavioral ads and privacy regulation that I’d been having with Jim Harper—who flattered me by responding in a long and thoughtful essay a couple weeks back. Because there’s so much interesting stuff there, I hope he won’t mind if I restrict myself to the first part of his reply here, in the interest of making this all a bit more digestible to those whose fascination with the topic may not be quite as consuming as ours. I’ll consider briefly the constitutional issue Jim raises, and turn to some of the specifics of the issue—and the relative merits of the common law alternative—in another post.
So like every good dorm room bull session, we begin in the weeds of policy and quickly find ourselves breathing the rarefied air of constitutional theory. Supposing for the moment that we thought it were a good idea on policy grounds, would it be within the power of Congress to set ground rules for online advertisers who gather personal data from Web browsers? Recall that there are two particular rules that I’ve said I’d be tentatively open to, but which Jim rejects: a requirement of notice when information is being collected (say via a small link from the adspace to a privacy policy) and a rule establishing that privacy policies are enforceable, so that individual users can sue for damages if a company knowingly violates its stated policy (thus far, courts have not generally found these to be binding). Does this fall within the power to “regulate commerce … among the several states”? I think so. I’ll start with what I hope will be some uncontroversial arguments and go from there.
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.
Eye of Neutrality, Toe of Frog
I won’t go on at too much length about FCC Chairman Julius Genachowski’s speech at Brookings announcing his intention to codify the principle of “net neutrality” in agency rules—not because I don’t have thoughts, but because I expect it would be hard to improve on my colleague Tim Lee’s definitive paper, and because there’s actually not a whole lot of novel substance in the speech.
The digest version is that the open Internet is awesome (true!) and so the FCC is going to impose a “nondiscrimination” obligation on telecom providers—though Genachowski makes sure to stress this won’t be an obstacle to letting the copyright cops sniff through your packets for potentially “unauthorized” music, or otherwise interfere with “reasonable” network management practices.
And what exactly does that mean?
Well, they’ll do their best to flesh out the definition of “reasonable,” but in general they’ll “evaluate alleged violations…on a case-by-case basis.” Insofar as any more rigid rule would probably be obsolete before the ink dried, I guess that’s somewhat reassuring, but it 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. Apropos of which, this is the line from the talk that really jumped out at me:
This is not about protecting the Internet against imaginary dangers. We’re seeing the breaks and cracks emerge, and they threaten to change the Internet’s fundamental architecture of openness. [....] This is about preserving and maintaining something profoundly successful and ensuring that it’s not distorted or undermined. If we wait too long to preserve a free and open Internet, it will be too late.
To which I respond: Whaaaa? What we’ve actually seen are some scattered and mostly misguided attempts by certain ISPs to choke off certain kinds of traffic, thus far largely nipped in the bud by a combination of consumer backlash and FCC brandishing of existing powers. To the extent that packet “discrimination” involves digging into the content of user communications, it may well run up against existing privacy regulations that require explicit, affirmative user consent for such monitoring. In any event, I’m prepared to believe the situation could worsen. But pace Genachowski, it’s really pretty mysterious to me why you couldn’t start talking about the wisdom—and precise character—of some further regulatory response if and when it began to look like a free and open Internet were in serious danger.
Does Congress Know Media Markets Better Than Media Markets Do?
No. But some members of Congress think they do.
In the section of Tim Lee’s “Durable Internet” paper titled Customers Gone Wild: Why Ownership Doesn’t Mean Control, he showed how powerful online consumers are. They can surely decide whether media markets are forming up contrary to their interests, and they can punish providers who get on the wrong side of their demands.

