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Thursday, August 11, 2005

Net Neutrality Mandates After the FCC's Policy Statement
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As policy mavens continue to digest the import of the FCC's decision to adopt a Policy Statement in support of "net neutrality," one question looms: will the Statement make it more likely that broadband providers will be required to give consumers this unfettered use of content, applications and devices? I think the answer to this (admittedly close) question is "probably not."

Certainly, one should not trivialize concerns that, without careful stewardship, a net neutrality Policy Statement could increase the likelihood that a similar mandate will follow. Adopting a policy statement elevates net neutrality from supportive rhetoric or the opinions of individual commissioners to the view of the agency as a whole. Thus, parties may feel (and, indeed, may be) more justified in asking the FCC to take another step and begin crafting enforceable rules.

Moreover, the FCC retains authority to guide some proceedings, such as merger reviews and other license transfers, according to its view of the "public interest." Although it would be difficult for the FCC to base such decisions solely on promoting net neutrality, that policy goal might be one of several it considers and, in any event, parties to the FCC's proceedings may argue the agency should use its discretion in these cases to promote neutrality.

In addition, adoption of a Policy Statement means that proponents of a mandate won't have to speculate quite as much about how (in their view) the FCC's approach justifies a legislative fix. No matter how carefully the Policy Statement is worded, it will give such proponents something more definite in which to poke holes.

But for the moment, it seems unlikely that the Policy Statement will make it any more likely that a net neutrality mandate will be imposed where none has been needed for the past several years. Proponents had already begun to renew their calls for a mandate weeks ago when the Supreme Court issued its Brand X ruling, broadly deferring to the FCC's policy of promoting broadband deployment by shielding it from regulation.

Further, Chairman Martin made clear in his press statement that he believes market forces alone will continue to keep the Internet "open." Assuming he maintains that view, the Policy Statement lays down a marker that may convince many champions of net neutrality (for now) to give up on seeking a mandate from the FCC, rather than from Congress.

The Policy Statement also affords the FCC some political cover from Congress and others; no longer can critics credibly claim the FCC has "done nothing." Indeed, the FCC's action may put more pressure on proponents of a mandate to justify why a policy statement is not sufficient when -- rather inconveniently for proponents -- broadband providers continue to give consumers the openness they want without regulation.

Finally, the Policy Statement appears likely to remind everyone in the debate that consumers need more than net neutrality to reap the full benefits of the broadband Internet. Consumers also need a choice of broadband network, and those networks need to work effectively. By including the goals of network competition and effective network management, the Policy Statement reminds us that a strict net neutrality requirement must be balanced against the need to promote incentives to build networks in the first place and to ensure that the Internet freedom one consumer enjoys does not harm other consumers or their user experiences.

None of this suggests net neutrality fanatics won't continue their campaign or that they won't succeed in the end. From a political economy standpoint, the enduring appeal of a net neutrality mandate is obvious: it furthers the business interests of companies with strong lobbying clout, seems innocuous to the untrained eye, and poses risks to investment and innovation that never can be proven for sure until the damage is already done. And these factors, rather than the FCC's adoption of the Policy Statement, will have the greatest impact on whether consumers eventually suffer the consequences of a mandate, or not.

posted by Kyle Dixon @ 6:05 PM | Broadband , Cable , Capitol Hill , Communications , Innovation , Internet , Net Neutrality , Supreme Court , The FCC , Wireline

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