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Wednesday, April 18, 2007

FCC Opens the Net Neutrality Pandora's Box a Bit More
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If you look back at all the work we have done here on Net Neutrality (NN), it seems to me that the common theme of our collective opposition to regulation is that we just don't know what we're getting ourselves into. No doubt, we're skeptics about most regulatory proposals, but with good reason. Our government does not have a very good track record when it comes to regulating communications or high-technology markets for the purposes of improving consumer welfare. In fact, just the opposite is usually the result. Consumers typically are on the losing end of grandiose regulatory schemes that are suppose to serve "the public interest." As a century's worth of communications industry regulation proved, regulation typically results in stagnant markets, lack-luster innovation and limited consumer choice.

That's why yesterday's new Notice of Inquiry about Net neutrality from the Federal Communications Commission (FCC) has me so worried. It tees up all the questions that we've been asking here for the past few years. The difference is, of course, that now the whole world is going to flood the agency with answers and many of them will entail regulatory action.

Just the way the FCC frames some of the questions in this Notice concerns me, especially in terms of the breadth of what the agency is investigating. Consider how the discussion kicks off:

We seek a fuller understanding of the behavior of broadband market participants today, including network platform providers, broadband Internet access service providers, other broadband transmission providers, Internet service providers, Internet backbone providers, content and application service providers, and others.

My oh my, who isn't under the regulatory spotlight here? I remember when I used to joke about how NN would eventually come to cover just about every company under the Internet sun. And now the FCC is basically confirming that with this Notice! When the FCC asks about the practices of "content and application service providers," does that mean Apple, Google and Microsoft's business practices are going to be scrutinized? Or could "content service provider" be read broadly enough to even include media and entertainment companies? Who knows.

And when the FCC refers to "broadband transmission providers," does that include the likes of Akamai, Limelight Networks, Savvis, Mirror Image Internet and other content delivery bit traffic managers? They are clearly engaged in practices that betray NN principles, and thank God they are because the Internet operates a hell of lot better because of it! (Read this week's excellent Forbes cover story for more details).

There are many other questions raised in the NOI--some quite routine, others quite bizarre [my comments follow the questions]:

* "during times of congestion, do providers prioritize packets for latency-sensitive applications such as voice calls, video conferencing, live video, or gaming? Do providers prioritize packets for safety- and security-related applications such as health monitoring, home monitoring, and emergency calls?" [Geez, I hope they do. What they hell is wrong with that?]

* "Do providers block packets containing child pornography, spyware, viruses, or spam? Do providers offer parental controls that block packets containing sexually explicit material?" [Uh... why is this being debated here?]

* "we ask commenters to describe today's pricing practices for broadband and related services. Do providers charge different prices for different speeds or capacities? Given the greater availability of bandwidth-intensive applications, do providers charge a premium to download a particular amount of content? Do broadband providers charge upstream providers for priority access to end users? Should our policies distinguish between content providers that charge end users for access to content and those that do not? Do providers currently discriminate in the prices they charge to end users and/or upstream providers?" [As I've point out many times before, this is my greatest concern about the specter of NN regulation; that it eventually devolves into old-fashion, command-and-control price regulation.]

* "does the Commission have the legal authority to enforce the [Net neutrality] Policy Statement in the face of particular market failures or other specific problems?" [Hey, when has that ever stopped them before!]

What will come of the FCC's Notice of Inquiry? Only time will tell. But the seeds of a new regulatory regime may have already been planted.

posted by Adam Thierer @ 9:43 AM | Broadband , Communications , Net Neutrality

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This is an interesting battle. Consumers vs. the one agency that is supposed to protect them in this area. Question is, who will win? It's not looking good for the end customer...

Posted by: Richard Martin at April 23, 2007 3:56 PM

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