The Progress & Freedom Foundation Blog

How many times can FCC Commissioner Michael Copps declare the Internet dead? Like a fire-and-brimstone preacher bombastically bellowing sermons warning of the impending End Times, Commissioner Copps has made a hobby out of declaring the Internet dead and buried unless drastic steps are taken right now to save cyberspace! The problem is, he's being saying this for the past decade and yet, despite generally laissez-faire policy in this arena, the Internet is still very much alive and well.

His biggest beef, of course, is Net Neutrality regulation--or the current lack thereof. He fears that without such a "Mother, May I" regulatory regime in place, the whole cyber-world is heading for eternal damnation. Echoing the fears of other Internet hyper-pessimists, Copps concocts grand conspiracy stories of nefarious corporate schemers hell-bent on quashing our digital liberties and foreclosing all Internet freedom.

Way back in 2003, for example, Comm. Copps delivered a doozy of a sermon at the New America Foundation entitled, "The Beginning of the End of the Internet." In the speech, Copps lamented that the "Internet may be dying" and only immediate action by regulators can save the day. Copps laid on the sky-is-falling rhetoric fairly thick: "I think we are teetering on a precipice . . . we could be on the cusp of inflicting terrible damage on the Internet. If we embrace closed networks, if we turn a blind eye to discrimination, if we abandon the end-to-end principle and decide to empower only a few, we will have inflicted upon one of history's most dynamic and potentially liberating technologies shackles that make a mockery of all the good things that might have been."

But that's hardly the only such fire-and-brimstone sermon that Rev. Comm. Copps has delivered about the death of the Internet.

Google / Verizon Proposal May Be Important Compromise, But Regulatory Trajectory Concerns Many

Recently, the Washington Post opined that the best way for the FCC to "regulate the Internet" was through a moderate approach, one which places limited authority in the Commission to address behavior that violates long-standing Net Neutrality practices.

The paper notes that Net Neutrality has been "a rule tacitly understood by Internet users and providers alike" for more than a decade. It then mildly rebukes the FCC's proposal to reclassify broadband providers as common carriers - "a move [which] would be a serious step backwards," in their view.

Within this context, the Post sees important compromise in the Google / Verizon legislative proposal, "especially its designation of the FCC as an adjudicatory body such as the Federal Trade Commission rather than one with intrusive regulatory authority."

I continue to be mystified by the contention of some Net neutrality advocates that it is not a form of economic regulation. The reality, of course, is that Net neutrality would ban business models and necessitate price controls. If that ain't regulation, I don't know what is. As Robert Litan and Hal Singer note in their new Harvard Business Review essay, "Why Business Should Oppose Net Neutrality," "Non-discrimination under the FCC's net neutrality proposal means that ISPs cannot offer enhanced services beyond the plain-vanilla access service to content providers at any price." Thus, any type of service prioritization or price discrimination would be prohibited under the FCC's Net neutrality regulatory regime.

As I explained in this earlier essay and in the video below, this would be a disaster for investment, innovation, and consumer welfare. Differentiated and prioritized services and pricing are part of almost every industrial sector in a capitalistic economy, and there's no reason things should it be any different for broadband. As Litan and Singer note, "The concept of premium services and upgrades should be second-nature to businesses. From next-day delivery of packages to airport lounges, businesses value the option of upgrading when necessary. That one customer chooses to purchase the upgrade while the next opts out would never be considered 'discriminatory.'"

And let's not forget, something has to pay for Internet access and investment in new facilities. Differentiated services can help by allowing carriers to price more intensive or specialized users and uses to ensure that carriers don't have to hit everyone - including average household users - with the same bill for service. Why would we want to make that illegal through Net neutrality regulation and the misguided price control schemes of a bygone regulatory era?

There are few things I find more annoying in the Net neutrality wars than the silly assertion by groups like Free Press and other regulatory radicals that "Net neutrality is the Internet's First Amendment." It's utter rubbish as I have documented here many times before. But now Sen. Al Franken is running around sputtering such nonsense, as he did in this recent CNN.com editorial, claiming that "Net neutrality is foremost free speech issue of our time." The folks at CNN invited me to response and below you will find the piece PFF press director Mike Wendy and I submitted.

____________

"Big Government the Real Threat to Internet"

by Adam Thierer & Mike Wendy

In his recent CNN.com opinion piece, "Net neutrality is foremost free speech issue of our time," Sen. Al Franken claims that "our free speech rights are under assault -- not from the government but from corporations seeking to control the flow of information in America."

He alludes to potential corporate blocking of online products and speech and says, "If that scares you as much as it scares me, then you need to care about net neutrality."

Chicken Little, call your office!

Such sky-is-falling scare tactics are all too common in the heated debate over net neutrality regulation, but actual evidence of such nefarious corporate scheming is nowhere to be found. Perhaps that's why Franken resorts to such tall tales.

Moreover, his reading of the First Amendment is at odds with the one most of us learned about in civics class ("Congress shall make no law..."). His would empower regulators by converting the First Amendment from a shield against government action into a sword that bureaucrats could wield against private industry.

Today I appeared on CNBC's "Power Lunch" to debate Net neutrality issues and the specific role of pricing in this debate. [video down below] Specifically, the producers wanted to know whether websites should be allowed to pay a higher fee to allow consumers faster access to their sites or should it be equal for every website. The show was partially a response to the rumors that the may be some sort of deal pending between Verizon and Google about prioritized services. On the program, I was up against Craig Aaron of Free Press. During the discussion I made several points, many of which first appeared in my 2005 essay on "The Real Net Neutrality Debate: Pricing Flexibility Versus Pricing Regulation." Here are the key points I tried to get across:

In a free-market economy, companies should be able to freely set prices for goods and services without fear of government price controls.

This isn't about consumers paying more for basic Internet access or having their connections "slowed down"? This is about whether the government will allow some broadband services to be differentiated or specialized for unique needs, such as online gaming, live event telecasts, secure telepresence conferences, telemedicine, etc.

Differentiated and prioritized services and pricing are part of almost every industrial sector in a capitalistic economy. (ex: airlines, package shipping, hotels, amusement parks, grades of gasoline, etc.) Why should it be any different for broadband?

It's always important to remember that there is no such thing as a free lunch. Something has to pay for Internet access. It doesn't just fall like manna from heaven. Differentiated services may help in this regard by allowing carriers to price more intensive or specialized users and uses to ensure that carriers don't have to hit everyone - including average household users - with the same bill for service. Why should the government make that illegal through Net neutrality regulation?

Heavy-handing tech mandates - especially Internet price controls - could have a profoundly deleterious impact on investment, innovation, and competition. After all, there can be no innovation or investment without a company first turning a profit. We don't want to return to the era of rotary-dial regulated monopoly, in which our choices were few and our services were standardized and rudimentary. We should let our current experiment with facilities-based, head-to-head competition continue.

Video follows below the fold.

Pub Interest Groups Decry Sunlight - Say It's Corrupting FCC Net Neutrality Process

techdirt's hit kind of a new low in the divisive Net Neutrality debate. Mike Masnick writes that the telcos have got their Net Neutrality deal with the FCC because, well, they have some mighty deep pockets, and they're prepared to use them - either for-or-agin the Dems - come election season. Consequently, FCC Chairman Julius Genachowski had no choice but to back down from his Net Neutrality / Reclassification madness and give the big boys what they want.

C'mon, Mike! You make the National Enquirer blush.

The "reporting" follows the well worn meme espoused by the Left that when the going gets tough, and the deal looks like it ain't cutting their way - then blame the "monopolists" for corrupting the process. Good lord, get a new riff already.

Free Press, Public Knowledge, MAP and OIC lobbyists (among other "reformistas") have practically installed themselves at the FCC since day one (I think I saw their cots, bedrolls and toiletries there the other day). To claim that they've been left-out strains credulity (as this FCC blog reveals).

Let's see. They've gotten their lobbying dollar's worth out of the Open Internet / Net Neutrality NPRM; the National Broadband Plan; the Wireless Competition Report; the Third Way Statement; the Third Way NOI; the 706 Report; and have supped at the FCC table throughout the "closed-door" Net Neutrality meetings.

Compromise will happen. It should. This is a highly charged debate that has divided many. The FCC hasn't helped any by trying to avoid the will of Congress, end-running around key court decisions, and attempting to jam an innovation-killing rule down the throats of American broadband consumers.

Though I think the Commission is wrong to try to regulate the Internet through broadband Reclassification, I also recognize that some discussion - possibly one that reaches compromise - should occur.

What I do not think is helpful is the idea, seemingly shared by the public interest groups, that "it's our way or no way; and if you get in the way of that - then you're a corrupt SOB."

Mike, remember the elementary school admonition - "sticks and stones..."? I'll bet the network providers do, and it's helped them keep their eye on the ball to ensure that a reasoned ruling comes out of the FCC.

The opposite would be corrupt - a closed process decided by a small handful of elite, "consumer advocates," impervious to reason, debate or the sunlight of opposing viewpoints. Until this summer, it looked like it was going in this direction. Now, thankfully, the process appears to be more inclusive - one which may result in a more fair outcome for all involved.

Interesting article in the New York Times today about how the radical media activist group Free Press is now working with an organization called The Harmony Institute toward the goal of "Adding Punch to Influence Public Opinion." The way they want to "add punch" is through entertainment propaganda. The Times article notes that Harmony's mission is "aimed at getting filmmakers and others to use the insights and techniques of behavioral psychology in delivering social and political messages through their work." And now they want to use such "behavioral psychology" and "political messaging" (read: propaganda) techniques in pursuit of Net neutrality regulation.

More on that agenda in a second. First, I just have to note the irony of Harmony's founder John S. Johnson citing "The Day After Tomorrow" as a model for the sort of thing he wants to accomplish. According to the Times interview with him, he says the movie's "global warming message [and] rip-roaring story, appeared to alter attitudes among young and undereducated audiences who would never see a preachy documentary." I love this because "The Day After Tomorrow" was such a shameless piece of globe warming doomsday propaganda that it must have even made the people at Greenpeace blush in embarrassment. After all, here is a movie that claims global warming will result in an instantaneous global freeze (how's that work again?) and leave kids scurrying for the safety of New York City libraries until a quick thaw comes a couple of weeks later. (Seriously, have you seen that movie? That's the plot!) So apparently we can expect some pretty sensational, fear-mongering info-tainment from Harmony and Free Press.

But here's what's better: Do you know who produced "The Day After Tomorrow"? Oh, that's right... Rupert Murdoch's News Corporation financed and distributed that movie!! The man that Free Press casts as the nefarious media overlord set to take over all media and program our brains gave us the greatest piece of radical environmental propaganda of modern times. Now, which does that prove: (A) Rupert Murdoch is hell-bent on programming our minds to embrace a sweeping global warming regulatory agenda, or (B) Rupert Murdoch is out to entertain people and make money? If you answered B, congratulations for being a sensible person. If you answered A, then click here now to start giving money to the Free Press!

OK, so let's get back to Free Press and what they are up to with the Harmony Institute (which I originally thought was an online dating site). Free Press apparently hired Harmony to research public attitudes about Net neutrality and how to influence them. Harmony's Johnson tells the Times they got interested in the Net neutrality because Free Press and the Pacific Foundation paid them handsomely to do so. And it appears Free Press got their money's worth.

Praise the Lord and pass the ammunition.

So goes the FCC's stacked "706 Report" on broadband this week, which said that Americans aren't getting broadband in a "reasonable and timely basis," the first negative conclusion since the report's inception.

Using the standard developed in the National Broadband Plan (NBP) - which recommends "that every household in America have access to affordable broadband service offering actual download (i.e., to the customer) speeds of at least 4 Mbps and actual upload (i.e., from the customer) speeds of at least 1 Mbps" - the Commission determined that by this benchmark "broadband remains unavailable to approximately 14 to 24 million Americans." (Not that 14 - 24 million Americans don't have high-speed access, as has erroneously been reported.)

The FCC is building its war chest so that it can justify Lilliputian Internet regulation of network providers. Through a number of recent proceedings, statements and reports - e.g., the Open Internet NPRM, Cellular Competition Report, and "Third Way" NOI - the 706 Report traffics in the same meme: network providers just aren't doing their job, so they must be coerced or shamed into proper "compliance."

Not uncharacteristically, The Free Press heralded the new, rather dour (and now redundant) broadband assessment. Said the lugubrious, special interest lobbyists - "Now that the FCC has taken the first step of acknowledging America's broadband problem, we hope that it will advance policies to reverse this decline though the promotion of real competition and true consumer choice."

I just have to chuckle at this sophomore opinion piece recently penned by the Free Press. Its main memes: Corporations are evil. Do not trust corporations, because they are evil. And, oh by the way, corporations want to control you and the FCC, because...they are evil.

Good golly, we get it.

Julius Genachowski claims his "Third Way" approach to taking over the Internet looks a lot like the benign "wireless model" of regulation.

If it were true, that would be a good thing.

According to Genachowski:

In its approach to wireless communications, Congress mandated that the FCC subject wireless communications to the same Title II provisions generally applicable to telecommunications services while also directing that the FCC consider forbearing from the application of many of these provisions to the wireless marketplace. The Commission did significantly forbear, and the telecommunications industry has repeatedly and resoundingly lauded this approach as well-suited to an emerging technology and welcoming to investment and innovation. In short, the proposed approach is already tried and true.

Presumably, the "wireless model," if applied to the Internet, would spur growth and innovation. But I have a question. In the FCC's NOI, how does the wireless model of "light regulation" apply to, er, the wireless model?

I haven't quite figured out the circularity of that one yet.

Oh, well. Maybe I shouldn't waste my time trying. It seems more apparent than ever that for wireless and wireline broadband service it's not really about regulating "downward" - i.e., deregulating, as is the hallmark of the "wireless model" - but instead, regulating "upward," thus adding regulation.