Panel #2 at this year's "State of the Net" pre-conference featured a lively debate about net neutrality and investment. It included a debate between Hal Singer of Empiris LLC and Michael Livermore of the New York University Law School. It also featured the comments of Markham Erickson of the Open Internet Coalition and Christopher Yoo of the University of Pennsylvania Law School. The panel was ably moderated by Susan Crawford. Here are some highlights of what proved to be a fun and feisty debate, which began with the comments of Hal Singer:

Hal Singer, Empiris LLC

• FCC wants to constrain pricing flexibility for networks


• Not clear we need price regulation for service delivery in absence of clear market power


• FCC offers novel "collective action" theory to justify regulation, but doesn't make sense and doesn't apply here


• Investment at edge of network will not decline in absence of Net neutrality regulation


• Outlawing priority delivery would discourage investment in new networks AND applications


• "Net neutrality would harm the very folks it seeks to protect"; end users will see price hikes


• Investment at core is crucial

FCC Commissioners Michael Copps and Meredith Attwell Baker kicked off the 2010 Congressional Internet Caucus "State of the Net" conference this afternoon with two brief keynote addresses. Below I've summarized the highlights here from my live Tweeting at the event (@AdamThierer):

Commissioner Copps

• "every great challenge this country faces... has a broadband component at its core if it's going to be successfully dealt with"
• Broadband is the great enabler; Private sector will lead, but national objectives and visionary public policy also have to be at core
• "sins of recent public policy past" got in way of us doing things that needed to get done
• Worries about wider new "divides between us"; have opportunity to close them
• Praises Hillary Clinton's Internet freedom speech from last week
• Hard to conceptualize the changes that next 5-10 years hold in light of the developments of past 5-10
• Worried about open Internet; "unreasonable discrimination"... doesn't want to allow "too much latitude" to private operators... says it is threat to "openness" (he never really defines the term, however)
• Passionate views on both sides of Net neutrality debate
• Need big pipes and more spectrum to grow capacity (I certainly agree on that one! But Net neutrality isn't going to help us much in that regard)
• He fears consolidation
• Says minority and women voices are not getting heard online (he says we should measure it by audience measurements & ad $$ but doesn't bothering mentioning how much wider the gap was in the old mass media era when none of those voices could get heard at all)
• How do we assure what we're doing "actually works for democracy" and the "public interest" (but never defines what that means)
• Says media is failing us today; victims are public; investigative journalism is dying (but never discusses how current FCC regulation affects the equation)
• cites Founders (Jefferson, Madison) re importance of media ... and then favorably cites McChesney & Nichols new book (ugh, someone needs to tell Commissioner Copps that McChesney is a neo-Marxist who wants to destroy all private media providers!)

My latest contribution to the ever-expanding network neutrality literature are comments filed in the Federal Communications Commission's Network Neutrality rulemaking proceeding.  My comments demonstrate that adoption of the network neutrality rules proposed in the NPRM would be unlawful because Congress did not give the Federal Communications Commission authority to protect Internet "openness."

The NPRM, incorporating by reference the jurisdictional theory stated in the Commission's 2008 Comcast P2P Order, asserts that the Commission has ancillary authority to prescribe rules principally under two statutory provisions: to implement the "federal Internet policy" contained in section 230(b) of the Telecommunications Act of 1996 and to achieve the statutory goal of encouraging broadband deployment pursuant to section 706(a) of the Act. It also appears to rely, at least to some extent, on sections 1, 201(b), and 257, and more broadly on whole titles of the Act - II, III, and VI. My comments examine the Commissions' jurisdictional theory in great detail, and conclude that there is simply "no jurisdictional 'there' there." None of these provisions, taken singly or together, provide a legal basis for the Commission to regulate the provision of Internet services.

Last week I commented on a severely one-sided FCC net neutrality hearing that featured a endless parade of horribles being prophesied by virtually every speaker. The litany of spooky stories became tedious and absurd. Everyone foretold of the impending doom that awaits unless government intervenes to save us from various corporate conspiracies to "silence" our voices. Unsurprisingly, evidence was in short supply. It was pure Chicken Little poppycock.

This got me thinking again about what I have referred to as the "problem of proportionality." I have discussed the problem of proportionality in the context of public policy debates about online safety and privacy, but it seems equally applicable to debates about net neutrality. Here's how I explained the "problem of proportionality" in an earlier essay:

let's think about how some of our lawmakers and media personalities talk about the Internet. If we were to judge the Internet based upon the daily headlines in various media outlets or from the titles of various Congressional or regulatory agency hearings, then we'd be led to believe that the Internet is a scary, dangerous place. That 's especially the case when it comes to concerns about online privacy and child safety. Everywhere you turn there's a bogeyman story about the supposed dangers of cyberspace. But let's go back to the numbers. While I certainly understand the concerns many folks have about their personal privacy or their child's safety online, the fact is the vast majority of online transactions that take place online each and every second of the day are of an entirely harmless, even socially beneficial nature. I refer to this disconnect as the "problem of proportionality" in debates about online safety and privacy. People are not just making mountains out of molehills, in many cases they are just making the molehills up or blowing them massively out of proportion.

Again, much the same is true of net neutrality. Indeed, it is even more true since actual net neutrality "incidents" are so hard to come by.

As I noted here a few days ago, the Federal Communications Commission held a workshop on Tuesday about "Speech, Democratic Engagement, and the Open Internet." It was a shockingly one-sided affair with the deck being stacked almost entirely in favor of advocates of Net neutrality regulation. Worse yet, those advocates shamelessly made up spooky stories about a future of "private censorship" that could only be remedied by using the First Amendment as a club to beat private players into submission. The token opposition at this Chicken Little circus was Robert Corn-Revere, a Partner at the law firm of Davis Wright Tremaine LLP in Washington, D.C. Bob set the record straight--both in terms of baseless accusations that were flying that day as well as the revisionist histories of the First Amendment that were being put forward. I'm happy to report that Bob allowed PFF to reprint his remarks as a new white paper entitled, "The First Amendment, the Internet & Net Neutrality: Be Careful What You Wish For."

In his essay, Corn-Revere discusses the relationship between the First Amendment and regulatory policy, particularly the treatment of new communications technologies, and he warns that government regulation of broadband networks could "provide the vehicle for advancing new First Amendment theories for media regulation" and online speech and expression more generally. "It should not be forgotten," he argues, "that the federal government's initial impulse was to censor the Internet and to subject it to a far lower level of First Amendment protection. It pursued this agenda for more than a decade but was blocked by a series of First Amendment rulings." The Communications Decency Act and the Child Online Protection Act are just two notable examples. Luckily, the courts determined that "the open Internet would be at great risk if the government is allowed to exercise such power," he notes, and they struck down such laws.

Today I visited the Federal Communications Commission meeting room to attend a workshop on "Speech, Democratic Engagement, and the Open Internet." Honestly, I think I was stuck in the Twilight Zone, because from what the speakers at this ridiculously one-sided panel had to say: (1) the First Amendment means something entirely different than what the Constitution says; and (2) the whole Internet world is set to go to hell unless government intervenes and saves us a litany of corporate conspiracies to "silence" us.

Seriously, I thought the FCC was trying to make their broadband workshops and Net neutrality proceeding "balanced" and "evidence-based." This one was neither. One speaker after another regaled us with spooky stories and asked us to imagine how their particular group or service would be "blocked" or "silenced" unless Net neutrality regulations were put on the books. But no evidence was offered supporting their scary tales.

By the time Michele Combs of the Christian Coalition got done breathlessly delivering her conspiratorial rant, for example, I half expected her to ask "What would Jesus do?" about Internet regulation. She really laid it on thick, suggesting that ISPs were hell-bent (excuse the pun) on blocking Christian messaging across multiple platforms. Yeah, cause it would be a brilliant business strategy to piss off tens of millions of Christians in this country. Sure, that makes a lot of sense.

One of the more troubling aspects of the contentious debate over Net neutrality regulation is the way some proponents have sought to cast Net neutrality as "the Internet's First Amendment." As a die-hard free speech advocate, I find this truly outrageous and a complete contortion of the true purpose of the First Amendment. As I have argued here before, it is incredibly dangerous thinking that puts our real First Amendment liberties at stake by empowering a regulatory agency with more means of controlling online speech and expression. Simply stated, the Internet's First Amendment is the First Amendment, not some new, top-down, heavy-handed regulatory regime that puts the Federal Communications Commission in control of the Digital Economy.

On this point, I wanted to bring two things to your attention. The first is an outstanding address delivered today by Kyle McSlarrow, President & CEO of the National Cable & Telecommunications Association, at a Media Institute event here in Washington, DC. And the second is this new paper by my PFF colleague Barbara Esbin.

McSlarrow's speech was entitled, "Net Neutrality: First Amendment Rhetoric in Search of the Constitution" and it squarely addressed the fundamental fallacy set forth by the Net neutralitistas when it comes to the First Amendment. "Whatever our present-day policy disagreements about net neutrality, or even differing politics, let's not forget that the First Amendment is framed as a shield for citizens, not a sword for government," he argued. "By its plain terms and history, the First Amendment is a limitation on government power, not an empowerment of government," McSlarrow said. "And... if there's one thing the Supreme Court has made clear, it's that rules that directly restrict protected speech cannot be justified by a government interest that is merely hypothetical."

Absolutely correct. And these views are buttressed by the comments of Barbara Esbin in her new paper, in which she argues that "Net Neutrality is not the First Amendment for the Internet." She continues:

Hmmm... What am I missing? I cannot lay my finger on a single line in the Communications Act of 1934, the Telecommunications Act of 1996, or any statute in between that gives the Federal Communications Commission (FCC) the authority to regulate cloud computing. And yet, like any good stickler for jurisdictional authority, my PFF colleague Barbara Esbin keeps bringing to my attention little FCC chirps here and there which suggest that the agency is slowly positioning itself to become the Federal Cloud Commission. For example, back in September, Barbara brought to my attention this passage in the Commission's recent Wireless Innovation and Investment Notice of Inquiry, (paragraph 60, pg. 21):

As other approaches, such as cloud computing, evolve, will established standards or de facto standards become more important to the applications development process? For example, can a dominant cloud computing position raise the same competitive issues that are now being discussed in the context of network neutrality? Will it be necessary to modify the existing balance between regulatory and market forces to promote further innovation in the development and deployment of new applications and services?

In my earlier essay about this, I noted that these questions should serve as a wake-up call for Google and other cloud-based providers who think that "neutrality" mandates will end at the infrastructure layer of the Net. As Berin Szoka and I argued in our paper on "high-tech mutually assured destruction," regulatory regimes grow but almost never contract. And I'm even less optimistic about the FCC limiting its regulatory aspirations after the latest thing Barbara Esbin brought to my attention.

Today, as part of the Commission's ongoing effort to develop a National Broadband Plan, the FCC released a request for information "on data portability and its relationship to broadband." (NBP Public Notice #21) "The Commission seeks tailored comment on broadband and portability of data and their relation to cloud computing, transparency, identity, and privacy," the notice says. Here was the second item on the list of things the Commission said it was investigating:

The Wall Street Journal reports that "FCC staff also are studying whether to revive 'open access' rules, which would require Internet providers to lease their networks to rivals at government-regulated prices." "Revive" is an interesting choice of words, as it implies that such rules were once alive, but are presently dead, or at least comatose. But in the case of cable Internet service providers, it is simply wrong. Cable modem service, a term the FCC invented for high-speed Internet over cable service, has never been subjected by the FCC to "open access" or, more precisely, common carrier regulation. Not once; not ever.

Scott Cleland wrote a nice little piece on the tendency of net neutrality advocates to re-write Internet history so that the steady movement away from government ownership and control, including economic regulation, during the Clinton Administration is air-brushed out of history. My point is less global, but no less important. The terms, conditions and prices of cable modem service at both the retail and wholesale level have never been subject to regulation.

Instead, the FCC made the conscious decision to classify the service not as a highly regulated common carrier telecommunications service, but rather as a then-unregulated "information service." This decision was made for the purpose of encouraging broadband deployment and permitting such Internet services to be provided in a minimally-regulated environment, and it was upheld by the U.S. Supreme Court in the Brand X case. And, yes, the FCC launched a companion rule-making to consider whether to impose any special requirements on this information service pursuant to its Title I "ancillary jurisdiction. But it has never acted on that proposal. Thus, there is no rate-regulated leasing of cable modem lines for regulators to revive.

But I digress. The real story is that the FCC, for the first time, is seriously considering imposing common carrier-like economic regulation on cable Internet providers, in the context of its charge from Congress to develop a "National Broadband Plan" to increase broadband deployment. Setting that irony aside for the moment, we can, and will, debate the merits and drawbacks of the open access issue for some time to come (and rest assured, it will feel like Groundhog Day for many of us). But let's not start the debate from the false premise that we are just returning to the good old days of yore.

Many writers are coming to question the source of the Federal Communications Commission's authority to regulate Internet service providers' network management practices in the agency's quest to "preserve the free and open Internet" that we all value so highly. I examine this issue my new essay, "Jurisdiction: The $64,000 Question." Once again I conclude that none of the arguments the FCC has advanced to date concerning its "ancillary" authority to regulate the network management practices of broadband ISPs hold water. The Communications Act simply does not authorize the FCC to erect an elaborate regulatory framework for Internet services.

If the FCC is to regulate the Internet -- an outcome I do not think necessary or beneficial -- we would be better served by having Congress debate and pass such legislation, than by having unelected government officials attempt to make it up as they go along.

Express delegations of authority are important for two reasons: they both give power and limit its exercise in ways agreed upon by our elected representatives through duly enacted legislation. The problem with the FCC's conception of its ancillary jurisdiction is that is potentially limitless.

As I write in the essay, unchecked administrative power, no matter how well-intentioned, is dangerous. The doctrine of ancillary jurisdiction, properly understood, permits the FCC only to fill in small gaps in its statutory authority to take account of new developments closely related to the services the agency is authorized to regulate. But the courts have upheld this doctrine only when necessary, if not imperative, to the execution of its expressly granted regulatory responsibilities. The gap between the FCC's proposed net neutrality rules and the statutory provisions the agency claims authorize its action is not small, it is in the vernacular sense of the word, quantum.