The Progress & Freedom Foundation Blog

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."

The August 5th issue of The Economist had a compelling cover story entitled "Leviathan, Inc." in which the author notes "[p]oliticians are reviving the notion that intervening in individual industries and companies can drive growth and create jobs." But direct, long-term government management of companies, corporations or, worst yet, entire industries has proven time and again not to be successful.

Simply put, the head of a company makes decisions to maximize the outcome for that company and its owners or shareholders. Any government employee—even one in a role as acting head of a private company—is legally required to make decisions under a far stricter set of guidelines. Guidelines which force the decisions to be made for what is best not for the business they are charged with operating, but for the country as a whole. This is the case even if the decision made by the bureaucrat will result in a 'net negative' to the company and its owners/shareholders.

The article's anonymous author suggests that instead of "pick[ing] winners and coddl[ing] losers," government should improve the environment for all business by reducing regulations, investing in infrastructure, and "encourage winners to emerge by themselves, for example through the sort of incentive prizes that are growing increasingly popular."

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.

Said FCC Chairman Julius Genachowski on May 6th, "The [Comcast] opinion therefore creates a serious problem that must be solved so that the Commission can implement important, commonsense broadband policies..."

I'll say. It's a problem, alright. Yet the chutzpah of the ensuing NOI process - in particular, the FCC asking whether its Net Neutrality workaround to reclassify the transmission element of broadband as a Title II service is worth doing / can be done - doesn't make it any better.

As I touched on last night, I can't say as I was surprised by today's announcement by the FCC to move toward full-blown Internet regulation. Voting along party lines, the three Democratic FCC Commissioners expressed their wholehearted belief that their regulation of the Internet - not de facto marketplace regulation - was the only way to protect consumers and Americans.

The Comcast v. FCC decision should have rebooted the Commission's discredited Net Neutrality ambitions. Yet instead, the FCC appears moving closer toward questionable new rules, using specious authority to get there. Such an exercise in regulatory hubris is truly confounding, especially in light of the facts and a clear consensus that the Internet must remain free from stultifying regulation.

Make no bones about it, the FCC's NOI today will work to regulate the Internet, and poorly at that. It takes a yellowed, dog-eared page from a 19^th Century industrial policy playbook, and seeks to graft that on to the rapidly evolving Internet. Ultimately, it will prove offensive to American consumers, as well as those innovating at the core and edge of America's broadband networks.

No Such Thing As Regulatory Predictability When It's Built on an Illusion of Authority

Tomorrow at the FCC's open meeting, it is expected that the Commission will release an NOI that will seek to implement Chairman Genachowski's controversial "Third Way." Ostensibly, his plan will try to chart a reasonable balance to promote an open Internet, while at the same time keeping it free from regulation. To arrive there, the Commission will likely propose to shear away the underlying transmission component of broadband telecommunications services from ISP / information services, and impose only a "handful" (like a dash of salt, I guess) of common carrier regulations on the former to keep the Internet open for applications, services, content and devices (as if it is not now already).

We do not know what's in the NOI, nor the process toward a rule or ruling. That said, it probably doesn't matter. Call me skeptical, but you don't need to be a mind reader or have a well connected lobbyist to understand that the fix is in. Not letting the facts get in the way of the situation, the Internet, through this NOI, is going to be regulated.