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."

So, the GAO recently released a report on the wireless industry and found that:

The biggest changes in the wireless industry since 2000 have been consolidation among wireless carriers and increased use of wireless services by consumers. Industry consolidation has made it more difficult for small and regional carriers to be competitive. Difficulties for these carriers include securing subscribers, making network investments, and offering the latest wireless phones necessary to compete in this dynamic industry. Nevertheless, consumers have also seen benefits, such as generally lower prices, which are approximately 50 percent less than 1999 prices, and better coverage.

Now, if you are a self-described "consumer advocate," I would hope the bottom line here is pretty straightforward and refreshing: Prices fell by 50% in 10 years. That alone is an amazing success story. But that's not the end of the story. The more important fact is that prices fell by that much while innovation in this sector was also flourishing. Do you remember the phone you carried in your pocket -- if you could fit it in your pocket at all -- ten years ago? It was a pretty rudimentary device. It made calls and... well... it made calls. Now, think about the mini-computer that sits in your pocket right now. Stunning little piece of kit. It can text. It can do email. It can get Internet access. You can Twitter on it. Oh, and you can still make calls on it (but who wants to do that anymore!)

The point is, this is a great American capitalist success story that everyone -- especially "consumer advocates" -- should be celebrating. So, what does Public Knowledge president Gigi Sohn have to say?

"These trends do not bode well for consumers, despite any benefits of the moment," she told Ars Technica.

Wait, what?

Government Again Behind the Curve: Efforts to Implement Cloud Computing in the Public Sector

Gartner, a leading IT research firm, predicts that "by 2012, 80 percent of Fortune 1000 enterprises will pay for some cloud computing service, while 30 percent of them will pay for cloud computing infrastructure." But there's been far less progress in the public sector, according to recent report released by Vivek Kundra, Obama's Federal Chief Information Officer.

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.

After reviewing the commentary on Judge Stanton's summary judgment ruling in Viacom v. YouTube, I note the lack of substantive defenses of its legal merits. See Viacom Int'l, Inc. v. YouTube, Inc., 2010 U.S. Dist. LEXIS 62829 (S.D.N.Y. 2010) (the "Viacom Opinion"). This Opinion held that because the original founders of YouTube had responded to takedown notices, they were protected from civil liability for copyright infringement by § 512(c) of the Digital Millennium Copyright Act (the "DMCA")—even if they were also intentionally inducing mass copyright piracy like the Defendants in MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005).

But this Opinion will be reversed on appeal for at least two reasons. First, no judge can legally find something so daft as a civil safe-harbor for criminal racketeering lurking in the unspoken implications of the "tenor" of excerpts of legislative history. Second, no judge can legally hold that the DMCA adopted terms that judges used to convey the lack of any knowledge requirement in order to tell judges to impose an "item-specific" knowledge requirement. As singer Katy Perry might put it, unless the DMCA was "a [law] bipolar," it did not use "in" to mean "out" or "up" to mean "down...."

Consequently, the Viacom Opinion is not really a huge win for those who want foreign corporations to be able profit by intentionally inducing mass piracy. Indeed, apart from the usual applause from the usual suspect—and a switch-of-sides at Slate—no one seems to be praising or even defending the substance of Judge' Stanton's legal analysis. And with good reason—it is indefensible.

Despite recent setbacks, now that BP's efforts to contain the Gulf oil spill have become more successful, focus is shifting to clean-up efforts. The best way to generate innovative, effective clean-up methods is to offer an X Prize for developing such a solution.

The X Prize Foundation awards X Prizes of $10 million or greater for specific technological breakthroughs intended to benefit humanity. The organization is considering a competition "to incentivize the development of rapidly-deployable methods for the clean-up of crude oil along our coastlines and within our oceans."

While not finalized yet, this idea is far more likely to yield working results than the 112,000 ideas sent to BP through its own submission process. In BP's case, there is neither an incentive nor a well-framed challenge to interest researchers.

An incentivized competition is, on the other hand, often far superior to traditional research grants and after-the-fact prizes. Breakthroughs in navigation, chemical engineering, aviation and autonomous vehicle navigation have been driven by and, in turn, inspired by competitions like the X Prize.

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.