...to get a better version of this post.
Actually, my colleague Clifford Anderson addressed net neutrality on this blog here. The issue has been getting so much attention recently because of an upcoming Federal Communications Commission vote, which will likely reverse the Commission’s June 2015 reclassification of internet service providers as Title II (of the 1934 Communications Act) telecommunication common carriers.
In internet-speak, “edge providers” (like FAMGA -- Facebook, Apple, Microsoft, Google, Amazon) are contract carriers. They, like a typical market service, provide their content and apps subject to mutual agreement (either with us or, more usually, advertisers). From the beginning of the commercial internet until 2015, this was true of internet service providers, too. Their reclassification as common carriers, however, made ISPs subject to FCC regulation, like telecommunications companies and other public utilities are. The primary stated aim of this reclassification was to ensure access neutrality for online content.
If the December 14th Commission vote goes the way most people expect it to go, ISPs will basically return to the status quo ex ante. Title II will no longer apply to them. Instead, ISPs will again be under the jurisdiction of the Federal Trade Commission, which will again be responsible for pursuing cases to protect consumer privacy and data security, including cases involving fraudulent, deceptive or otherwise unfair and anti-competitive business practices.
Notice, then, that this isn’t a move from public utility-style regulation to no regulation. Rather, the effect will be a shift in the regulatory modus operandi: from a set of prescriptive rules under the FCC, to a framework based on case-by-case enforcement by the FTC to ensure ISP transparency, including transparency about how ISPs handle customers under various service plans.
Which of these regulatory regimes best ensures that internet access is broadly available, and not subject to unreasonable restrictions or abuse of ISP market power in certain areas, is an empirical question. Unfortunately, it’s become a source of ideological hand-wringing, often giving rise to speculations about a dystopian internet future.
One consideration in examining the empirical question is the history of the development of the internet in the period from the 90s to the 2015 reclassification. The most significant tech policy for the early internet was the 1996 congressional update to Title 47 telecom law in Section 230, which carved out significant legal space for an environment of permissionless online innovation.
The early 90s internet was basically just a few big newspapers and a bit of porn (with pics like this taking upwards of 45 frustrating seconds to load). You might check your email or maybe buy a few books (just books!) on Amazon, too, but you’d shortly free up your telephone line and turn on whatever Must See TV (literally must, since streaming options didn’t exist) happened to be programmed viewing at that precise moment. But in this deregulated environment, in the span of only about 20 years, we now have access to an amazingly creative, entertaining, dynamic and connected virtual world that now even extends into meatspace (with Uber, AirBnB, etc., and driverless cars just around the corner). All this happened, of course, without FCC-enforced net neutrality regulations.
Actually, the early 90s internet is a strikingly accurate picture of the worst dystopian fears of net neutrality advocates who want public utility regulation for ISPs. Then, we purchased access to the internet by purchasing access to content centers, like CompuServe or AOL. These ISPs only provided access to their associated content, forum sites and users. The rest of the WWW was blocked. Over time though, and pretty quickly, ISPs have come round to the current model where they provide genuine access, and FAMGA, et al. provide content, apps, and other services.
Again, this happened without public utilities-style FCC prescriptive regulations. Are there reasons to think the pre-2015 environment was a bad basis for internet innovation and access to continue apace?
One worry I have already alluded to concerns limited ISP competition. Most customers have at least two wireline competitors, but some still only have one. ISPs will, if they can, abuse situations where they have market power. They have it, of course, largely because we’re still living with the structure leftover from when local telephone and cable networks were public monopolies.
But this is why we have an FTC -- to address complaints about anti-competitive practices (and, by the way, the FTC doesn’t have legal enforcement authority over Title II public utilities). I think more should be done to promote ISP competition, but in addition to wireline services, there is also competitive pressure from cellular and satellite providers. As long as barriers to market entry are sufficiently low, I would expect this pressure to provide consumers with the internet they want.
Even if these worries are more serious than I’ve credited them, are there reasons to think FCC regulations would address them in ways better than FTC oversight? Would the FCC be a better guarantor of openness and access neutrality? I’m doubtful. After all, one of the FCC’s primary functions is to be a media regulator concerned with content and I’d rather not have the FCC anywhere near internet content. More, it turns out that the open internet rules the FCC devised based on its Title II authority expressly permit ISPs to block, filter and curate content. Finally, if the regulatory structure administered by the FCC is more costly for ISPs than what it takes to satisfy the FTC, then it’s possible companies will have less revenue to devote to infrastructure investments in areas currently underserved.
Look, I’m just a philosopher, not a tech analyst or economist. Some of this might be off (but I’m happy to have a go defending it). I more hope to have convinced you that this is one of those policy debates that’s not about ends, but means. Whatever side of this you’re on, it’s quite probable that the people you’re demonizing want the same things you want.
Department of Philosophy