Tag: FCC

Net Neutrality and Unintended Consequences

Google and Verizon’s proposed framework for net neutrality regulation has provoked cries of protest from advocates of aggressive regulation at places like Free Press and Public Knowledge. Some of the loudest objections have concerned the distinction between the “public Internet,” which (at least for wireline broadband) would be subject to neutrality requirements, and vaguely defined “differentiated” or “managed” services—presumably things like IPTV or digital telephone service—which would not. This, according to the pro-regulation camp, would amount to a massive loophole that defeats the purpose of imposing neutrality rules. As Public Knowledge writes in their press release:

Thus, it is conceivable under the agreement that a network provider could devote 90% of its broadband capacity to these priority services and 10% to the best efforts Internet. If managed services are allowed to cannibalize the best efforts Internet, whatever protections are agreed to for the latter become, for all intents and purposes, meaningless.

This may be right. But if so, it sounds like a reason to be chary of the whole regulatory project. Neutrality or no neutrality, after all, there are a variety of ways to get digital content from producers to subscribers. Traditionally, the cable running to your home comprised separate dedicated channels for cable TV and broadband Internet traffic—though the trend now is toward a more efficient model where the TV content is also delivered as packet-switched data. If you’d rather watch Jersey Shore from the Jersey Shore, you can stream your video to a mobile device like a tablet or smartphone via Internet, but that’s hardly the only way to get your Snooki fix: There’s also, for instance, Digitial Video Broadcasting Satellite to Handheld (DVB-SH) or Qualcomm’s MediaFLO operating on their own dedicated frequencies.  Imposing neutrality rules on wireless broadband (as the Google/Verizon proposal would not – again, to the dismay of regulation fans) shouldn’t affect these services.

My concern, then, is that if neutrality rules foreclose the possibility of cross-subsidy from the providers of subscription-based video streaming or VoIP services, these alternatives become more attractive. Maybe Netflix or Hulu Plus want to be able to offer a deal where your subscription price includes priority delivery of their packets to your smartphone or tablet, making non-WiFi video streaming feasible even if you haven’t sprung for that kind of top-shelf bandwidth for all your wireless data. If neutrality regulation forbids that kind of deal, even with respect to these kinds of “managed services,” one possible effect is to skew investment away from building out next-gen IP networks and toward these kinds of niche services, which strikes me as inefficient. Indeed, it’s precisely the effect Public Knowledge seems to fear, and there’s no obvious reason to suppose that it’s going to be a big problem within IP-based broadband services, but not affect the choice between alternative modes of digital content delivery.

I should close with the caveat that I haven’t looked very closely at the economics here, so while I think the effect I’ve just sketched is theoretically plausible enough, I couldn’t say with any confidence how significant it’s going to be in practice. That said, given that the case for neutrality regulation seems to rest on a smattering of genuine cases of bad behavior by providers and a whole lot of dire speculation about consumer-unfriendly practices that might emerge, I’ll permit myself a little extra latitude to deal in hypotheticals.

Government Promotion of Broadband? No, Thanks.

A Pew Internet and American Life poll out this week finds: “By a 53%-41% margin, Americans say they do not believe that the spread of affordable broadband should be a major government priority.” Non-Internet users are less likely than Internet users to say the government should prioritize spreading access to high-speed connections.

The federal government spent $7.2 billion in “stimulus” money on the premise that the federal government is supposed to do this kind of thing. And the Federal Communications Commission’s “National Broadband Plan” is premised on the idea that there is supposed to be a national broadband plan. It isn’t, and there’s not.

Much as I love using the Internet for work, entertainment, and social connection, I recognize that people can live perfectly happy lives without it. The invention and growth of the Internet should always be seen as having opened new avenues for people, not as having created a national communications medium in which participation is required to live a full life. Social engineers, stand down: people will use the Internet if they want it, and they won’t if they don’t.

First Amendment 1, Censorship 0

Today, we celebrate a free speech victory in the Second Circuit Court of Appeals in New York.  In the case of Fox Television v. Federal Communications Commission, the three-judge panel struck down the FCC’s indecency policy for being “unconstitutionally vague” and “creating a chilling effect that goes far beyond the fleeting expletives issue” (e.g., stray f-bombs) that was at the heart of this case.

The case was before the Second Circuit after it was remanded by the Supreme Court last year.  Cato adjunct scholar Robert Corn-Revere, acting in his capacity as partner at Davis Wright Tremaine, is lead counsel for co-petitioner CBS.  Bob wrote an article for last year’s Cato Supreme Court Review in which he characterized the case as the first act of many that will in the networks’ fight for free speech.  He also argued a related case before the Third Circuit in February.

It should go without saying that free speech is a bedrock principle of our nation. Unfortunately, it must indeed be said – over and over again – to the FCC and other governmental agencies who wish to quash speech for whatever purported and often arbitrary reasons.  It’s absurd to think that the foundation of the republic is so fragile that the American people must be protected from the random scatological references of Nicole Richie.

Congrats to Bob and the many lawyers on the case for their hard-fought victory today, and we wish them luck in their continuing fights for freedom of speech.

You can read the Second Circuit’s decision here.

Remember, the FCC Is Our National Censor II

Last week, I referred obscurely to “folks wanting to install the FCC as the Internet’s regulator,” cautioning that this same Federal Communications Commission is our national censor.

A friendly correspondent points me to an article in Ars Technica about the demand for speech controls coming from the same groups that want the FCC to control the Internet’s infrastructure, groups such as Free Press, the Media Access Project, and Common Cause.

Is there a parry to the charge that this is a demand for censorship? The signatories to the regulatory filing “respectfully request[] that the FCC … inquire into the extent and effects of hate speech in media, and explore possible non-regulatory ways to counteract its negative impacts.”

The filing does not contain the words “First Amendment” or “free speech.” It means “non-regulatory” the way a cop eyeballing someone and slapping his palm with a billy club is “non-regulatory.”

The FCC is experienced with “non-regulatory” coercion. Hearings in Congress have explored how the agency uses arm-twisting to get what it wants outside of formal regulatory processes. As law professor Lars Noah testified in 1999:

Arm twisting refers to an agency’s use of threats either to impose a sanction or withhold a benefit in hopes of encouraging nominally voluntary compliance with a request that the agency could not impose directly on a regulated entity. This informal method of regulation often saddles parties with more onerous regulatory burdens than Congress had authorized, accompanied by a diminished opportunity to pursue judicial challenges.

An FCC with the power to regulate Internet access services would use it to control Internet content.  There’s no place for the FCC in monitoring or administering speech controls, nor in controlling our communications infrastructure, the Internet.

Remember, the FCC Is Our National Censor

Amid charge and countercharge about who is shilling for whom in the debate over Internet regulation, Peter Suderman has the right focus in a short piece on Reason’s Hit & Run blog. The Federal Communications Commission’s Chairman is claiming that he only wants to regulate the Internet’s infrastructure, but one of his colleagues, Commissioner Michael Copps, is non-denying that he wants to censor the Internet.

There may be exceptions, but it’s usually pretty safe to assume that anytime a politician or bureaucrat dodges a question while calling for “a national discussion about” the proposal at hand, what he or she really means is, “I want to indicate that I support this idea without actually going on record as supporting it.”

The FCC does censorship. It’s unfortunate to see willful disregard of this by the folks wanting to install the FCC as the Internet’s regulator.

Internet Regulation: How About This Ad Hominem?

The New York Times starts its commentary on proposed Internet regulations with a clever ad hominem argument: “The Republican attack on the Federal Communications Commission’s proposal to classify broadband Internet access as a telecommunications service sounded a lot like the G.O.P. talking points on health care reform.”

The GOP are being like themselves. Accordingly, Times readers should think their viewpoint is yucky. It’s not the most substantive argument you’ll come across today.

There are good reasons not to encumber the Internet with regulations designed for the telephone system. Here are four: The Internet is not like the telephone system, and the FCC  doesn’t have the institutional ability to manage a changing, competitive system of networks. Extending “universal service” telephone taxes to the Internet will drive down adoption and frustrate universal service goals. The FCC is subject to capture by the very interests from which the Times thinks regulation would “protect.” The Internet’s large cadre of technologists and active consumers will do a better job than the FCC of protecting consumers’ interests. 

But ad hominem is more fun. So let’s ask why the New York Times didn’t disclose that, as a content provider, it has a dog in the fight? Net neutrality regulation would act as a subsidy to content providers like the Times, ultimately paid by consumers as higher prices for Internet access.

Larry Downes on Internet “Reclassification”

A few weeks ago, the Court of Appeals for the D.C. Circuit rejected the FCC’s claim of authority to regulate Internet service. That was good news—and it sure didn’t create a crisis. It meant that the FCC would have to get authority from Congress if it wanted to regulate the Internet.

But a little hiccup in that plan quickly emerged: Congress won’t let the FCC regulate the Internet. Bills to do that have been floating around Capitol Hill for years, and they’ve never gotten traction.

So the proponents of government-controlled Internet access services have worked up an end-run around Congress: They want the FCC to try to reclassify Internet access from an unregulated “information service” to a “telecommunications service,” subject to common carrier regulation, like the monopoly phone system used to be (… and still is, generations after the monopoly ended).

Well, Larry Downes has been kicking the “reclassification” idea up and down the field. To relax, he’s been jumping up and down on ”reclassification.” Recently, Downes had a dream in which he took out a gun and shot “reclassification.” When he awoke, he did not apologize.

I recommend reading his post on the TechLiberationFront blog.