Tag: federal communications commission

FCC to Make Internet Service a Public Utility

Do you want your Internet service provider to operate like the water company or the electric company? Internet access services will be more like these leaden public utilities if the Federal Communications Commission tries one of the more likely workarounds to a D.C. Circuit Court decision today that restricts its authority to regulate.

The story is long and involved—read it in the court’s opinion if you like—but the FCC has sought for years now to regulate broadband Internet service providers something like it used to regulate AT&T, with government mandated terms of service if not tarriffs and price controls. This doesn’t fit the technical environment of the Internet, which allows for diverse business models. Companies that experiment with network management, pricing, internal subsidy, and so on can find the configurations that serve widely varying consumers and their differing Internet needs the best. If government believes in fast lanes and slow lanes, surely Internet service providers could optimize service for movie delivery, video calling, and such, while email arrives a little less speedily.

The court found that the FCC’s plans don’t fit with its classification some years ago of broadband as an “information service,” subject to the light-touch regulation under Title I of the Communications Act. Title II, which applies to “telecommunications carriers,” allows common carrier regulation of the type the FCC is trying to impose. So watch for the FCC to conveniently change its mind and begin pushing for treatment of broadband once again as a “telecommunications service.” This is so it can have more control over the business decisions made by Internet service providers.

We made the case more than five years ago that “ ‘Net neutrality” is a good engineering principle, but it shouldn’t be a legal mandate. Technology and markets surpassed any need for command-and-control regulation in this area long ago. But regulators don’t give up power without a fight. To maintain power, the FCC may try to make Internet service a public utility.

Obama on Record: Supports Internet Regulation

I’m perplexed by the challenge of referring neutrally to legislation moving through Congress dealing with whether or not the government should regulate Internet service. Work with me as I untangle the Standard Federal Obfuscation™ involved here.

The White House has issued a “Statement of Administration Policy” that deals with S.J. Res. 6 (House companion H.J. Res. 37 passed in April.) The bill is a “resolution of disapproval” under the Congressional Review Act. The CRA allows Congress to reject federal regulations for a period of time after they have been finalized. Resolutions like this enjoy expedited procedures in the Senate, making it harder for Senate leadership to stop them moving.

The Federal Communications Commission voted in December to apply public-utility-style regulation to the provision of Internet service. Congress is moving to reject the FCC’s claim of authority using the CRA, and the president has now said he will veto Congress’ resolution that does that.

Well—the obfuscation continues—actually, the Statement of Administration Policy says “[t]he administration” opposes S.J. Res. 6, and, “If the President is presented with S.J. Res. 6, which would not safeguard the free and open Internet, his senior advisers would recommend that he veto the Resolution.”

At some point, it may be an important detail that the president hasn’t promised a veto yet. His advisers have promised to advise him to veto. OK. Whatever. They work for him. It’s a veto threat.

But, but,… Would these regulations safeguard a “free and open Internet”? The statement says, “Federal policy has consistently promoted an Internet that is open and facilitates innovation and investment, protects consumer choice, and enables free speech.” In a sense, that’s true: When the engineers at the Defense Advanced Research Projects Agency created the Internet protocol and when federal policy opened the Internet to commercial use, this made for the open Internet we enjoy today.

But it’s not federal policy driving these values today. It’s the Internet itself—all of us. Tim Lee ably pointed this out some years ago in his paper, “The Durable Internet: Preserving Network Neutrality without Regulation.” The marketplace demands an open Internet. If there are deviations from the “end-to-end principle” that serve the public better, the market will permit them. The Internet is not the government’s to regulate.

Now, some news reporting has things a little backward. Wired’s Threat Level blog, for example, carries the headline, “Obama Pledges to Veto Anti-Net Neutrality Legislation.” Headlines need to be short, but it could just as easily and accurately read “Obama Pledges to Veto Anti-Regulation Legislation” because the question is not whether the Internet should be open and neutral, but who should ensure that openness and neutrality. Should neutrality be ensured by market forces—ISPs responding to their customers—or by lawyers and bureaucrats in Washington, D.C.?

S.J. Res. 6 would reject the FCC’s claim to regulate the Internet in the name of neutrality. It says nothing about whether or not the Internet should neutral, open, and free. Again, that’s not the government’s call.

Did you follow all that? If you didn’t, you don’t need to. Here’s the summary: President Obama has gone on the record: He supports Internet regulation.

Government Control of Language and Other Protocols

It might be tempting to laugh at France’s ban on words like “Facebook” and Twitter” in the media. France’s Conseil Supérieur de l’Audiovisuel recently ruled that specific references to these sites (in stories not about them) would violate a 1992 law banning “secret” advertising. The council was created in 1989 to ensure fairness in French audiovisual communications, such as in allocation of television time to political candidates, and to protect children from some types of programming.

Sure, laugh at the French. But not for too long. The United States has similarly busy-bodied regulators, who, for example, have primly regulated such advertising themselves. American regulators carefully oversee non-secret advertising, too. Our government nannies equal the French in usurping parents’ decisions about children’s access to media. And the Federal Communications Commission endlessly plays footsie with speech regulation.

In the United States, banning words seems too blatant an affront to our First Amendment, but the United States has a fairly lively “English only” movement. Somehow, regulating an entire communications protocol doesn’t have the same censorious stink.

So it is that our Federal Communications Commission asserts a right to regulate the delivery of Internet service. The protocols on which the Internet runs are communications protocols, remember. Withdraw private control of them and you’ve got a more thoroughgoing and insidious form of speech control: it may look like speech rights remain with the people, but government controls the medium over which the speech travels.

The government has sought to control protocols in the past and will continue to do so in the future. The “crypto wars,” in which government tried to control secure communications protocols, merely presage struggles of the future. Perhaps the next battle will be over BitCoin, an online currency that is resistant to surveillance and confiscation. In BitCoin, communications and value transfer are melded together. To protect us from the scourge of illegal drugs and the recently manufactured crime of “money laundering,” governments will almost certainly seek to bar us from trading with one another and transferring our wealth securely and privately.

So laugh at France. But don’t laugh too hard. Leave the smugness to them.

Thinking Through Merger Review

Randy May of the Free State Foundation has a characteristically good post about the AT&T/T-Mobile merger entitled: “The AT&T and T-Mobile Merger: Thinking Things Through.” Among other smart ideas, Randy highlights the competitive game-playing that goes on in the merger review arena:

When considering competitive and market impacts for purposes of merger reviews, observe the extent to which various competitors, often many competitors, mount vigorous campaigns designed to convince the antitrust authorities and the regulators that if the merger is approved there will be an absence of competition. Note the incongruity.

There’s level-headed thinking aplenty in this post from a long-time Federal Communications Commission and telecom-industry watcher. Check it out.

The Government Shouldn’t Try to Manage the Communications Marketplace

Matt Yglesias takes my recent post gathering three links a little too seriously. Beyond their subject matter—the proposed merger of AT&T and T-Mobile—the theme running through the links was that they were all to the TechLiberationFront blog, not that “the federal government should not try to manage the development of the communications marketplace.” My humor is a little odd. Not everyone gets to come along….

But it’s true that the federal government should not try to manage the development of the communications marketplace. So I’ll defend that, and first principles, which Yglesias claims to have reached their limits when it comes to communications.

First, I’ll refine my thesis: the government should not manage the communications marketplace.

What is a “marketplace”? The handiest web dictionary has the following two relevant definitions: “1. An open area or square in a town where a public market or sale is set up. 2. The world of business and commerce.”

To “manage” such a thing [“to take charge or care of: to manage my investments”] would be to have a hand in much or all of it—not just meta-rules about the terms of buying and selling, but what may be sold on what terms, often up to and including price and quality.

Given these ordinary meanings, I think “manage the communications marketplace” has a relatively broad connotation, and the argument that the government should not manage the communications marketplace is easy. The give-and-take of the market is a better way to discover consumers’ true interests and to apportion resources to serve them. For all the effort and smarts they put into it, government regulators are at a serious disability compared to the market’s manifold forces. More often than not, regulators serve the interests of the corporations that are well organized to win their succor, and they nurture their own interests in maintaining and growing power.

If Yglesias holds the contrary view, that the government should regulate the price, quality, and content of communications services, I welcome that debate, including its free speech dimensions. (There’s a “first principle” worth keeping in mind.)

But he actually doesn’t take that position, not openly at least. He says, instead: “The federal government has to have some kind of policy vis-à-vis the electromagnetic spectrum.” From there, management of the entire communications marketplace is a few bootstraps away.

The electromagnetic spectrum is one input into the communications marketplace. Spectrum is a challenging policy area because we are unused to treating it as anything other than a federally controlled resource.

My thinking is not dictated by the choice Congress made in the Radio Act of 1912, though. It’s important to imagine what rules and tools for dividing up radio spectrum might have emerged had the federal government not assumed power over it. I would prefer to try to move in that direction. (I don’t exclude commons treatment of some spectrum as appropriate, btw.) The historical accident that the government presumed to control radio spectrum should not metastisize into government control of communications.

Holding communications policy as close to first principles as we can, including John Locke when we can, is not the same as intoning “government bad, markets good.” But if the two approaches reach a congruent result, so be it.

If Yglesias holds the view that the government should manage the communications marketplace, he should say so forthrightly. One suspects that he wanted to feature the ad hominem insinuated into his short post. (“Of course the Cato Institute isn’t allowed to reach any other conclusion.”) It certainly sells with his commenters! But there are very good reasons to keep the government from controlling the communications marketplace, and there is much work to be done wresting control of spectrum from the government as well.

Voices on the AT&T - T-Mobile Merger

News that AT&T plans a purchase of T-Mobile has brought out a lot of commentary.

On the TechLiberationFront blog, Larry Downes critiqued the emotional reaction of some advocates for government-managed communications.

On the TechLiberationFront blog, Jerry Brito noted how the deal highlights the artificial spectrum scarcity created by the Federal Communications Commission.

And on the TechLiberationFront blog, Adam Thierer catalogued a series of thoughts on various aspects of the merger.

Picking up a theme? That’s right: the federal government should not try to manage the development of the communications marketplace.

Independent Agencies Test Tea Party Mettle

Is there something special about December? Perhaps it’s the spirit of giving that had the Federal Communications Commission voting yesterday to regulate Internet service. At the beginning of the month—December 1st—the Federal Trade Commission issued a report signaling its willingness to regulate online businesses.

No, it’s not the fact that it’s December. It’s the fact that it’s after November.

November—that’s the month when we had the mid-term election. The FCC and FTC appear to have held off coming out with their regulatory proposals ahead of the elections because the Obama administration couldn’t afford any more evidence that it heavily favors government control of the economy and society.

There was already plenty of evidence out there, of course, but the election is past now, and the administration has taken its lumps. It’s an open question whether there will be a second Obama term, so the heads of the FCC and FTC are swinging into action. They’ll get done what they can now, during the period between elections when the public pays less attention.

And that is a challenge to the Tea Party movement, which would be acting predictably if it lost interest in politics and public policy during the long year or more before the next election cycle gets into full swing. Politicians know—and the heads of independent agencies are no less political than anyone else—that the public loses focus after elections. That’s the time for agencies to quietly move the agenda—during the week before Christmas, for example.

So it’s not the spirit of giving—it’s the spirit of hiding—that has these independent agencies moving forward right now. It’s up to the public, if it cares about liberty and constitutionally limited government, to muster energy and outrage at the latest moves to put the society under the yoke of the ruling class. Both the FCC and the FTC lack the power to do what they want to do, but Congress will only rein them in if Congress senses that these are important issues to their active and aware constituents.

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