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The main trouble with the FCC’s net neutrality rules is not their intent, nor their scope. It’s that the rules, as written, don’t really address the problem they’re trying to remedy. They attempt to regulate what is essentially anti-competitive behavior by ISPs, or the potential for anti-competitive behavior, by treating it as a matter of communications law, instead of antitrust law.
The reason is obvious: the FCC does not have jurisdiction over antitrust law but does have jurisdiction over communications regulation. But its a kludge too far. Even if the rules withstand court scrutiny — a big if — the potential for anti-competitive behavior toward online services will remain because ISPs have a lot of tools at their disposal with which to achieve anti-competitive effects without violating net neutrality. Just ask Netflix, or Intel.
Now, Senator Jay Rockefeller (D-WV) has come up with a better way to try to skin the net neutrality cat, by treating it squarely as a competition issue rather than a telecommunications issue. The chairman of the Senate Commerce Committee has introduced a bill that would bar ISPs, particularly those that also traditional pay-TV service, from engaging in “unfair methods of competition or unfair or deceptive acts or practices, the purpose or effect of which are to hinder significantly or to prevent an online video distributor from providing video programming to a consumer.”
The bill goes on to ban certain specific practices, such as the discriminatory use of usage-based billing by ISPs to raise the cost of using Netflix and other OTT services. While it doesn’t specifically mandate no-settlement peering agreements it directs the FCC to conduct a study of the impact that peering disputes are having on consumers’ unfettered access to online video services. It also would bar the use of restrictive covenants in carriage agreements between programmers and ISP-affiliated pay-TV service providers that limit programmers’ ability to license content to OTT services.
There’s a lot more to unpack in Rockefeller’s bombshell of a bill. I’ll discuss some of its other elements in an upcoming weekly update.