Weekly Update

Where now for net neutrality?

Federal Communications Chairman Tom Wheeler said in a speech in Washington Thursday that all options remain on the table for how to respond to the federal appeals court ruling throwing out most of the agency’s net neutrality rules, including appealing the decision to the Supreme Court.

As the new FCC boss, Wheeler may feel he has no choice but to defend the agency’s rules, lest he lose the confidence of the FCC rank-and-file. But the rules, as written, really aren’t worth defending, and reading between the lines of Wheeler’s speech, as well as his blog post from earlier this week, he seems to recognize that.

Apart from their dubious legal foundation, the rules simply left too many things unaddressed to be effective. For one thing, the anti-discrimination rule stopped at the last mile, which left open lots of other places for ISPs could discriminate against unfavored content, such as the network peering points to get content onto the last mile. The rules also did not apply equally to wireless networks. In an increasingly mobile-centric world, that made little sense and would become increasingly problematic with time.

That doesn’t mean we need to throw the net neutrality baby out with the Title I bathwater, however. As Chairman Wheeler said in his speech on Thursday, “Using our authority we will readdress the concepts in the Open Internet order, as the court invited, to encourage growth and innovation and enforce against abuse.”

What might that look like? Here’s my two cents:

Leave regulation of ISPs’ market power — and potential abuse thereof — to the antitrust authorities: The problem the FCC was trying to address with its anti-discrimination rule is one of competition, not network regulation. Even if the court had upheld the rule (or if the agency were to reclassify broadband providers as Title II common carriers) common carrier-like content-neutrality rules were never the right tool to address the myriad ways ISPs could abuse their market power.

As it was, the FCC’s rules had to make allowances for “reasonable network management” practices, including the use of bandwidth caps, which can achieve all sorts of anti-competitive, discriminatory effects without having to refer to the content of that traffic. The goal should be to deter and prevent anti-competitive outcomes and abuse of market power by whatever means they occur. Even under Title II, the FCC doesn’t really have the tools to do that. Policing of potentially anti-competitive behavior by broadband providers should be assigned to the Federal Trade Commission, not the FCC.

Encourage video competition by making life easier for over-the-top services: The biggest ISPs in the U.S. are also pay-TV providers, which is why the potential for abuse is so high. While the FCC may lack the authority to require absolute neutrality on ISPs, there’s plenty of precedent for Congress and the FCC acting to encourage competition on the video side, as they did for satellite TV in the 1990s by requiring vertically integrated cable networks to bargain in good faith with satellite services. A similar approach for OTT services could achieve at least some of the goals of net neutrality proponents without actually having to regulate network management practices.

Senate Commerce Committee chairman Jay Rockefeller (D-WV) has introduced a bill to do just that, in fact, by barring “cable, satellite, broadcast, and large media companies from engaging in anti-competitive practices against online video distributors,” ensuring online video distributors have “reasonable access to video programming,” and “limiting the ability of broadband providers to degrade competitive online video services, which maintains online video providers’ pipeline to consumers.”

Regulating video competition rests on much firmer legal ground the regulating broadband network management per se.

Treat access to broadband networks by entrepreneurs and innovators as a consumer protection issue: One of the great fears of net neutrality proponents is that unregulated broadband pipes will become pay-to-play, freezing out startups and minority voices that can’t pay the freight. While the FCC’s authority to prevent that scenario is now in doubt, the agency has the power to act “in the public interest,” while the FTC has the authority to protect consumers specifically. If even one consumer wants to access a given website, application, or (legal) content, service providers could be required under consumer protection laws to make that content available at at least a minimal level of quality.

That wouldn’t guarantee that a startup would immediately be able to offer a competitive level of service as someone who is willing to pay for preferential treatment, it would at least prevent ISPs from picking and choosing who gets access to their network on ideological or competitive grounds. Establishing that principle now, in fact, could go a long way toward ensuring that broadband service remains a la carte and not get overtaken by creeping cable-ization.

Any other suggestions?