FCC: Neutralizing competition

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At the risk of wildly over-interpreting the evidence (an occupational hazard among columnists), a pair of recent hires by the FCC suggest chairman Tom Wheeler is gearing up to more aggressively police ISPs’ network management practices, although perhaps not in ways that will leave net neutrality maximalists and Title II fanboys entirely satisfied.

Last week, the commission named University of California, Irvine, computer science professor Scott Jordan as its new chief technology officer, to replace outgoing CTO  Henning Schulzrinne. While CTOs at other federal agencies are often concerned primarily with internal processes and procedures, at the FCC the job is very much part of the policy- making machinery, a point Wheeler underscored by emphasizes Schulzrinne’s policy contributions in his statement announcing the turnover. And Jordan has spent a lot of time thinking about network management policy.

In particular, he arrives bearing some very detailed policy recommendations regarding net neutrality, which he previously spelled out both in his academic work, and in multiple comments filed with the FCC as part of its now-vacated 2010 net neutrality rule-making. The radio-edit version is that Jordan advocates a middle-ground approach to net neutrality that leverages the layered architecture of the internet to ensure a sort of operational neutrality rather than focusing on particular types of services or applications.

Jordan argues for a policy that distinguishes between the network-level layers of the OSI protocol stack (layers 1-3) and the application-centric layers (5-7) and would mandate what he calls an “open interface” between them. Thus, any quality-of-service (QoS) enabling mechanism implemented by an ISP at the network-infrastructure level, such as to improve the performance of its own voice or video services, would have to be made available to other services or applications without unreasonable discrimination.

As Jordan describes it:

Requiring such an open interface can ensure that ISPs are prohibited from refusing to provide enabling Internet infrastructure services to competing application providers in order to differentiate the ISP’s own application offerings, prohibited from providing Internet infrastructure services to competing application providers at inflated prices in order to favor the ISP’s own application offerings, and prohibited from making exclusive deals to provide enabling Internet infrastructure services to certain application providers. It can also ensure that ISPs have the right to apply network management mechanisms that do not threaten a level playing field, and to make arrangements with consumers, application providers, and peering ISPs for Internet infrastructure services in a manner that does not conflict with the above goals.

In Jordan’s view, the layered approach would largely moot the current debate over fast lanes and slow lanes and eliminate the need to define “managed services.”

As a legal matter, Jordan’s approach would likely require classifying the physical and network-access layers of ISP networks as “communication services” under Title II, even if everything above the the transport layer remained as Title I “information services.” So it wouldn’t avoid altogether one of the more contentious elements in the current net neutrality debate. But it would also leave ISPs free to negotiate their own business relationships with other service providers and peers.

Fundamentally, though, it’s an approach that is more concerned with restraining anti-competitive behavior in network management and oligopoly rent-seeking by ISPs (looking at you, Comcast and Verizon) than with the open-access, innovation or free-speech aspects of the current debate.

Unlike the approach of many net neutrality minimalists, however, who argue that current anti-trust law is sufficient to police bad behavior, Jordan’s in an a priori, regulatory approach to constrain bad behavior before the fact rather than relying on slow, often-inconclusive post hoc adjudication.

Another indication of Wheeler’s growing interest in policing anti-competitive network behavior came this week, with the hiring of former Justice Department anti-trust attorney Paula Blizzard as deputy chief of the FCC’s enforcement bureau. Clearly, Wheeler anticipates that competition-related issues will be near the top of the enforcement bureau’s agenda over the next few years.

Neither Jordan nor Blizzard have a vote on the commission itself, of course. So their presence and their prior views, by themselves, are not an indication of how the agency will rule in any particular proceeding. But their hiring comes as the FCC is enmeshed in a series of proceedings that, taken together, offer the chairman an unprecedented opportunity to shape U.S. policy on network management practices.

In addition to the formal net neutrality rule-making, the agency has opened an informal investigation of middle-mile peering practices and is deep into its review of the Comcast-Time Warner Cable merger, the latter a proceeding where Blizzard’s background in anti-trust law will no doubt come in handy (while at DOJ she developed something of a specialty in consent decree enforcement, according to the statement put out by Wheeler announcing her hire, working extensively on the U.S. v. Microsoft, and U.S. v. Oracle cases).

It wouldn’t surprise me if what we end up with. broadly speaking, is a set of rules and conditions designed to encourage and enforce a sort of operational neutrality on, among and between digital networks but that leave plenty of room of business practices to develop and evolve as they will within the marketplace.

And we’ll probably all be back here arguing about it again in a few years.

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