Net Neutrality Redux

The discussion – and misunderstandings – that continue to roil over net neutrality suggests that it is time for another blog on the subject. I have not changed my mind much since I wrote about it before the Commissioner’s vote recently.

But since teaching the issue this summer, for which I assigned Susan Crawford’s book, Captive Audience, and watching the discussion fairly closely, I have deepened my grasp on some of the operative issues.  Perhaps the most overarching observation to make is that this issue is not reducible to one area of law or policy.  That is why it is so thorny.   It involves anti-trust law, corporate law, and administrative law.  The F.C.C. proposal revolves around a basic understanding of the business and technology architecture of the Internet.  And then there is the problem of the institutionalized corrupting influences of lobbyists within Washington and a paralyzed Congress.  I won’t cover all of this landscape.  This is just an ice-berg tip.

People who want an “open and free Internet,” including me, face first and foremost an anti-trust challenge. Unchecked corporate conglomeration in a market economy, theoretically free and competitive but in practice is not, does not serve public policy.  U.S. history has long struggled with this issue, hence, for some obvious examples, the formation of the Interstate Commerce Commission in 1887 to address the lack of competition in railroad practices and the Sherman Anti-Trust Act of 1890 to address unfair trade practices in steel and oil around the turn of the last century.   The Federal Trade Commission, established in 1914, complements these efforts by focusing on deceptive practices.

As a corrective, I enthusiastically call upon both the F.C.C. and the D.O.J. to look into horizontal and vertical consolidation of telecommunications companies where the problem is most acute.  Moreover, herein lies the nexus to “net neutrality.”  Given corporate law, which has its foundations in early nineteenth-century when corporations were the engines of innovation in the nascent U.S. economy and not overbearing incumbents as they are today, telecommunications companies such as Comcast and Verizon must care about their fiduciary obligations to share holders.  They are not designed to be engines of public policy.  And they do not provide it, even though consumers deserve it.  The public looks to the F.C.C. to control the issue, but administrative law, bound by 20th century technology, business practices and law, such as outdated communications categories such as “utilities” and “information services,” is a primitive stroke to address corporate power at this level of lobbying influence. Both the F.C.C. and the D.O.J. should use anti-trust as the means for consumers to have a meaningful voice in this critical area that affects free speech, technical interoperability, broadband deployment, Internet science and innovation.

Unfortunately, there is a big wrinkle in this suggestion: anti-trust law is also outdated.  I therefore also encourage scholars and advocates to take a hard look at how anti-trust functions in the 21st century information economy. Anti-trust laws join a flock of others badly in need of reform to close the gap between their original intent expressed in a late 19th century industrial economy and how well it functions, or not, today.  Ironic that China is using their anti-trust laws as the pretext for moving U.S. companies out of their domestic economy.   If I did not believe that anti-trust for them is a pretext for their own national interests I would suggest their model.  That said, the U.S. should take heed and update anti-trust laws in support of a free market and free speech – neither of which exists in China but is exactly what we expect of our United States.

Until then, the F.C.C. proposal will be limited in its ability to correct the fundamental problems of corporate influence.  Still, this proposal has merit.   It creates “net neutrality” rules, which currently DO NOT exist.  It is something of a perversity that some advocates have criticized this proposal for precisely that! Which brings us the “fast lane” aspect.  Here is where one needs to know something about the technology and business models undergirding the Internet.  Others have written much more eloquently about this subject, so I will summarize by saying only this: until anti-trust upsets the apple cart, the “fast lane” part of the proposal is a battle between Communications and Internet Titans that you and I, as consumers, have almost no voice in and little influence to do anything about it.

If Comcast wants its cut from Google or Facebook’s bulging bank accounts, I could care less.  But I do care that the Googles and the Facebooks of Silicon Valley disingenuously contribute to the misunderstanding and confusion among consumers about this proposal as a way to push back the Comcasts.  To add insult onto injury, if at the consumer level, known as the “last mile,” fast lanes don’t already exist, then what is this “Turbo” option that Time Warner wants me get?

I disagree with those observers who conflate these two issues.  The “fast lane” is a separable issue from net neutrality, even if Google and Netflix and Facebook say that it is not.   As a result, it should get rid of Time Warner’s consumer tricks and Comcast’s or Verizon’s unregulated ability to discriminate in the distribution of content as were the uncontested facts of the two major cases that bore these issues out.  Even if I am wrong about the severability of the “fast track,” with this proposal we have a legal hook with which to fight back.  In the miasma of so much else that is wrong with the law surrounding the Internet in the United States, at least we would have that.