Last week’s “Internet Day of Action,” organized by Battle for the Net, underscored that special interests in Silicon Valley, elite advocacy activists, and pro-regulation academics care about one thing – controlling the future of the internet by any means necessary. Yet, while they promised to make their online day of disruption loud and unavoidable, the day actually fell somewhat flat, with even the Associated Press calling the activities “muted.”
Make no mistake, advocating for principles you believe in is a noble and just activity. That is not the issue here. But what is the issue is that the Day of Action and activists’ larger fight in the net neutrality discussion isn’t a consumer-oriented campaign embodying the best interests of Americans and internet innovation. Rather, it’s a waterfall of misleading information that ultimately puts business interests of dominant internet companies over that of consumer choice.
This is a complex issue. So, let’s examine the basics.
Increasingly internet traffic is concentrated with just a few major companies. Netflix, Amazon, and Google (including YouTube) account for more than two-thirds of America’s internet traffic, much of which is spent delivering video entertainment. These companies have a direct line to your home, yet don’t want to build it into their highly lucrative business models to pay for it. In a truly fair and efficient system, these large companies would pay some amount proportional to the traffic they deliver. But in reality, they do nothing of the sort. No wonder they’re for regulations that prevent those types of deals.
Net neutrality as it stands today – which means internet regulation under Title II of the Communications Act – is neutral in name only. It is not fair or efficient. Thankfully, Federal Communications Commission (FCC) Chairman Ajit Pai is looking to balance the scales of the internet ecosystem once again.
Chairman Pai understands just how complex the internet architecture is. In real terms, the internet is now the backbone of many industries and services that rely on connectivity to collect, deliver, and transport data in real time. However, Chairman Pai’s predecessor, Chairman Tom Wheeler, was over-focused on only one segment of this delivery, the so-called “last mile” networks which connect customers and are managed by traditional Internet Service Providers (ISPs). As a result, the Obama administration and former FCC Chairman Wheeler implemented Title II.
This was misguided for multiple reasons.
First, the major internet companies including Google have already built their own private networks, clouds, and content delivery networks that bypass regulators and their standards for non-discrimination. It is here, inside their own private networks, that these large internet companies can manage traffic in non-neutral ways to maximize efficiency and lower costs. As a result, they’ve become increasingly independent of the services of ISPs. So to argue Title II is a necessity to protect their bottom-lines—some of which are larger annually than entire U.S. cities like Chicago and Washington, D.C.—makes just no sense.
Second, Title II is like putting an old engine in a new car. It was created in 1938 to oversee the telephone system of that era. Meanwhile, today’s internet is constantly transforming, innovating, and introducing our world to concepts not even realized a few years ago. To say we are going to regulate it with a rule from nearly 80 years ago is hardly a sensible or logical policy framework.
Third, Title II advocates claim the current regulations protect against potential anticompetitive practices pursued by broadband providers including blocking and/or throttling of online content. However, the Federal Trade Commission (FTC) already has established antitrust regulations that would prevent and/or legally hold accountable these sorts of actions. In fact, the FTC’s long history of competition enforcement is strong –particularly in the tech space. For example, its ongoing suit against Qualcomm shines an important public light on Qualcomm’s alleged licensing abuses in the chipset space that will ensure all innovators can gain fair access to essential technologies. For decades, the FTC has proven itself to be the expert competition enforcement agency with a long track record of protecting consumer interests. Regarding the current Title II debate, this will not change.
Net neutrality is a concept that may have political potency, but it is far removed from the core issues of the internet. If Title II regulations continue to be enforced, a significant advantage will continue to be handed out to companies that already have a dominance in the distribution of content and services over the internet. We must encourage regulators to look at what matters and not to be duped by all the sensationalized hype.