FCC Should Pause Before Pushing the Title II Button

Posted by | January 15, 2014 | Broadband Internet | 5 Comments

It’s The Day After the court ruled that the Federal Communications Commission (FCC) cannot treat Internet service providers (ISPs) as common carriers and the Internet is still working. The largest ISPs have already committed to maintaining an open Internet despite the court’s ruling, and there is no reason to believe that will change any time soon. The Internet is not – I repeat, is not – in imminent danger. It is safe to leave the bomb shelter.

Don’t believe the doomsayers who claim the ruling leaves consumers with no protection from ISPs. They are wrong. In the unlikely event that Internet openness is seriously threatened, the government retains authority to intervene. Although the FCC cannot impose common carrier regulations on ISPs, the court held that the FCC has “authority to promote broadband deployment by regulating how broadband providers treat edge providers.” And, to the extent the FCC lacks authority to prevent anticompetitive, deceptive, or unfair practices by ISPs, the Federal Trade Commission (FTC) has such authority.

There is no question that the government has authority to protect Internet consumers and no shortage of government agencies with such authority. The relevant questions are how and to what it extent the government should exercise such authority and which agencies should exercise it. The FCC has been considering these questions for decades and must consider them again more broadly as part of the IP transition. Congress will presumably consider them as well when the Communications Act is updated, and if the FTC had its way, it would exercise its authority over Internet service providers and common carriers alike.

So why are the doomsayers encouraging everyone to “freak out”? Many of these doomsayers weren’t satisfied with the FCC’s net neutrality rules in the first place. Their long-term goal has always been to turn the Internet into a public utility subject to the same Title II monopoly-style regulations that nearly destroyed the railroads and slowed the telephone network’s entry into the Internet era. They see the court’s ruling as another opportunity to persuade the FCC to reclassify broadband Internet service as a telecommunications service subject to such regulation.

We have never treated the Internet like a public utility subject to the full panoply of Title II regulations and the court’s ruling is no reason to start now. Title II wasn’t intended to address the intermodal competition and two-sided market issues presented by today’s Internet. Title II was premised on the theory that communications networks are natural monopolies, a premise that started to erode over fifty years ago. Today most Americans have access to at least six facilities-based networks that provide broadband Internet access services (a “telephone” company, a “cable operator”, and at least four wireless providers). In this competitive environment, consumers would be better served if policymakers were to consider two-sided Internet issues in the broader context of the IP transition and the Communications Act update rather than immediately embark on another one-sided net neutrality crusade.

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