Three questions

I've lost my voice, which is bad timing for the much-looked-forward-to Pulver conference tomorrow.

Here's what I would say if I could say it:

Can the FCC’s course of regulation under Title I of the Communications Act succeed in developing an effective framework to goven the Internet and new communications technologies like VoIP?  Is it either beneficial or likely for Congress to step in with a more detailed and (ideally) more rational strategy?

We seem to be limited in our imagination.  So I’ll start with the unimaginative answer:  The FCC’s current course “under Title I” has been disastrous, unprincipled, ad hoc, and puts enormous weight on some very slender reeds – an administrative housekeeping “necessary and proper” rules statement in Title I (never designed to support legislative rulemaking), and dicta in Brand X.  The world has changed since Southwestern Cable, and, in light of Mead, in the absence of a delegation from Congress the FCC just doesn’t have the power to regulate the internet – particularly in light of Section 230.  It’s just too important a step to be taken based on silence (and conflicting statements) from Congress.

But that’s a statement I can make without imagination, and it doesn’t lead us anywhere.  I only get to leave you with one big idea, so this is it:  I want to persuade us that all of this talk about convergence over the last few years is not true.  Stepping away from interpretation of the 1996 Act itself, it seems to me that telephone services are fundamentally different from the internet, and the notion of carrying particular social policies over from the telephone world to the internet (without taking into account what the internet is) is already proving to be hopelessly wrongheaded, needlessly expensive, and shortsighted. 

The question assumes that we need “an effective framework to govern the internet.”  There’s a lot of law that already applies online, and I have not seen a demonstration that more new law is needed – and, in any event, it’s not the FCC that is in the best position to do it.  If we’re going to depart from the central Section 230 notion that the online world is unfettered by special-purpose federal or state laws, that should be a conscious choice.  Right now, it’s all ad hoc, backwards looking, and unprincipled.  And destructive.  E911 and CALEA certainly fit this description, and I have a feeling that universal service will too when it erupts from the Commission.

We need a sustained national conversation about all this – maybe we’ll end up with this same approach, but I’d like to think not. Why can’t we be both more hopeful and emphatic – take the lead, around the world – about the approach to the internet that we want?  What are the “social policies” that make sense for the online world?  Focusing particularly on universal service, which seems hopelessly corrupt and mismanaged, why not assess a general purpose tax to support broadband access? Devote resources to consumer education and the development of better client-side protections against spyware and spam?  Get law enforcement data streams they need instead of getting them involved in application design?  Work on requiring things that feel like phones to have innovative windows to useful health data (that third party vendors compete to manage and provide) instead of plugging into hopelessly outdated legacy 911 systems? 

What happened to our leadership on internet policy?  When did we lose the ability to walk and slide back into the sea?  We experimented and tugged and pulled and came up with the idea of linking machines together with a common language, making it possible for humans to interact in unprecedented ways.  Now we’re turning those machines back into the machines we thought we were escaping – telephones, cable systems, and televisions – using insiders’ language so that we can hide what’s going on from the general public.  What happened?

What, if any, version of common carriage rules should govern Internet communications platforms?  More specifically, can some concept of Network Neutrality be defined and enforced proactively in the form of prescriptive regulations?

I think this is the wrong question.  It assumes the limited world of online access providers we’ve got, makes them into “communications platforms,” and then suggests we need to make rules about them.  Not very imaginative.  I have lost faith in our ability to write about code in words, and I’m confident that any attempt at writing down network neutrality will be so qualified, gutted, eviscerated, and emptied that it will end up being worse than useless.  Besides, I’m sure there are very good reasons to manage networks, and writing down the difference between management and incremental control of users’ experiences is an impossible task. 

The only way around this issue is to avoid it by encouraging the development of alternative online access methods, and being careful not to let the incumbents call them illegal.  Let the dinosaurs huddle together in the snow, controlling and commoditizing to their hearts’ content.  We’re made of better stuff.  It should be no more illegal to have an open wireless network in your house than to practice the piano with the windows open.  And having an open wireless network can lead to a community mesh network and a host of devices that open immediately to others, connecting us to the world. 

If that’s not possible, then the second best solution is structural separation, paying off the carriers for their stranded costs and moving to open utility platforms.  BT seems to think that’s a fine idea; why couldn’t it work here?
 
As Internet communications platforms become more significant, what types of regulatory strategies—best practices developed by market actors; self-regulatory regimes; agency regulation; or antitrust oversight—are likely to be most effective in governing markets ranging from the Internet backbone (think Cogent-Level 3) to VoIP (think SIP interoperability) to instant messaging (the recent MSFT-Yahoo! Deal) to broadband (i.e., port blocking, preferential treatment, etc.)

I’m not confident that any of the issues listed in the question are actually “problems.”  Nor do I think that the FCC has a role in any of them.  Peering is private, SIP is an open standard, we don’t force private bookstores to share their customer lists (so why treat IM any differently), and network access may require management   If there are problems in any of these areas that are caused by a lack of competition, then let’s use our very broad antitrust statutes to work on them.  But otherwise, we should lead the world by letting our imagination take us forward.  Not every change in the world needs to be addressed by a regulatory strategy, and there’s a very high risk that those who are comfortable with the regulatory world will use levers that are easily available to them to make life uncomfortable for their upstart competitors.

We so easily slide into the notion that the internet is “bad” and needs to be regulated.  We’re cutting off the best of ourselves this way; we should be encouraging it to have a life of its own, to catalyze new ways of living and doing business, and only getting in the way when market control leads to an absence of choices and inappropriately high prices.

One thought on “Three questions

  1. Anonymous

    Hello All,
    In 2002 I wrote an article in Telecommunications Policy entitled Revenge of the Bellheads: how the Netheads lost control of the Internet. The article asserted that as the incumbent telephone companies largely owned and operated the Tier-1 ISPs and the associated transmission networks, they had the power to set Internet commercial policy.
    At some not too distant future date owners of a “one size fits all” IP centric (a bit is a bit) network might have even greater control over what traverses their pipes. In a deregulated or unregulated environment arm's length negotiations do not typically result in unlawful discrimination. Fair enough. But what about anyone–consumers included–who have no negotiation leverage and cannot alter unilateral terms and conditions, including ones that ensure that a telecom pricing model applies where an All You Can Eat Internet model previously applied?
    I agree that Title I of the Communications Act offers a vague and undisciplined outlet for the FCC to remedy “unlawful” discrimination. I also don't think the FCC should engage in price regulation. But if the future IP marketplace is dominated by two players splitting 95% of the market (cable and telco) what prevents Mr. Whiteacre and his Bellhead colleagues from calling the shots from a Bellhead template?

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