The Federal Communications Commission is about to answer the most important question in its 80-year history: Does the agency intend to protect the open Internet, or is it lunging to seize unlimited power over the Web? We’ll find out on Feb. 26 when the FCC votes on “net-neutrality” rules that would treat the Internet like a public utility, with regulators potentially setting rates, terms and conditions for providers.
Meanwhile, the new Congress is maneuvering to change the net-neutrality equation, with hearings in the House and Senate beginning Wednesday. Republicans circulated draft bills on Friday to pre-empt the FCC’s overreaching new rules while still attaining the White House’s ostensible policy goals. Even congressional supporters of net neutrality, wary of increasing FCC power over something as vast and crucial as the Internet, are working to draft an alternative.
While Republicans and Democrats try to work out a deal, FCC Chairman Tom Wheeler should hit the pause button on next month’s vote and let the elected representatives of the American people try to find common ground. At the end of this constitutional process, all sides may be able to claim victory.
For years Washington has debated how to keep the Internet open and free from government or private coercion. Regulation proponents have argued that new rules are needed to prevent Internet service providers, such as phone, wireless and cable companies, from blocking or degrading the online content or applications consumers want. Though no market failure exists, and regulators have never conducted a study to diagnose the alleged potential illness, the FCC has twice tried to impose new rules on the Web. Each time it lost in court.
The tragedy of this debate is that no one, including phone, wireless and cable companies, has ever contested the goals of keeping the Internet open. It has been open and freedom-enhancing since it was privatized in the mid-1990s because it is protected under existing antitrust and consumer-protection laws. Instead, the fight has been over how much regulatory power the FCC should wield.
Mr. Wheeler says the FCC will apply Title II of the 1934 Communications Act—a Depression-era law designed to regulate phone monopolies—to today’s dynamic and decentralized Internet. In November President Obama called for this embrace of Title II—a radical departure from Clinton-era light-touch policies and a clear loser for the Internet and consumers.
Having worked under its mandates for seven years as a senior commissioner on the FCC—and for even longer as a telecommunications attorney—I am all too familiar with Title II’s power and breadth. Bringing down the blunt command-and-control instrument of Title II onto the Internet will cause collateral damage to America’s world-leading tech economy.
As “tech” and “telecom” companies morph to look like each other by deploying their own fiber and wireless networks embedded with software and content to better serve consumers, the contagion of Title II will spread to regulate most such companies under its “mother-may-I-innovate” dictates. The Supreme Court said as much in 2005 with its prescient ruling in National Cable & Telecommunications Assn. v. Brand X Internet Services.
In a report last month the center-left Progressive Policy Institute determined that Title II regulation could trigger state and local regulations, taxes and fees costing consumers “a whopping $15 billion” a year. And that’s “on top of the adverse impact on consumers of less investment and slower innovation that would result.”
Trying to refrain, or “forbear,” from applying most of Title II’s 1,000 heavy-handed requirements while selecting only a few (as proposed by Chairman Wheeler and the White House) will make an FCC order impossible to defend in court because picking and choosing between who gets regulated and who doesn’t will look arbitrary and politically driven to appellate judges.
It’s time to consider a different path—one that leads through Congress—to end the net-neutrality fiasco. Although the legislative process can be perilous, Congress can provide all sides with a way out.
Net-neutrality supporters could achieve their long-sought goals of restating protections for consumers and tech startups; doubly ensuring that Internet service providers could not unlawfully block or throttle content and applications or impose anticompetitive prioritization requirements; and creating congressionally defined enforcement authority for the FCC. They could also enjoy, for the first time, the certainty that a court cannot hand them another loss.
For opponents of new FCC rules, the bills could take Title II off the table; restore regulatory certainty; protect free speech; and create a legal firewall that would protect investment and innovation in the Web’s computer-network infrastructures from more government meddling. This would also send a strong signal to foreign governments and international regulatory bodies that they should not smother the Web with antiquated rules designed in an era when people held their phones with two hands.
The FCC stands at a fork in the road. If the agency rushes down the Title II lane, it will own the consequences—decreased investment in the Internet, a hobbled tech sector and new taxes and fees on consumers. Running in this direction would reveal that having unlimited power over the Internet economy was what the FCC wanted all along.
If the agency takes a different path, however, the FCC can attain its stated policy goals, be protected by legislative certainty, and bask in the glow of achieving statesmanlike bipartisan consensus. The future of the Internet, and America’s digital economy, deserve no less.