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The FTC takes aim at Amazon, the Net Neutrality debate rages on, and Congress gets closer to finally protecting Americans’ privacy from warrantless snooping.

FTC Reform

The FTC is stepping up enforcement against tech companies. Join us in DC 7/31 to find out what this means for consumers.

Net Neutrality

The FCC received over a million comments on the NPRM regarding Net Neutrality. We filed the longest, most substantive comments on the way out of this intractable debate.

TF’s Latest: FTC reform event Thursday, Net Neutrality, USA Freedom Act, and more

It’s been a busy couple of weeks for tech policy: The FCC received over a million comments on its proposed net neutrality regulations, the Senate unveiled its version of the USA Freedom Act, and the FTC is suing Amazon over the design of its app store.

#FTCReform in the spotlight as the FTC takes aim at Amazon

The Federal Trade Commission’s recent enforcement actions against Amazon and Apple raise important questions about the FTC’s consumer protection practices. Join TechFreedom and the International Center for Law and Economics (ICLE) on Thursday, July 31 at the Woolly Mammoth Theatre Company for a lunch and panel discussion on these issues, featuring Martin Gaynor, current Director of the FTC’s Bureau of Economics, and former FTC officials.  RSVP here and follow the conversation on Twitter.

#NetNeutrality debate continues as FCC reviews public comments

TechFreedom and the International Center for Law & Economics filed joint comments with the FCC, explaining why the FCC has no sound legal basis for micromanaging the Internet—now called “net neutrality regulation”—and why such regulation would harm consumers. See highlights from our filings and our other work on net neutrality.

Here are a few other things we’ve been up to:

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FTC Officials to Speak at Luncheon on the Commission’s Use of Economics

First Apple, now Amazon: Where is the FTC Heading on Digital Consumer Protection? 

The Federal Trade Commission’s recent enforcement actions against Amazon and Apple raise important questions about the FTC’s consumer protection practices, especially its use of economics. How does the Commission weigh the costs and benefits of its enforcement decisions? How does the agency employ economic analysis in digital consumer protection cases generally?

Join TechFreedom and the International Center for Law and Economics (ICLE) on Thursday, July 31 at the Woolly Mammoth Theatre Company for a lunch and panel discussion on these important issues, featuring Martin Gaynor, current Director of the FTC’s Bureau of Economics, and former FTC officials.  RSVP here.

FTC Commissioner Joshua Wright will present a keynote address explaining his unprecedented dissent in Apple and his approach to applying economics in consumer protection cases generally. Geoffrey Manne, Executive Director of ICLE, will then present a paper on the role of economics in the FTC’s consumer protection enforcement. Berin Szoka, TechFreedom President, will then moderate a free-flowing conversation featuring:

  • Martin Gaynor, Director, FTC Bureau of Economics
  • David Balto, Fmr. Deputy Assistant Director, FTC Office of Policy and Evaluation
  • Howard Beales, Fmr. Director, FTC Bureau of Consumer Protection
  • Pauline Ippolito, Fmr. Deputy Director & Acting Director, FTC Bureau of Economics
  • James Cooper, Fmr. Deputy Director & Acting Director, FTC Office of Policy Planning

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Government-Run Broadband Would be a Dismal Failure

Only Congress, not the FCC, Can Preempt State Laws Affecting Broadband Deployment

Yesterday, Chattanooga, TN and Wilson, NC filed petitions to the FCC requesting that the Commission overturn state laws restricting the expansion of their municipal broadband networks. But overturning these laws to enable government-run broadband would needlessly cost taxpayers millions of dollars, without actually delivering a better product than what’s possible with increased private competition.

“Americans want faster, cheaper broadband and, yes, more choices, but not government-run broadband — especially not after the revelations of the last year about Internet surveillance,” said Berin Szoka, president of TechFreedom. “Government-run broadband has been a dismal failure.”  Szoka pointed to Provo, Utah, which spent $39 million in taxpayer dollars to build broadband network, only to turn around and sell it to Google for $1 “after realizing that cities aren’t very good at running high-tech networks.”

“The real answer here is making it easier for all private companies to deploy broadband,” Szoka argued.  But some state laws restrict cities from leasing municipal property such as unused fiber or from co-locating servers on municipal property. “Let’s focus on clearing the kind of red-tape that made Verizon give up on deploying FiOS in cities like Baltimore and Boston — and ending the NIMBYism that has stymied Sonic.net’s efforts to deploy fiber in San Francisco, the tech capital of the nation,” Szoka said.  “Even Google decided to exclude ‘The City that Never Stops Complaining’ from its Bay Area fiber plans.”

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Thanks, FTC, but We Don’t Need a National Nanny

“Just think about the children!” has always been the rallying cry of hyperactive regulators. Lately, the FTC claimed it was protecting children — well, actually, their parents — by second-guessing how Apple and Amazon designed their app stores. That prompted a scathing dissent from Commissioner Josh Wright, arguing that FTC enforcement action was “neither warranted nor in consumers’ best interest.”

The FTC’s been down this road before. In the 1970s, the FTC ran amuck with its vague power to declare practices unfair. The FTC chairman talked about regulating everything from funeral homes and labor practices to pollution. But Congress — a heavily Democratic Congress — wouldn’t have it. They reined in the agency, forcing it to narrow its conception of unfairness.

The straw that broke the camel’s back was the FTC’s attempt to ban advertising of sugared foods to children. This prompted a 1978 editorial from the The Washington Post, hardly a libertarian bastion, against the FTC’s overreach. That piece marked the beginning of the end of the FTC’s hyper-activist phase — and very nearly led Congress to close the agency for more than just the few days that served as the Commission’s punishment. Now that Congress is starting to look into how the FTC works again, we wanted to share the editorial:

image

Here’s the the original text:

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The Internet Defies Metaphors, so Let’s Stop Using Them for “Net Neutrality”

Is the Internet a highway? Should we “preserve” its “neutrality?” Should we regulate it like the phone system? Or electricity? Or railroads?

“Net neutrality,” a conceptual metaphor, is usually explained with a slew of more concrete metaphors — from grocery shopping to airplane seating. But does this ongoing poetry slam of metaphor one-upsmanship really help?

NPR asked our own Berin Szoka. He responded:

The beauty of the Internet really is that it defies metaphor. It is constantly evolving. It’s hard to put that in a box.

Like the FCC itself, we prefer to talk about “open Internet.” Why? Because “openness” is the least static metaphor one could use. It embraces both the concerns behind net neutrality and the idea that we shouldn’t try to “preserve” the Internet of 2014. As we said in our FCC comments on net neutrality “The Open Internet,”

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FTC Cmr. Wright to Keynote Luncheon on FTC’s Use of Economics in Consumer Protection

FTC Commissioner Joshua Wright will be the keynote speaker at TechFreedom and ICLE’s latest installment in their year-long project “FTC: Technology and Reform,” launched in December. Join us on Thursday, July 31 at the Woolly Mammoth Theatre Company for a lunch and panel discussion on the important questions surrounding the FTC’s latest consumer protection enforcement actions. RSVP here.

Background

The FTC recently issued a complaint and consent order against Apple, alleging its in-app purchasing design doesn’t meet the Commission’s standards of fairness. The action and resulting settlement drew a forceful dissent from Commissioner Wright, and sparked a discussion among the Commissioners about balancing economic harms and benefits in Section 5 unfairness jurisprudence. More recently, the FTC brought a similar action against Amazon, now pending in federal district court.

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Highlights from Net Neutrality Comments Filed by TechFreedom and ICLE

On Friday, TechFreedom and the International Center for Law & Economics (ICLE) filed joint comments with the FCC, explaining why the FCC has no sound legal basis for micromanaging the Internet and why “net neutrality” regulation would actually prove harmful for consumers. Below are some of the highlights from the filing, the longest filed.

The following quotes are from the joint filings:

Proposed regulations would outlaw innovative business models, harming consumers.

  • “A truly open Internet would preserve for all players the right to experiment with innovative content delivery methods and business models.”

  • “It isn’t hard to imagine myriad business models that could be prohibited under a pure net neutrality framework.”

  • “The [economics] literature directly contradicts the assumption that neutrality improves consumer welfare or encourages infrastructure investment. In fact, the opposite appears to be true, and non-neutrality actually generally benefits both content providers as well as consumers.”

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Rubio Bill Would Help Spur Broadband Investment

Cisco estimates that—as global Internet usage triples over the next three years—mobile broadband use will increase 11-fold over the same period. Currently, the government hoards valuable wireless spectrum for its own use, which leaves broadband providers with few options to meet the growing consumer demand for bandwidth.

Senators Marco Rubio (R-FL) and Cory Booker (D-NJ) took an important step toward addressing the spectrum cruch in introducing the Wi-Fi innovation act. The bipartisan effort would open up more spectrum for Wi-Fi services by allowing private citizens to share use of a spectrum band with smart car technologies. While the FCC allocated this band for intelligent transportation technologies years ago, they’ve been slow to take off and, regardless, there’s plenty of spectrum to share.

The bill would certainly help alleviate the spectrum crunch, but its focus on government-private sharing of spectrum could lead to inefficiencies. Gregory Vogt of the Free State Foundation prefers the approach in Rubio’s Wireless Innovation Act, which focuses on licensing spectrum for exclusively commercial use. He explains:

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TechFreedom and ICLE File Joint Comments to FCC in Defense of a Free Internet

Today, TechFreedom and the International Center for Law & Economics (ICLE) filed joint policy and legal comments with the FCC, explaining why the FCC has no sound legal basis for micromanaging the Internet and why “net neutrality” regulation would actually prove counter-productive for consumers.

New regulation is unnecessary. “An open Internet and the idea that companies can make special deals for faster access are not mutually exclusive,” said Geoffrey Manne, Executive Director of ICLE. “If the Internet really is ‘open,’ shouldn’t all companies be free to experiment with new technologies, business models and partnerships?”

“The media frenzy around this issue assumes that no one, apart from broadband companies, could possibly question the need for more regulation,” said Berin Szoka, President of TechFreedom. “In fact, increased regulation of the Internet will incite endless litigation, which will slow both investment and innovation, thus harming consumers and edge providers.”

Title II would be a disaster. The FCC has proposed re-interpreting the Communications Act to classify broadband ISPs under Title II as common carriers. But reinterpretation might unintentionally ensnare edge providers, weighing them down with onerous regulations. “So-called reclassification risks catching other Internet services in the crossfire,” explained Szoka. “The FCC can’t easily forbear from Title II’s most onerous rules because the agency has set a high bar for justifying forbearance. Rationalizing a changed approach would be legally and politically difficult. The FCC would have to simultaneously find the broadband market competitive enough to forbear, yet fragile enough to require net neutrality rules. It would take years to sort out this mess — essentially hitting the pause button on better broadband.”

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