Larry Downes, a TechFreedom Senior Adjunct Fellow and author of Unleashing the Killer App and other bestselling books about the Internet, will testify today on "Ensuring Competition on the Internet: Net Neutrality and Antitrust," a hearing of the Subcommittee on Intellectual Property, Competition and the Internet, U.S. House of Representative's Committee on the Judiciary.
His written and oral testimony dissect the net neutrality rulemaking approved by the Federal Communications Commission in December, 2010. "I share the enthusiasm of all five Commissioners—and not just the three who voted to approve the new regulations—for the Open Internet," Downes writes. "I just don't believe there is any need for regulatory intervention to 'save' this robust ecosystem, or that Congress ever granted the FCC authority to do so." Downes's report details five serious defects in the FCC's Report and Order, including:
- No need for new regulation: "The majority could only identify four incidents in the last ten years of what it believed to be non-neutral behavior," according to Downes. "All four were quickly resolved outside the agency's adjudication processes."
"With no hint of market failure, the majority instead issued what it calls 'prophylactic rules' it hopes will deter any future problems," Downes writes. "All one can say charitably is that the majority is reserving to its future discretion a determination of what practices actually violate the 'spirit' of the Open Internet. It's hard to think of a better example of an 'arbitrary and capricious' decision."
- Failure to Consider Costs of Enforcement: "The majority also failed to consider the costs of enforcing these new rules, which allow any individual to file a formal complaint if it believes some service provider is violating the rules," Downes writes. "The costs of investigation and enforcement are outsourced to the defendants and to the FCC, creating perverse incentives that will generate numerous frivolous adjudications."
- Cynical Lack of Congressional Authorization: "The majority's incantations of outmoded, obsolete, and inapplicable provisions of the old communications law reminds the rest of us just how much progress has been made during the period when the FCC has been unable or unwilling to intervene in the evolution of the Internet platform." The legal argument advanced by the majority tracks closely with those the D.C. Circuit Court of Appeals rejected in the April, 2010 by Comcast case. "This half-hearted effort," Downes said, "suggests the agency has little expectation the rules will survive court challenges that have already begun, and issued the rules solely to get the messy proceedings off its docket."
- Dangerous Nostalgia: "There is no neutral Internet to preserve. There's only one that works," declares Downes, who catalogues at least sixteen types of "inconsistent" network practices the FCC exempted from the new rules. "These 'inconsistencies' reflect important engineering improvements to the Internet's basic architecture in the last fifteen years—when the agency last looked seriously at the technology," he said.
"Exempting these engineering improvements was crucial, but the majority has arbitrarily stopped innovation as of the end of 2010," said Downes. "Now, future enhancements in Internet architecture will require the approval of the FCC, which moves at a glacial pace compared to the Internet. The majority promises to review its new regulations no later than two years from now," Downes said, "but in Internet time, two years might as well be forever."