Today, FCC Chairman Tom Wheeler issued a public statement seeking comment on how best to respond to the D.C. Circuit decision last month striking down the FCC’s 2010 Net Neutrality rules. The FCC has essentially four options: leave the matter to antitrust and consumer protection laws, enforced by the DOJ and FTC; reclassify broadband as a Title II common carrier; enforce Net Neutrality principles entirely through informal case-by-case adjudication; or issue an “enforceable legal standard.”
“As FCC Commissioner Ajit Pai aptly notes, ‘Net neutrality has always been a solution in search of a problem,’” said Geoffrey Manne, TechFreedom Senior Fellow and Executive Director of the International Center for Law & Economics. “There is no evidence whatever that ISPs have ever ‘prevented [innovators] from harnessing the full power of the Internet,’ as Wheeler implies. Antitrust and consumer protection laws already deter anti-competitive behavior. If the FCC does anything, it should address only clear abuses of market power, if and when they arise.”
“Since the FCC seems determined to regulate, a formal rulemaking as the basis for case-by-case enforcement focused on real problems is the best approach,” said Berin Szoka, president of TechFreedom. “Reclassification would be a disaster for consumers. It would take years, produce lengthy litigation, undermine investment, and distract the FCC from the many forgotten objectives of the 2010 National Broadband Plan. Reclassification is also unnecessary. The court granted the FCC vast discretion under Section 706 to regulate all Internet services. A rulemaking is the only meaningful way to focus that discretion, because a mere policy statement would not be legally reviewable.”
“Wheeler acknowledges that the FCC has the authority to issue revised no-blocking and non-discrimination rules consistent with the court’s opinion,” said Manne. “This should put to rest the myth that reclassification is necessary.”
“The FCC should close the door to reclassification altogether,” argued Szoka. “While it has never been politically realistic, given strong opposition from both parties, the lingering possibility casts a shadow of uncertainty on investment, which can only hurt consumers. Worse, the D.C. Circuit’s interpretation of Section 706 opened the Pandora’s Box of FCC regulation of all Internet companies, potentially including copyright enforcement, cybersecurity and even online decency; Commissioner O’Rielly recently said he was ‘deeply concerned’ about the potential to ‘not just to regulate broadband providers, but eventually edge providers.’ Chairman Wheeler should promise not to use Section 706 beyond regulating broadband. But any such promise won’t be binding, so it’s up to the courts or Congress to rein in the FCC’s new power under 706.”
Writing in WIRED immediately after the decision, Szoka and Manne explained the ruling was not the loss for the FCC many assumed, and explained the dangerous implications of Section 706.
“The FCC is right to ask how to promote competition in broadband,” concluded Manne. “But the problem isn’t state laws stopping municipalities from building their own broadband networks. The real problem is that municipalities have made it prohibitively difficult for new providers like Verizon, CenturyLink, Google Fiber and Sonic.net to build competitive private networks. Reducing those barriers could promote competition without putting taxpayers on the hook for government-run broadband.”
Szoka and Manne are available for comment at firstname.lastname@example.org. See TechFreedom’s initial reaction to the court ruling and other work on the Open Internet Order. This week, Szoka commented on Net Neutrality and the Comcast/TWC deal in WIRED and on NPR’s Diane Rehm Show.