Amazon, Google, Facebook and others in the tech world…you’re really going to keep poking on net neutrality?
Some of you seem a tad less enthusiastic about net neutrality than you did before, yet here you are participating in the hyped-up July 12 Net Neutrality Day of Action. It appears to be third-party groups being most vocal.
What happened to the energy?
I’ve always urged that regulators domestically and internationally leave you alone, whether the issued was content regulation, privacy, antitrust regulation (for example) and the like.
Yet many Internet companies have relentlessly pushed neutrality campaigns against the telecom sector, when, really, the distinction between content and infrastructure has always been a fluid one.
More importantly, and relevant, both the infrastructure and content/app elements can wield great market power.
Firms offering these services should be disciplined by competition rather than regulation. But after agitating, for years, on net neutrality, it’s harder for the big players to credibly make such arguments themselves, especially as they outgrow the telcos (“Why Aren’t Google Amazon & Facebook’s Winner-Take-All Networks Neutral?” asks Scott Cleland of Precursor).
Sad to say, if the Federal Communications Commission and its head Ajit Pai do not succeed in rolling back the harsh Obama-era compulsory net neutrality, even proponents stand to get the “neutrality” they deserve, good and hard, thanks to score-settling, the new rise in antitrust activism, and a sentiment for tech regulation. A shame.
Even AT&T has punk’d or photo-bombed (or whatever the kids say today) the Internet Day of Action by saying, it, too, supports net neutrality, just not turning the Internet into an all-out regulated public utility as the Obama-era FCC rule would do.
The sentiment was echoed by Michael Powell, president of NCTA — the Internet & Television Association, who told the LA Times, “Net neutrality is not controversial. Title 2 is politically controversial…. We think this really needs to go to legislation so that net neutrality rules are permanently enshrined in statute and properly balanced against the disincentives for investment.”
Likewise Douglas Holtz-Eakin of the American Action Forum said, “So, yes, there should be a genuine day of action, but it should be to call on Congress to pass real network neutrality legislation.”
These seem to refer to Sen. John Thune’s proposed legislation, who has a column on Recode today describing his draft that “would have outlawed the online practices of blocking, throttling and paid prioritization of legal content over broadband cable and wireless connections.”
Those terms do not properly describe real markets where competitors respond and capital markets exist to discipline, and they are not terms appropriate to put into law. They’re just disparaging ways of referring to private ownership and pricing, and will easily be the source of great regulatory mischief if enacted that way.
Try to really block or throttle, and see what happens to you and your company. We don’t need law purportedly expressly banning them to be manipulated in the future, as the very Title II concept is being manipulated today. What’s not “blocking,” what’s not “throttling,” if you’re a clever litigator?
So, where are we? Progressives would reclassify to turn the Net into a public utility, while the net’s congressional defenders would impose a law that codifies sinister names and outlaws phantom behaviors that will have real unintended consequences down the line.
Possible resolution? If some policy is to bind the infrastructure companies, so too will be the content/app sector be bound. Without that, we’re not communicating.
We’re now in a weird battle over the meaning of net neutrality, whether it is a “title II” or Thune’s new so-called “21st Century framework.” We don’t need government-defined frameworks, we need free markets, where content and infrastructure discipline one another in the marketplace rather than in Washington, and where consumers, media, advertisers, Wall Street, competitors and upstarts all play their role too.
There was no need for “frameworks” imposed during the 56 kilobit per second modem era, and no need now.
The actual sustainable-over-decades, pro-consumer position that needs articulating is one legitimizing private property rights in networks as well as other even more complicated assets (including content/apps); and the ability of future companies, not just existing ones, to do as they please with what belongs to them as long as they’re not hurting others. That includes “blocking” and “throttling,” because if someone makes unjustified moves, consumers get the benefit of the competitive response.
Are there legislators capable of articulating this, and defending it?
If damaging policy of one kind or another is to be set today, one can make the case that we may be better off with raw, involuntary Title II, than Republicans actually legislatively affirming even worse incoherent principles, which, when you get down to it, rest upon the the same supposed misguided “openness” roots of net neutrality that instead undermine network wealth.
If Title II is imposed, Amazon, Google and Facebook will get their turns, and hard, with future regulators, and may finally be willing to come to the table to stop regulatory madness broadly. But not if poor legislation is enacted.
Free enterprise in the tech sector can survive an ill-advised, but reversible, Title II imposition. It cannot well survive Republicans conceding the very essence of property rights in large-scale assets in permanent legislation.
As it stands, Republicans are not and will never be responsible for Title II (which, again, will eventually will ensnare it’s advocates, changing dynamics for future reform). But they will be responsible for the denial of property rights in future complex or “long and thin” assets if they endorse the kinds of things I’m hearing and enshrine them into law.
This issue has repercussions beyond the Internet. The Internet is not the only network or complicated asset out there. It happens to be one special, but transitory, case in a base year of 2017, with hundreds and hopefully thousands of years ahead of our nation.
We have other even more difficult property rights issues to resolve like space commercialization, airshed and watershed management, drone airspace, navigation of autonomous vehicles, and the inevitable unforeseen innovations.
If we preclude market, voluntary resolutions in something relatively simple like Internet network practices, we also stand to fail hard in tomorrow’s more complex concerns, likely sacrificing trillions in wealth and jobs.
Republicans, in their response to net neutrality, need to prepare a foundation for economic liberalization. The best bill to introduce would be one limiting FCC power, and reaching out to those proponents gradually realizing net neutrality’s misguided principles will ultimately ensnare them, too.
Originally posted to Forbes.