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Unequal Playing Fields

07.19.2017

 

As the Federal Communications Commission considers comments recently filed about its “Restoring Internet Freedom” proceeding and leaders on Capitol Hill consider possible legislation, it is important for the focus to revolve around facts, economic analysis and consistency.

One of the loudest voices in this debate has been the Internet Association, a lobbying group for internet companies, which has argued the FCC and internet providers want to “limit your access to the best of the internet.”

The group has pushed FCC Chairman Ajit Pai to abandon his efforts to protect both consumers and innovators while freeing broadband providers of worries about federal bureaucrats adopting future price controls on internet access.   

“We’re in it to win it. This is high priority for us and we’re putting a lot of time into this,” Internet Association CEO Michael Beckerman, a former staffer to House Energy & Commerce Chairman leader Rep. Fred Upton (R-MI), told C-SPAN in early May.

The Internet Association favors heavy-handed regulations on broadband providers, but not surprisingly has a much more “light-touch” mentality when it comes to possible regulations over companies it represents. At a time when large internet providers such as AT&T, Verizon, CenturyLink, Windstream and Frontier Communications are increasingly competing with so-called “edge” internet companies in the digital ad and streaming video markets, it’s not surprising the group would prefer an unequal playing field.

Recently the Internet Association has attacked broadband providers, saying they’ve misled regulators, and the public about broadband investment, even as Mr. Beckerman has lamented that there is “on this issue a little bit of a rivalry back and forth between internet service providers and websites and apps that we represent. Because the relationship is really important.”

During a recent conference in Washington, Mr. Beckerman discussed how his member companies have thrived in the U.S. thanks to “light touch regulations and forward thinking of things like Section 230 of the Communications Decency Act,” which is a law that provides liability protections for providers and content platforms which publish content created by users.

Some consumer advocates have suggested changing the law, which they say gives immunity to terrorists and sex traffickers and should be amended. The Internet Association does not favor changing the law.

“I don’t think we should change too much the secret sauce that has allowed these companies to grow here and be an export to the world,” Mr. Beckerman said.

During a different interview with Bloomberg BNA, Mr. Beckerman explained how the law has allowed the U.S. internet sector to leapfrog the EU and other countries:

“I think it’s very difficult even to overestimate the importance of 230 on innovation in the internet we seen... If you look at Europe or the rest of the world, who doesn’t have maybe as robust of an economic internet sector as we have or the companies we have being born elsewhere, it’s because of this law. Anything that’s going to weaken that would be incredibly problematic for our sector and future growth and whatever happens next.”

Internet Service Providers (ISPs) have expressed a similar sentiment about the importance of the light-touch rules, which led to an explosion of new broadband investment, faster speeds and more deployment across the U.S. That environment abruptly changed in 2015 after the FCC adopted its Open Internet Order. In a report last year, USTelecom highlighted how European-style Title II regulations hampered investments in the EU while U.S. networks thrived.

See: Utility Regulation and Broadband Network Investment: The EU and US Divide

Ironically, the Internet Association said the FCC’s 2015 Open Internet Order included “light touch rules” that “establish[ed] the correct level of baseline net neutrality protections,” in a recent 15-page white paper on net neutrality. 

The Internet Association may be the only business lobbying group in Washington which believes the 2015 Open Internet Order was “light touch” in any way. Then-FCC Commissioner Ajit Pai said the order “crows that its forbearance from Title II’s provisions and rules yields a “‘light-touch’ regulatory framework,” in reality it isn’t light at all, coming as it does with the provisos, limitations, and qualifications that the public has come to expect from Washington, DC.”

Congressional leaders, such as Rep. Upton, called the FCC’s 2015 action “heavy handed implantation” of rules “which gave this government agency new, unauthorized authority of the Internet.”

The Internet Association maintains that it is important to retain the current rules, which are grounded in legal authority under Title II of the Communications Act. “The Commission should maintain its existing net neutrality rules and must not weaken their firm legal basis,” the group said in comments this week to the FCC. Yet in that same filing, the association says it “has been and continues to be agnostic as to the legal classification of [broadband internet access service].” 

In its FCC comments this week, the group argues current net neutrality regulations provide “clear rules of the road [which] have given edge-based apps and services the certainty needed to attract investment and growth without concerns about ISPs acting as gatekeepers.”

Ironically, one of the Internet Association’s largest members – Google – has some experience with being labeled a gatekeeper. Last month, the online advertising giant was fined a record $2.7 billion for, as the New York Times put it, “unfairly favoring some of its own services over those of rivals.” 

Another member, Amazon, was recently awarded a patent, “Physical Store Online Shopping Control,” which would allow it to block customers from using their smartphones in Amazon stores (such as Whole Foods stores, which Amazon is buying) to compare prices. 

It is encouraging that leaders of some Internet Association member companies, most notably Facebook and Reddit, recently acknowledged that the best path forward to resolving this long-running industry dispute may be for Congress to step in to give the FCC clear legal authority to enforce future-proof net neutrality protections for consumers, the innovation community and internet service providers. We look forward to working with both sides on a solution to this long-simmering legal dispute, and once and for all delivering to consumers the modern, permanent net neutrality protections they deserve.