Copps, McDowell Face Off on Need for Net Neutrality Rules

“We all agree that the freedom of expression made possible by the Internet is stirring,” particularly in regards to political speech, said Commissioner Robert McDowell. But the Internet’s success is a result of bipartisan decisions in the last 15 years to “allow the Internet to grow largely unfettered by government mandates,” he said. Policymakers “chose to rely instead on a cooperative model of decision making and self government by a large number of interested parties, private and public, working together in collaborative forums, associations and other non-governmental bodies.”

McDowell has “serious concerns” about net neutrality rules “from both a constitutional and policy standpoint,” he said. “The plain language of the First Amendment, of course, is a check on government power to burden speech, and not on a private party’s choice to speak or stay silent. Efforts to advance First Amendment values through additional government regulation risks turning over two hundred years of First Amendment jurisprudence on its head.” There’s a high probability that government will get Internet regulation wrong, a risk worse than any one company acting badly, McDowell said. “When a company guesses wrong and builds a business model that fails, the failure hurts the company’s employees and investors -- but rarely does that failure impair a competitive marketplace because consumers have the power to choose among other options,” he said. “When the government guesses wrong, however, and imposes a regulatory regime based on unsubstantiated fears about the future, it can distort the development and deployment of new services by all providers for years to come.”

However, Commissioner Michael Copps said “hard and fast” net neutrality rules are in the public interest. “History teaches us that if a special interest has a technical capacity and the financial incentive to interfere, there are going to be some bad apples who are going to try.” There’s a long history of network operators sounding alarms over pro- consumer decisions, said Copps, citing industry concerns over the years about the consequences of allowing Hush-a-Phone and Carterfone, and breaking up the Bell company. “We need to proceed thoughtfully and with a healthy dose of skepticism,” he said. “There are founded and unfounded fears in this debate to be sure, and we need to have all the facts when considering the future ramifications of this powerful tool.”

The Internet has enabled “speech, journalism and democracy,” said Commissioner Mignon Clyburn. The FCC’s “role is to preserve and enhance those things that enable greater democratic participation and better-informed citizens.” Policymakers should ensure the Internet “remains an unbiased platform for all speakers, including historically under-represented voices,” allowing them to “reach all audiences on the same footing and with extremely low barriers to entry,” she said.

AT&T claimed common ground between advocates and foes of neutrality rules, in a letter Monday to Genachowski. All believe that consumers should be at the center of every discussion on Internet policy, that an open Internet enables consumers to innovate and create content from their home, and that government policy “must preserve and expand incentives” driving private investment in the Internet, AT&T said. The carrier said it agrees with an Oct. 22 letter by Sen. Olympia Snowe, R-Maine, and an Oct. 21 joint statement by Verizon and Google. Those proposals urged an approach that protects consumers and application developers from unreasonable and anticompetitive discrimination, but is “flexible enough” to permit ISPs to deal with congestion and security issues as well as enter into “voluntary commercial agreements” allowed by Section 202 of the 1934 Communications Act, AT&T said.

AT&T praised the FCC for setting up a technical advisory process that includes network engineers. AT&T urged the FCC to invite industry chief technology officers and others with “practical experience in dealing with the myriad network management challenges facing the broadband industry today and in the future.” Multiple interconnected bodies may be needed to address all of the issues involved, and an FCC advisory group “could foment such private sector linkages by initiating these discussions,” the carrier said. The advisory group could also give the commission expert advice on technical issues and be “a venue for airing concerns and seeking consensus, without the need for regulatory intervention,” it said.

AT&T previewed its letter with some other broadband provider officials, including NCTA President Kyle McSlarrow, said Senior Executive Vice President Jim Cicconi in an interview. It has also talked to some Internet application companies, though not specifically about Tuesday’s letter, he said. Cicconi believes middle ground can and should be found, since AT&T and companies like Google are all part of one Internet ecosystem, he said. AT&T will continue reaching out to other Internet companies and urges them to reach out to AT&T as well, he said.

But, no matter what it says, AT&T hasn’t identified consensus, said Free Press Policy Director Ben Scott in a statement. “What they are proposing would allow them to violate the core principle of Net Neutrality -- letting them control the Internet by picking winners and losers in a pay- for-play scheme,” Scott said: “That would destroy the free and open Internet, and the FCC should reject this false compromise out of hand.” AT&T’s answer is “a bait and switch,” Scott said. “As bait, they ask to return to a standard of nondiscrimination that was long applied to the telephone network. But they fail to mention that this standard was part of a system of pro-competitive common carriage rules that they have railed against applying to broadband networks for years. They haven’t changed their mind about common carriage. They are simply cherry-picking one piece of the old rules and calling it a compromise.”

The cable industry doesn’t “believe new net neutrality rules are necessary,” but agrees with AT&T “that a sharper focus on unreasonable and anti-competitive behavior would more likely preserve the flexibility providers need to innovate and manage their networks while protecting consumers from any potential harms,” said McSlarrow. USTelecom President Walter McCormick said “AT&T’s proposal is a thoughtful approach to balancing legitimate governmental interests in protecting consumer choice from anticompetitive harms while preserving the free and open nature of the Internet.”

Earlier Tuesday, a debate between CTIA and Public Knowledge highlighted some common ground on net neutrality, as well as differences on issues including openness and wireless competitiveness. The industry and consumer groups seem to agree there’s strong need for transparency and network management, CTIA Vice President Chris Guttman-McCabe told an audience at the National Press Club. But without the ability to respond to the changing wireless environment through reasonable network management, a consumer’s intensive network use can harm all other users in the vicinity, he said.

The FCC is right to maintain the reasonable network management exception in its proposed neutrality rules, said Public Knowledge President Gigi Sohn. But the agency has “seriously undermined them by rejecting the Comcast [reasonable network management] standard and putting in its place a standard that means nothing -- reasonable is whatever is reasonable,” she said, urging the Commission to look to the Canadian Radio-TV and Telecom Commission standard. There, as in the Comcast standard, the service provider has to show that its network practices bear a close relationship to an important network management goal like relieving congestion or protecting the network, she said.

The FCC is also right to give wireless providers a little more wiggle room to manage their networks due to technical and bandwidth constraints, Sohn said. But that doesn’t permit the blocking of applications like Google Voice, Skype and Sling Media, which compete with the carriers’ own offerings, she claimed. Guttman-McCabe responded that the proposed net neutrality rules ignore the realities of wireless network management. Because of the inherent technological differences, wireless carriers manage their networks to ensure the Internet performance and to ensure services that are time-sensitive are given the resources to function properly, he said. Additionally, the consumer experience is evolving beyond a carrier-customer relationship, he said.

Sohn said net neutrality regulation is very narrow: It governs the relationship between the Internet service providers and the subscribers in a world of limited competition, high barriers to entry, high switching costs and information asymmetry. She said there’s no consensus among wireless carriers on net neutrality rules -- Cell South openly supports it, while Leap Wireless, Sprint Nextel and T- Mobile USA have taken no position. Regulation of one area will affect all parts of the interdependent wireless ecosystem, Guttman-McCabe said. Similar to the FCC’s decision to impose “open access” obligations on the 700 MHz C Block license, the imposition of net neutrality on wireless will inject uncertainly into the market and have an impact on investment, he said, adding that some manufacturers are holding off their investments in 4G products.