Paid Prioritization Policy Is Center of Debate at Federalist Society Panel

From federal antitrust law to state consumer protection and data and privacy laws, consumers have ample protections even with the Title II rollback, FCC Commissioner Brendan Carr said. He said beyond the restored FTC authority to protect consumers regarding ISPs, the Sherman Act Section 1 bars anticompetitive agreements such as those by ISPs, while Section 2 prohibits vertically integrated ISPs from discriminating against unaffiliated content providers. Much of the public hullaballoo about net neutrality "was a symptom of our larger political environment," where issues are constantly inflated into existential crises, Carr said.

Asked about potential regulation of edge providers, Carr said the 2015 net neutrality rules essentially split the internet ecosystem by making edge providers the purview of the FTC and ISPs the FCC's. The net result was different rules regimes for the two, and the Title II rollback, by restoring FTC authority, lets that agency take a comprehensive look, he said. He said it's now up to the FTC or Congress to ensure there's not "an unlevel playing field."

Denying Chinese telco ZTE export privileges (see 1804160028) is evidence that, for the Trump administration, "national security and communications security are joined at the hip," NTIA Administrator David Redl said. On the FCC's 5-0 adoption Tuesday of its national security NPRM (see 1804170038), CTIA Executive Vice President Brad Gillen said there's a need to understand global supply chains in the context of equipment now in this country “that may or may not be viewed as problematic.” He said there's a need to find balance of national interest and global market issues. Michelle Connolly, Duke University professor of the practice of economics, said governments can protect consumers without foregoing all foreign players in supply chains, and too liberal blocking will diminish productivity growth and hurt U.S. consumers.

There has been consensus among the past four FCC chairmen around the basic tenets of no blocking or throttling, but now internet policy is being balkanized by states reacting to the Title II rollback and setting their own policies, Incompas CEO Chip Pickering said. Congress needs to set a national policy of no blocking or throttling and no paid prioritization, he said.

Just like pushing down on one corner of a waterbed causes the rest of the bed to rise up, pushing down the price ISPs can charge for prioritization of some services leads to a "waterbed effect" of higher averages consumers are charged for other services, making it more difficult for lower income families to afford residential service, replied Connolly. A former FCC chief economist, she said a ban on paid prioritization also would eat into providers' profits, making ISPs less interested in marginal opportunities to deploy to lower income and more rural areas.

Open internet principles ape free market principles like free trade and equal reciprocal access to markets, with paid prioritization a distortion of the market, Pickering said. Referring to industries not particularly beloved like cable TV, airlines and the Postal Service, he said all of those have paid prioritization. However, replied Connolly, even under the open internet order, paid prioritization was legal if the payment was to a content delivery network, not an ISP. She said it's not about blocking packets of data but just ensuring that in cases of network congestion certain prioritized packets being transmitted get through first. Pickering said there's a big difference between the heavily competitive CDN marketplace and the far less competitive ISP market.

Market forces will keep in check many potentially anti-consumer practices, Gillen said. Citing heated wireless competition, he said any blocking there would see "the other guys ... kill that guy and run with their pocketbook." Gillen said infrastructure is a separate issue from net neutrality and privacy issues. On the latter, states are pre-empted from their own rule regimes over what inherently is interstate service, he said. On infrastructure, federal policies have long supported national wireless deployment that let the federal government set parameters and guidelines, and thus any state and local rules have to be looked at the under the umbrella of that policy, he said.

NTIA, alongside a variety of other agencies in a working group it co-chairs with the Agriculture Department, has several efforts underway to improve rural broadband deployment, Redl said. He said those include efforts to streamline permitting requirements for putting broadband facilities on federal land and to better coordinate the various federal broadband funding programs. Redl said the working group is working on better leveraging federal assets -- like access to towers -- for broadband deployment.

Redl also talked up the possible repurposing of the 3450-3550 MHz band for commercial use. Sitting adjacent to the citizens broadband radio service band, it's "a real opportunity" for midband spectrum accessibility, Redl said. Midband spectrum is one area where the U.S. is lagging other nations in the race to lead in 5G deployment, Gillen said. He also said FCC efforts at 5G infrastructure deployment changes have helped, but the next big step is addressing local zoning issues.

“I don’t need to pile on” the shortcomings of the current broadband availability map data set and need for more granular and more accurate data, Redl said. He said NTIA is trying to figure out how best to use $7.5 million it was given in 2018 appropriations for improving that map. The FCC currently has best federal data, but that data still lacks the clarity, accuracy and granularity “everyone acknowledges we would like to have,” Redl said. Better mapping could mean less federal government overbuilding or building in areas where the market likely will step in on its own, Redl said.