FTC Urges Caution on Broadband Access Regulations
The U.S. does not need net neutrality regulation, a Federal Trade Commission report released Wednesday said. Lawmakers should proceed with “caution, caution, caution” before crafting any broadband access laws, FTC Chairman Deborah Majoras told the Federal Communications Bar Association in Washington. “We do not know what the net effects of potential conduct by broadband providers will be on all consumers,” including access prices, quality and other services and choices of content and applications, the report said. In November the FTC will host a series of town hall meetings around the country “to explore technology and concerns about new risks” including net neutrality, online advertising and the Google-DoubleClick merger, she said.
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Despite concerns from pro-net neutrality groups and consumer advocates, the FTC is “unaware of any significant market failure or consumer harm” caused by broadband providers, Majoras said. “This market is young and dynamic and there are many open questions” including the level of demand for and feasibility of data prioritization, she said.
“We know that regulation can have - and I would say always has -- some adverse and unintended consequences,” she said. The FTC, FCC and Justice Department “have the capacity and authority to address broadband access issues and a heightened awareness of potential consumer harms.”
The FTC’s principles of clear and conspicuous disclosure and consumer protection “are as relevant to technology as they have been in the past,” Majoras said: “Technology evolves but the general FTC standards for disclosure remain constant.” The Commission already has many tools to protect consumers from unfair maneuvers by broadband providers, including anti-trust inquiries, so the FTC aims to “avoid passage of laws that have unintended effects,” she said.
Self-regulation by broadband providers is an attractive alternative to new laws, Majoras said. And consumers are often their own best advocates, she said. “Do not forget the power of the consumer in the market and in this market in particular,” she said. “Consumers believe this is their Internet and they will not stand for anything less than access to what they want. Their message is loud and clear that they want the unfettered Internet access to which they've become accustomed,” she said.
Net neutrality proponents and opponents were quick to respond to the report. Public Knowledge President Gigi Sohn said her group agreed that competition is needed in the broadband industry, but “the report falls far short in its analysis of a competitive market and the related issue of Net Neutrality.” Despite the “fervent wishes of the FTC staff,” there is not a competitive market for high-speed Internet services, she said. The report’s “cautionary message falls far short in its analysis of the harm that could come to consumers, as well as to those who offer services over the Internet, if the telephone and cable companies seize the opportunity to decide which favored partners have priority services and which do not,” she said.
Verizon, CTIA, USTelecom and Hands Off the Internet said they supported the FTC’s conclusions. Verizon Public Affairs Vice President Tom Tauke said the FTC report “confirms that there is no problem to fix” and “proposals to impose new regulation actually threaten further advancements in broadband Internet connections,” hurting consumers. Former FTC Chairman Timothy Muris agreed that “robust competition and dynamic business models pervade the Internet. The lack of appreciable evidence that consumer problems exist or that the market is not operating effectively counsel against regulators disrupting the competitive Internet market that has lowered broadband prices, generated new business models, and spurred the development of infinite new content and applications.” Hands Off the Internet Co-Chairs Mike McCurry and Christopher Wolf agreed with the report that “with consumer protection laws already in place, this is no time for government to raise prices with heavy net neutrality regulation.”
USTelecom also said it supported the FTC’s view. “The FTC found what consumers already know - that they have a variety of competitive choices from cable, DSL, wireless, satellite and other alternative providers for high-speed Internet services, and there is no problem that requires regulation of the Internet,” said President Walter McCormick. CTIA President Steve Largent called the report “yet another collection of facts that clearly depicts the Internet regulation plot as a solution in search of a problem.” - Alexis Fabbri