Net Neutrality Debate Ramps Up Over Title II, Impact on Innovation

As the debate ramped up before Monday’s end of the open Internet reply period, opponents highlighted harms they said Title II would bring. TechFreedom President Berin Szoka also said in a media call, and NCTA on its blog, that what would slow the Internet is Title II regulation. Comcast in reply comments said Title II would deter deployment, while others like Tumblr urged Title II regulations in their replies. The FCC also unveiled the lists of panelists for each of the series of net neutrality workshops it is holding and the focus of the discussions. Those involved on all sides of the debate said the lineup appeared intended to bring out all sides of the debate, but some said cable companies and smaller edge providers are not represented. Meanwhile, at a panel organized by the American Enterprise Institute and the University of Nebraska College of Law at the FCC, Consumer Federation of America Research Director Mark Cooper said both the right and left are wrong on the issue. (See separate report below in this issue.)

"If there’s anything that would actually slow down the Internet, it would be Title II,” Szoka said. Even if they're treated as common carriers, ISPs could still charge different prices for different levels of speed, he said. To make up the cost of additional regulatory costs, the providers might turn to content providers as a new revenue source, said Szoka. Once transmission within broadband is reclassified as Title II, Web providers particularly involving VoIP and video could find themselves considered to be common carriers, he said. Communications Act Section 706 would allow the FCC to regulate against potential abuses, including giving exclusive deals to affiliates, he said. TechFreedom advocates a multistakeholder code to deal with net neutrality practices that could be implemented by Congress, or for Congress to craft narrow legislation around core net neutrality concerns that also removes regulatory barriers to broadband competition, Szoka said.

The cable industry has “spent billions upon billions" to expand infrastructure over the past decade, NCTA said in a blog post (http://bit.ly/1uwcFJL). “Why would cable ISPs be “spending millions to slow your Internet to a crawl” as Title II proponents’ Battle for the Net’s website says, “while simultaneously spending $38 million a day to speed it up? It doesn’t make sense,” NCTA said.

Comcast has invested “tens of billions of dollars in our network and continue[s] to invest more every year,” said a blog post (http://bit.ly/1wfHndc) by Executive Vice President David Cohen. The company has also pledged to invest “hundreds of millions of dollars annually” to improve Time Warner Cable’s networks, if Comcast’s takeover is approved, the post said. “Any effort to reverse the light touch regulation the government has employed so far would only serve to stifle the incredible investment and innovation that we have enjoyed to date.” Comcast “remains strongly supportive” of the FCC putting in place “legally enforceable rules” under Section 706 to deal with such issues as transparency, no blocking, and anti-discrimination rules, the post said.

A group of technology manufacturers and suppliers of high-tech equipment wrote U.S. Commerce Secretary Penny Pritzker, saying infrastructure equipment spending by businesses is expected to grow from $38.6 billion in 2013 to $42.9 billion in 2017. If Title II is used, resources “that would normally be spent on building and improving infrastructure would instead be spent complying with burdensome regulatory obligations, and uncertainty regarding future profitability would deter additional private investments,” the letter said. “If investment in broadband services declines, it will set off a domino effect of decreased investment and innovation.” The companies, including Alcatel-Lucent, Cisco, Ericsson and Panasonic, are all members of either the Telecommunications Industry Association, NCTA, or both, a news release said.

The dueling mobilization efforts brought dueling news releases. “The Internet is united against the FCC’s Net Neutrality-killing proposal,” said Craig Aaron, CEO of the Free Press Action Fund.

A “federal takeover of the Internet would be disastrous for free speech, commerce, and the future of the Internet as a sphere of innovation,” said Phil Kerpen, president of American Commitment. “The American people oppose Washington’s effort to put unelected, unaccountable bureaucrats in control of the internet -- which will create higher prices, less competition, and less freedom.” The group had no information about its funding on its website and a spokeswoman did not comment.

The availability of a free and open Internet made the “development and growth of the Tumblr platform possible,” the company said in its reply (http://bit.ly/1rWF7qa) posted Wednesday in docket 14-28. Allowing paid prioritization as Wheeler proposes would force the company to shift spending from engineering, sales, community development and hiring employees “toward broadband provider ‘fast lane’ payments, preferred access at interconnection points, and data cap exemptions,” Tumblr said. “Even if a ’slow’ lane remains reasonably fast, marginal differences in upload and streaming speeds moving forward would deter people from using slower services, and severely punish companies that cannot pay for prime access.” January’s U.S. Court of Appeals for the D.C. Circuit net neutrality decision said under Section 706, that “only rules that ‘leave substantial room for individualized bargaining and discrimination in terms’ will not ‘run afoul of the statutory prohibitions on common carrier treatment,'” Tumblr said. The FCC “cannot implement a bright line prohibition against discrimination without Title II reclassification, nor can it ban access fees and paid prioritization,” Tumblr said. The Internet Association said in its reply comments (http://bit.ly/1wggMK5) that “broadband gatekeepers do not have the right to create slow lanes and fast lanes on the Internet that discriminate against speech and harm users.”

The FCC workshops begin Sept. 16. A roundtable on “Tailoring Policy to Harms” asks “what are the harms to Internet openness in the absence of open Internet regulations, and what are the right policies to address those harms?,” said a public notice in Wednesday’s FCC Daily Digest (http://fcc.us/1tIA8cB). The panelists for the first session are: Althea Erickson, Etsy public policy director; Julie Kearney, CEA vice president; Randolph May, Free State Foundation president; Barbara van Schewick, Stanford University law professor; Michael Weinberg, Public Knowledge vice president; and David Young, Verizon vice president-federal regulatory affairs.