FCC's Net neutrality ruling: Misplaced nostalgia
The real problem with Net neutrality advocacy is that it tries to preserve the Internet as it looked in the mid-1990s, author Larry Downes argues.
Editors' note: This is a guest column. See Larry Downes' bio below.
After more than a year of palace dramas worthy of a Shakespeare play, the FCC voted this morning to impose new rules on Internet access providers aimed at "preserving the open Internet."
Today's action is both anticlimactic and incomplete. Despite soap opera hand-wringing the last three weeks from fellow Democratic commissioners, there was little doubt that Chairman Julius Genachowski had the votes he needed to pass this most recent version of the so-called "Net neutrality" rules, which he introduced on December 5. The two Republican commissioners strongly dissented from today's vote.
But the commission, in part to incorporate the separate opinions of the commissioners, did not actually publish its order, which has been circulating inside the agency. Rumors are that the final document is close to 100 pages.
Different treatment for wired and wireless Internet
Still, the agency hinted today at the most important contents. The commission will impose three new rules on Internet access providers, a category that will be defined in the final order.
The rules prohibit access providers from blocking lawful content, applications, services, or nonharmful devices. (Blocking illegal fire sharing, which, in part, kicked off the latest version of this long-running drama, is not prohibited.) New transparency rules will require access providers to disclose the details of their network management techniques, something no consumer will likely be able to understand.
And, for Internet access provided by the cable or telephone infrastructure, traffic management that "unfairly discriminates" against particular content will be prohibited.
Wireless broadband, owing to the current limits of the wireless infrastructure, is exempt from that rule. It is also subject to a more limited blocking rule, one that would allow providers to continue operating "app stores" that require prequalification.
In short, the rules adopted today are similar to those proposed by the agency in October 2009, with a few major and some minor differences. The original proposal did not carve out special treatment for wireless, for example. The wording of the discrimination rule has also changed to more closely reflect existing terminology in the FCC's 70-year history of telephone and telegraph regulations and adjudication.
The FCC's dubious legal authority
What hasn't changed is the fact that the agency probably doesn't have the authority to pass these rules, a problem likely to be tested in future court decisions. In April of this year, the D.C. Circuit Court of Appeals, which has special jurisdiction over FCC activity, rejected the agency's effort to impose sanctions on Comcast for violating its earlier, less formal open-Internet policy statements. The court found that Congress had simply not given the FCC authority over the traffic management practices of Internet access providers.
Today's order relies on the same provisions of the law, known as Title I, that the court in the Comcast case rejected. In the interim, the agency threatened a dubious legal maneuver to bring Internet access under its telephone jurisdiction, known as Title II. That effort was denounced by legal scholars, unions, and a bipartisan majority of Congress. It, too, would likely have failed in court. (The FCC refused today to close its Title II inquiry. It will likely remain in limbo for some time.)
Caught between a rock and a hard place, and with a skeptical Republican majority set to take over the House in January, today's decision is a Hail Mary pass. It was the chairman's last hope of passing something and moving on to other important, and languishing, matters, including spectrum reform and the forgotten National Broadband Plan. If carriers decide to challenge the order, the FCC will have to relitigate the Comcast decision without the benefit of any new authority from Congress.
A dangerous nostalgia for an Internet long gone
All this (and so much more) to solve a problem that hasn't yet materialized. With the exception of a few isolated and quickly dealt with incidents (most of which aren't even covered by today's new rules), Internet access providers have never blocked applications, exacted "toll road" tributes from new content providers, or otherwise shut down the open Internet we all love.
Maybe today's rules will help to ensure that the worst-case scenarios painted in lurid colors by the most militant Net neutrality advocates never come to pass.
Or maybe the new rules will have the opposite effect, squashing the enthusiasm for critical private investment in new and improved infrastructure, including fiber optics and 4G networks.
But when all is said and done, the real problem with Net neutrality advocacy is that it tries to preserve the Internet as it looked in the mid-1990s--the wild open frontier that captivated so many of us, that inspired the first generation of e-commerce and informational Web sites, and that launched the great Internet bubble and the stock market's "irrational exuberance" that burst in April 2000, the day a federal judge first ruled that Microsoft's browser dominance violated federal antitrust law.
Despite the stock market crash and doldrums that followed, the Internet has continued to evolve, expand, and develop new and exciting uses since then. Access speeds accelerate, new software and new applications continue to enter the bloodstream of the Web, and millions of new users have joined in. The Internet is now a worldwide phenomenon, and a continued source of awe and wonder.
Even without the FCC's help--or perhaps because of its absence--the ashes of the dot-com flame-out have been cleared by social networking, the mobile Internet, and other so-called Web 2.0 applications, including Facebook, Twitter, the iPhone, Android, and the rest.
But to hear the Net neutrality advocates talk, it's still 1999, and the question is whether Yahoo or Alta Vista is the better search engine (Google hadn't yet been invented), or if a 9600 baud modem is fast enough. That was an Internet that didn't include, among others, content delivery networks, voice over Internet Protocol telephony, video services, caching, or co-located servers.
That's the real risk of regulating anything having to do with the Internet, or any disruptive technology. Regulation is necessarily static, inflexible, and vague. Rulemaking and adjudication are divorced from technical realities, and they are necessarily political.
The history of regulated industries is littered with unfortunate examples of well-intentioned consumer safeguards that froze the status quo of existing players and the antiquated relationships baked into their supply chains. As new technologies create new competitors outside the traditional industry structure, regulators and those they oversee have proven unable to respond to change, destroying value and introducing unnecessary chaos in the transition from one technology base to the next generation.
In the United States, the railroad, airline, and banking industries have all suffered these unintended consequences.
The misplaced nostalgia for an Internet that has long since evolved to something much different and much more useful has led to the adoption today of rules that may have a similar effect. The FCC's embrace of open-Internet rules may indeed preserve the Internet--but preserve it in the same way amber preserves the bodies of prehistoric insects.
That gloomy outcome isn't certain, of course. Internet technology has a wonderful habit of routing around inefficiency and unnecessary obstacles. As between Moore's Law and FCC law, I'm betting on the technology to prove the ultimate regulator--and the sensible one, at that.