After Comcast, What’s Next for Net Neutrality?

By / 6.2.2010

Congress is gearing up to reopen the Communications Act of 1934 in order to come up with what it hopes will be a better way to make sure as much information flows through the Internet as possible and in a manner fair to consumers, service providers and other stakeholders. During a panel discussion co-sponsored by the Free State Foundation and the Information Technology and Innovation Foundation, it was clear that the coming debate on the future of America’s Internet policy in general and its net neutrality policy in particular will continue to be a lively one.

Congress has effectively advised the Federal Communications Commission (FCC) not to reclassify Internet edge networks –- cable, DSL, FTTx and wireless –- under Title II of the Communications Act. A majority of House members signed letters last week to that effect, and while these letters don’t have the force of law, they’re certainly significant statements of congressional sentiment. The FCC is, after all, a creature of Congress that isn’t entitled to operate outside the scope of its statutory authority, regardless of how noble its motives may be or how urgent the problems it seeks to address are.

The paramount questions for the immediate future concern the shape of Internet policy, and most of the answers must come from Congress. Jim Cicconi of AT&T and moderator Rob Atkinson of ITIF pointed out that the net neutrality debate has sucked the oxygen out of the room on Internet policy for the past five years. Instead of developing plans for national purposes of the Internet and ensuring that it reaches all Americans at reasonable speeds and prices, the policy community has struggled with questions about packet discrimination and “reasonable network management.” While we’ve been obsessing over how to differentiate good network operator behavior from bad, other nations have leapt ahead of us in broadband speed, adoption, or both. Even after the unveiling of a National Broadband Plan, the public debate continues to focus too much on hypothetical anti-consumer behavior by network operators and service providers.

Five years ago, panelist Randy May of the Free State Foundation developed a model law for the Internet called the “Digital Age Communications Act” (DACA) that sought to update the 1934 Communications Act that governs the FCC. Under the DACA framework, regulators can only take action on incidents in which a broadband provider was enforcing policies harmful to consumers in non-competitive markets. The virtue of DACA is its simplicity – it forswears technical prejudgment of particular management practices – but it has attracted criticism from those who find it too strict as well as from those who find it too permissive; it’s not clear why a market power test is relevant once a given practice has been found to harm consumers, for example. Questions of this sort must ultimately be addressed by Congress, as they pertain to the policy space and aren’t simply matters of regulation.

Professor James Speta of Northwestern warned that the “Title II with forbearance” approach to Internet regulation proposed by FCC chairman Julius Genachowski is inherently unstable. (Under this idea, Title II would apply to the Internet, except for the parts of Title II that don’t.) Obviously, the reclassification itself raises troubling legal issues, and is certain to cause litigation. As the outcome of the litigation is uncertain, it would likely take years to resolve its status. The forbearance process is a second source of instability, because regulations can be imposed and withdrawn so easily as matters of forbearance. While the FCC’s proposed “Third Way” built on reclassification and forbearance appears to offer a short cut to an Internet regulation framework, its expeditious character is probably more an illusion than a reality.

A number of panelists addressed the question of what to do while we’re waiting for Congress to draft an Internet policy. Eric Klinker, CEO of BitTorrent, Inc., pointed out that industry deals with questions of Internet management through self-regulatory and other cooperative efforts. BitTorrent, Inc. was not a party to the complaint against Comcast dealt with by the previous FCC – its competitor Vuze, Inc. filed the petition. BitTorrent took a very different approach, meeting with the Comcast network operations team to determine the nature of the problem that motivated them to actively manage parts of the network as they did and to map out a better solution. Rather than seeking regulatory relief, BitTorrent developed a better protocol, uTP, which yields to interactive applications but saturates network links when no other applications are active. BitTorrent improved the Internet in a way that no regulatory action can.

The self-regulatory systems that have emerged from the broadband and Internet markets organically have been largely effective, but they may need to be supplemented with more active government involvement in the future. Whether this happens, and if so, how it happens, are likely to be the subject of debate in the near future — but that debate should take place in the Congress, not at the FCC.