….”That Won’t Work”
Will the new order affect the woman’s ability to Skype with her son in Turkey? No. Will it affect her broadband bill? Yes.
Unfortunately, regulating net neutrality under Title II will almost certainly raise your broadband bill. A range of state and local fees apply only to common-carrier telecommunications services—which is what the FCC just made your broadband internet service.
Wheeler’s approach creates a host of other problems. Most important, it allows the FCC to regulate not just your (hated) broadband provider, but also your favorite internet services.
You were sold a bill of goods when activists told you net neutrality was all about protecting “the next Facebook” from evil ISPs. Think about it: If you’re “the next Facebook,” who do you think is more worried about you? Your ISP, or Facebook itself? If the problem is between Facebook and its potential challengers, hamstringing ISPs is an awfully roundabout way of dealing with it. Especially because we already have a regulatory apparatus to deal with issues related to competition: antitrust laws.
But consider this irony: Now that ISPs are regulated under Title II as common carriers, the Federal Trade Commission can’t enforce its consumer protection laws against them anymore.
That doesn’t mean there won’t be antitrust enforcement, but we did just hobble our most significant and experienced consumer protection authority. That seems like a mistake if we’re enacting rules that purport to protect consumers.
“To Solve a Problem That Doesn’t Exist”
One would think that after a decade of debate there would be a strong economic case for net neutrality. But there isn’t. According to Commissioner O’Rielly—one of the few people who’s actually read the order—“[t]here is not a shred of evidence [in the order] that any aspect of this structure is necessary.” The record leading up to last week’s vote contained evidence of only five instances in the history of the internet where ISPs may have thwarted content providers’ access to end-users, none of which required heavy-handed net neutrality rules to address.
The world in which internet innovators have to ask permission to operate is imaginary. Or it was, until Wheeler regulated it into existence.
The new catch-all provision may well apply to internet companies that now think they’re not subject to the rules. Title II (which, recall, is the basis for the catch-all) applies to all “telecommunications services”—not just ISPs. Now, every time an internet service might be deemed to transmit a communication (think WhatsApp, Snapchat, Twitter…), it either has to take its chances or ask the FCC in advance to advise it on its likely regulatory treatment.
That’s right—this new regime, which credits itself with preserving “permissionless innovation,” just put a bullet in its head. It puts innovators on notice, and ensures that the FCC has the authority (if it holds up in court) to enforce its vague rule against whatever it finds objectionable.
And no matter how many times this Chairman tells you that for now the rules won’t apply to internet service X, he can’t guarantee that they won’t next year (or next month). And he certainly can’t make that guarantee for the FCC’s next chairman.
One of life’s unfortunate certainties, as predictable as death and taxes, is this: regulators regulate. It would be crazy to think the FCC adopted these rules and will just to let them lie fallow if tomorrow’s internet boogeyman is a non-ISP company.
Even staunch net neutrality supporters like EFF worry about the breadth of the FCC’s new “general conduct” standard. Couple that with language that invites complaints and class action lawsuits, and suddenly a regulation claimed to ensure “just and reasonable” conduct becomes a rent-seeking free-for-all.
But surely ISPs have it in for Netflix, right? Actually, Comcast is the only ISP (out of the literally thousands that are now regulated under Title II) that competes with Netflix. And the evidence shows that the problems allegedly arising from that competition were caused by Netflix, not Comcast. Did we really just enact 300 pages of legally questionable, enormously costly, transformative rules just to help Netflix in a trivial commercial spat?
“Using Legal Authority the FCC Doesn’t Have”
For last week’s “victory” to stand, the FCC must win in court on all (or nearly all) of a host of difficult legal questions.
Most obviously, the rules will be challenged as “arbitrary and capricious” under Supreme Court precedent that makes clear that agencies may not adopt rules that “run counter to the evidence before the agency,” or are simply implausible.
Last year, the Supreme Court took the EPA to task for “tailoring” provisions from the Environmental Protection Act to rewrite an outdated statute. The FCC’s effort to do the same thing with Title II will likely fall prey to the same result……