Matthew Kandrach, CASE President – December 13, 2017
When all you have is a hammer, everything looks like a nail
And when you’re a federal agency with the power to regulate certain industries, every problem starts to look like it can be solved by one of your rules.
That bureaucratic tunnel vision explains a lot of what’s wrong with the current FCC “net neutrality” regulations, which were issued in 2015 with the laudable goal of keeping the internet free and open and ensuring that all traffic moves freely and without censorship or discrimination, but in practice have driven away billions in needed broadband investment. The FCC is right to revisit these flawed rules.
The first problem is: The FCC regulations aren’t needed. This is a problem market forces are well equipped to solve. The current furor demonstrates that consumers demand access to the entire internet in a free and open way. And they simply won’t accept internet access service — at home or mobile — that arbitrarily limits what they can do online. Providers have unambiguously responded by making binding pledges to practice net neutrality and transparency regardless of government requirements.
The second problem is: We have better ways to protect internet openness than overreaching, investment-killing FCC utility rules. For decades, the Federal Trade Commission has protected consumers online and policed fair competition in the marketplace, and the FCC plan will restore its power to do so (power that was taken away by the 2015 rules). Also, Congress always has the power to step in and enact additional targeted protections that would enhance neutrality without the harms caused by the FCC approach.
Finally, the third problem is: By failing to regulate the biggest neutrality violators in the market — the big “edge” search and social media companies — the rules distort and degrade the market.
Like our carpenter seeing every problem the lens of her hammer, the FCC has regulated broadband providers — over which it has jurisdiction — but not the social media, search and app companies that pose a far greater threat to neutrality and openness online (because it has no jurisdiction). Rules that only cover part of the internet grievously distort the market and give bad actors an even freer hand.
That is a fundamental flaw in the FCC neutrality rules. They do nothing about the Silicon Valley monopolies that control search, digital advertising, social media, and e-commerce, even though these companies are responsible for most of the discrimination, censorship, and lack of transparency online.
Want to know how your data is collected, mined, and processed by the algorithms that determine what posts you see, what news you are served, and how you are targeted and monetized in cyberspace? Too bad. It’s all hidden in the black hole of corporate trade secrets and “proprietary information” held by companies that proclaim themselves apostles of transparency.
Opposed to censorship? Google’s “autocomplete” function comes with a notorious “blacklist” that limits its suggestions – at one point it included wordslike “lesbian” and “bisexual”. Twitter recently refused to run an ad by Rep. Marsha Blackburn. And in a more commercial vein, Amazon recently set off alarm bells for its patent to block users at its physical locations from using store wi-fi to check competitors’ prices.
Meanwhile, musicians have long complained that Google’s YouTube service forces them to accept unfair “take it or leave it” royalty terms and hides behind anticompetitive “safe harbor” immunities to pocket up to $1 billion a year in artist and record label compensation. Music creators are denied the ability to compete in a free and open online market by YouTube’s manipulation of broken “notice and takedown” rules that make it impossible for artists to withhold their work from YouTube if they aren’t fairly paid.
And at the core of net neutrality debate, both Google’s AMP service and Facebook’s newsfeed give preference in search results and prominence to websites that grant them certain rights or comply with specific technical protocols – dividing the web into the very “fast and slow lanes” that today’s net neutrality warn will come at the hands of ISPs if something isn’t done.
Given the enormous reach and influence of these two services and their power to make take it or leave it demands, this throttling of load speed gives them functional control over the most basic aspects of consumers’ experience online.
Yet in a hypocrisy supernova that would leave almost any other company ashamed, the lords of Silicon Valley with their own mile-long rap sheet of discrimination censorship, and prioritization online are the loudest voices unleashing armies of lobbyists and phony “grassroots” campaigns to impose stifling rules on their competitors.
The Silicon Valley monopolies must not be allowed to leverage their might into distorted new rules that apply only to their competitors.
After all, even a carpenter knows a hammer isn’t helpful if it cannot reach the biggest most important nail of all.
Matthew Kandrach is President of CASE – Consumer Action for a Strong Economy, a free-market oriented consumer advocacy organization.
