January 5, 2018
By Gerard Scimeca, Chairman, CASE
Judging by what feels like the 25th Star Wars sequel (or is it prequel?) that debuted in theatres this holiday season, it appears that battles in the galaxy are never quite settled. For those keeping track of the dispute in Washington over net neutrality, the feeling should be familiar.
This is quite an achievement, given the level of fear-mongering, vitriol and outright falsehoods they’ve employed to date. The left has accused FCC Chairman Ajit Pai of attempting to “kill” the internet, claiming that ISPs will block or throttle content (even though they vowed not to) and forwarded propaganda such as this phony graphic, which warns that currently free services such as Twitter, Facebook and Google will now come with a fee or be chopped-up into separate for-pay packages.
The irony is that if Title II proponents truly cared about a free and open web, consumer protections and innovation, they’d do an about-face. Title II not only created massive loopholes that would allow the sort of content discrimination they claim to be against, but it neutered the strongest and most experienced agency charged with enforcing consumer protections, the Federal Trade Commission (FTC).
Pai took a giant step in reinstating the FTC to police anti-competitive practices this month through a joint Memo or Understanding (MOU) with the agency. Under this MOU, the FCC and FTC will coordinate consumer protections, monitor unfair and deceptive practices, and target bad actors under the RIF. As FCC Commissioner Brendan Carr has pointed out, the FTC had filed over 500 privacy enforcement actions on behalf of consumers prior to the 2015 rule change when it was stripped of its jurisdiction.
On another front comes over a dozen Democrat state attorneys general, led by NY’s Eric Schneiderman, suing the FCC to reinstate Title II rules. While attempting to appeal to wealthy donors and their left-leaning base, these lawsuits are entirely unnecessary. As Carr further notes, under Pai’s RIF, every state has the right and authority to enforce discriminatory practices against service providers, creating yet another level of consumer protections.
A further irony arises from the claim that Title II protected the “little guy” in the tech industry, yet standing squarely in Title II’s corner are nearly all of the tech oligarchs, including Google, Facebook, Twitter, Amazon, who have annual revenues surpassing small countries. That seems odd, especially given that these companies thrived and became billion-dollar empires under the old rules that Pai is now reinstating.One can only conclude these giants gain a market advantage under Title II, which means the little guy won’t.
Small tech companies are, in fact, quite threatened by Title II and the 1,000 regulatory requirements it imposes. Title II forced them to spend money on compliance that could otherwise be invested in innovations to help them succeed, innovations which are the internet’s lifeblood. Take, for example, Lariat, Inc., a small tech firm based in Wyoming who claims to have created the first wireless ISP. Said their CEO, “Our small, rural ISP will be happy when the pall of the Draconian regulations is lifted; we may, at last, be able to obtain bank loans and find investors once again!”
Innovators from the early days of the web’s development have weighed-in, decrying the negative impact overbearing government regulation has on innovation, as have app developers. What they recommend is exactly what Pai achieved, a “light-touch” regulatory framework which provides stability and certainty in the tech industry that also encourages investment and innovation.
Despite claims two years ago that Title II wouldn’t hurt technology investment, its proponents have been proven flat wrong. Non-recessionary investment in broadband fell for the first time when Title II was enacted, a further blow to market competition and consumer choice. Despite clear proof of tech-sector harm from Title II, Democrats are soldiering on, now proposing legislation to overturn the FCC. This is a strident show of hypocrisy, as they attacked any and all legislative proposals when the FCC was under their party control.
With the record so clear that a Title II government-run internet hurts investment, innovators, and consumers, and with strong consumer protections now in place under Chairman Pai’s RIF, it’s time for a clear and final legislative solution from Congress that codifies for good the FCC’s mandate. In 1996 Congress championed an internet framework to “promote competition and reduce regulation,” exactly what the FCC has now achieved. It’s now time for Congress to step in again to codify the FCC’s RIF plan into permanent legislation, and end this battle for good.
