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Enterprise


Net neutrality is dead, and the Internet is in peril.

Or, maybe: Net neutrality is dead, and the Internet will be fine.

Or, perhaps: Net neutrality is threatened, but can be saved.

Or maybe none, or all, of the above?

You can be forgiven if you looked at the coverage of yesterday’s net neutrality court decision, and can’t figure out what to think — beyond the fact that it seemed like a big deal. (Cough. Me too!)

So here to help is Susan Crawford, a law professor with an intense interest in the subject and the ability to help the rest of us make sense of it.

Crawford, currently a visiting professor at Harvard Law School, doesn’t attempt to describe herself as an unbiased observer. She’s a longstanding critic of the companies that dominate broadband service in the U.S., and if you want the in-depth version, she has a book that spells out why.

If you have a few minutes, here’s an edited version of a conversation we had yesterday. I’m happy to have the same conversation with a telco defender if they can put their view in terms the rest of us can grok, too.

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credit: dxoneil

Peter Kafka: Let’s start at the beginning. What does “net neutrality” mean?

Susan Crawford: The basic idea is that the companies that are selling Internet access to Americans are not supposed to choose winner or losers — to decide which applications or services will be more successful in reaching subscribers.

Is that a concept? Or a law?

For 100 years, that was the idea applied to telephone companies — that they weren’t supposed to favor particular conversations or discriminate in the selling of services. So it’s a very old-fashioned idea, which continues to have great salience in the Internet era.

But who’s in charge of enforcing it? When I talk to analysts who cover cable and telco stocks, they always make a point of telling me net neutrality is an idea, not a law.

They’re right and I’m right. There was a decision 10 years ago, by the FCC, to deregulate high-speed Internet access and service — not to treat it like the telephone companies had been treated for the last 100 years. The assumption the FCC made was that there would be so much competition that it would protect Americans, and we wouldn’t need regulation.

Then a few years later, there was a lot of concern about the ability — particularly in the really concentrated market we’ve got for high-speed Internet access — of providers to act as gatekeepers. After all, it’s in their interest to make more money from the same piece of infrastructure. And to not only charge users and subscribers, but also charge content providers, for the privilege of reaching those subscribers.

So with all that uproar — in particular a kerfuffle in 2007, when Comcast was found to be systematically blocking BitTorrent across their network — and then as part of the [first] Obama campaign, the president promised that net neutrality would be one of the elements of his administration. So in 2010, the FCC adopted what it called the Open Internet rules, aimed at limiting the power of Internet service providers to block or discriminate.

Which is what Verizon challenged in court.

Right. It’s those rules that Verizon is saying the FCC had no legal authority to enact. The reason that Verizon was successful was because of the basic incongruity I described to you at the beginning — that 10 years ago, the FCC deregulated these actors. And it can’t now simultaneously pretend to regulate them.

So what happens next?

Realistically, what will happen is that in order to have authority over high-speed Internet access, the FCC is going have to have clear statutory grant of power. It has that [now]. All it has to do is relabel these services as common carriage services. It’s likely that’s what they’ll end up doing.

You make that sound like it’s basically just a matter of doing some paperwork. It sounds like shuffling some papers, and stamping a stamp, and you’re done.

That is actually what it would take. Administrative agencies get to change their mind.

We thought in 2002 that the market would work in a particular way. That has not proven to be the case. Instead, we’ve seen a consolidation and dividing up of the markets by Internet service providers. We also see that Americans perceive high-speed internet access as a utility — it’s just like water or electricity. Something you need when you move to a new place. So there’s no question that it’s functioning like the telephone service used to in the old days.

It may be that not every detail of that regulatory structure should be applied. But there were good reasons for it, in the telephone context — after all, we’re handing all of our speech over to these private actors. And there’s no good reason for it [not to exist] in the Internet context as well.

So Congress doesn’t need to step in?

Absolutely. There’s no need for congressional involvement.

Now, there’s truthfully going to be congressional threats. Republicans, in particular on the House side, have already said that if the FCC moves a muscle toward net neutrality, they’ll gut the commission’s budget. So there will be a political battle over this.

This is just like the banks. This is a collapse of regulatory authority. And we’re going to need to refit it.

So the carriers are on one side of this battle. Who’s taking them on?

The problem is, our major Internet companies have interests that are aligned with the carriers. They’re like ESPN. You can think of Facebook and Google and the other guys as really like major cable channels. It’s not in their interest to be particularly loud about this.

Who’s on the other side is going to be [some of] Silicon Valley, investors, venture capitalists, some civil society actors. And the principle of the idea is that the speech of 300 million Americans is more important than the profit-making activities of four or five companies.

Why don’t the Googles and Facebooks of the world want to fight the telcos?

Again — it’s like ESPN. Facebook and Google are powerful enough that the providers need them more than they need the cable guys. So they know they’ll be able to make all the deals they want. They’re not so worried about the fate of the next Google, or the next Facebook.

But I’m always hearing about the back and forth between Netflix and the cable guys about who’s going to bear the cost of all that bandwidth that Netflix users take up. Won’t Netflix want to take this on? And if they do, doesn’t Google/YouTube and everyone else?

No, that’s not the case. Google, way back in 2010, made common cause with Verizon. And then exited the net neutrality discussion. And Netflix, every once in a while, acts like it just wants to be a cable channel, so they’re deeply divided.

Earlier you made the court decision seem like something like the FCC could fix in a couple of minutes, or days. Now you’ve painted a scenario where there’s a political battle, and on the one side is a ton of power, and then on the other side are some people without much power.

But those aren’t the reasons why an independent regulatory agency makes decisions. There’s a principle here which is really important, which is the free flow of information and commerce in America. Our ability to compete on a world stage. So whatever the lineup of the political actors, it’s in the commission’s interest to make clear the source of its statutory authority.

And it can do that, relatively easily. You had the president, today, announcing that he’s all for net neutrality. So if the president’s willing to go into battle, that will help a lot.

But the FCC is staffed by political appointment. Do you think Obama really wants to spend his political capital on this?

He’s the guy who was elected online, in large part. And I would hope he understands the value of high-speed Internet access to America.




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