Last week, the Wall Street Journal published an op-ed from our own Rick Boucher and the author of our latest report, Fred Campbell, on the perils of following Europe’s lead to regulate the Internet. An excerpt:
Net-neutrality proponents assume that the impact of common-carrier regulations will be minimal and that the U.S. will maintain its technology lead forever, but the European regulatory example suggests that such an outcome is far from certain. It is more likely that imposing regulations crafted for last century’s monopoly telephone service will have a crippling and chilling effect on broadband investment. Investment drives innovation: As the Internet Innovation Alliance study demonstrates, Europe has fallen badly behind the U.S.
You can read the full op-ed over at the Wall Street Journal (subscription required).
This morning, we published a new report — authored by Fred B. Campbell, Jr. — on the effect Title II regulation on communications investment in Europe, and what it could mean for investment here in the United States. The full report is available here, and below is a recording of a teleconference call discussing the report.
Yesterday, FCC Commissioner Ajit Pai had some strong words about the Commission and President Obama’s apparent plans to apply Title II regulations to the Internet. He started off with a bang, stating:
I believe the public has a right to know what its government is doing, particularly when it comes to something as important as Internet regulation. I have studied the 332-page plan in detail, and it is worse than I had imagined. So today, I want to correct the record and explain key aspects of what President Obama’s plan will actually do.
Pai then broke down six points he believes the public are being “misled” about by the President and the FCC. Those six points are:
1. The plan doesn’t include rate regulation, a claim Commissioner Pai calls “flat-out false.” From his statement:
The plan repeatedly states that the FCC will apply sections 201 and 202 of the Communications Act, including their rate regulation provisions, to determine whether the prices charge by broadband providers are “unjust or unreasonable… Thus, for the first time, the FCC would claim the power to declare broadband Internet rates and charges unreasonable after the fact.
2. The plan is aimed at pro-competitive broadband service offerings that benefit consumers, which Pai warns will actually create a regulatory headache. His words:
The plan expressly states that usage-based pricing, data allowances — really, any offers other than an unlimited, all-you-can-eat data plan — are now subject to regulation. Indeed, the plan finds that these practices will be subject to case-by-case review under the plan’s new “Internet conduct” standard.
Pai also warns that the plan clearly places things like data allowances on mobile “on the chopping block,” which could mean consumers using less data will end up paying for those who use more.
3. In contrast to the “light-touch” regulation that has been applied to the Internet up until now, the plan gives the unelected members of the FCC “broad and unprecedented discretion to micromanage the Internet.” How? Well, Pai held up interconnection as an example, stating:
The plan states that the FCC can determine when a broadband provider must establish physical interconnection points, where they must locate those points, how much they can charge for the provision of that infrastructure, and how they will route traffic over those connections.
4. The real winners from the plan will, in fact, be lawyers. Pai again:
The plan allows class-action lawsuits — with attorneys’ fees — should any trial lawyer want to challenge an Internet service provider’s network management practices or rates. Indeed, the plan expressly declines to forbear from sections 206 and 207 of the Act, which authorize such private rights of action.
Translated: Get ready for a flurry of lawsuits. Or, as Pai described it, “more litigation and less innovation.”
5. The plan is ripe for regulatory creep. Specifically:
The plan is quite clear about the limited duration of its forbearance determinations, stating that the FCC will revisit the forbearance determinations in the future and proceed in an incremental manner with respect to additional regulation. In other words, over time, expect regulation to ratchet up and forbearance to fade.
6. The plan “opens the door to billions of dollars in new taxes on broadband.” This point, really, should concern everyone outside of the regulatory bubble. Pai’s explanation:
The plan repeatedly states that it is only deferring a decision on new broadband taxes (such as Universal Service Fund fees and Telecommunications Relay Service fees, among others)—not prohibiting them. And it takes pains to make clear that nothing in the draft is intended to foreclose future state or federal tax increases. Indeed, the plan engage in the same two-step we saw last year with respect to the E-Rate program: Lay the groundwork to increase taxes in the first order, then raise them in the second. One independent estimate puts the price tag of these and other fees at $11 billion.
That’s $11 billion that would be passed on to consumers, by the way, all so the FCC can apply outdated, railroad-era regulation in order to achieve something we already have: an open Internet.
Pai ended his remarks by calling on the President and the FCC to release the plan to the public before the Commission enshrines it into law. “We should have an open, transparent debate,” he stated, and given the six points described above, it’s hard to argue with him. Here’s hoping the President and Pai’s fellow Commissioners are listening.
You can check out Commissioner Pai’s full remarks at the FCC website.
Our Co-Chairman Bruce Mehlman and Larry Irving have a column in USA Today warning that the FCC risks stunting progress on the Internet. An excerpt:
[T]he war reached new heights this week, as FCC Chairman Tom Wheeler proposed regulating our most advanced companies based on the rules designed for our oldest.
For a majority of innovators and entrepreneurs around the nation, partisan paralysis is unwelcome news, likely to spawn years of litigation, cloud investment certainty and potentially slow our economy’s most powerful engine. For objective policy analysts, the partisan intensity surrounding the net neutrality debate is unnecessary and counterproductive. Bad politics is making for bad policy.
Check out the full column over at USA Today.
Says Congress should resolve the Open Internet debate with targeted legislation aimed at reinstating the 2010 Open Internet Rules and not imposing public utility regulation on broadband
WASHINGTON, D.C. – February 4, 2015 – In response to press reports highlighting the Federal Communication Commission’s (FCC) policy direction on new Open Internet rules, IIA issued the following statements from Rick Boucher, a former Democratic congressman who chaired the Energy and Commerce Subcommittee on Communications and the Internet and serves as honorary chairman of the Internet Innovation Alliance (IIA), and former Assistant Secretary of Commerce under Clinton – now IIA Founding Co-Chairman – Larry Irving:
From Congressman Boucher:
“I urge Chairman Wheeler to reconsider his plan to treat broadband services under common carrier rules. Subjecting broadband to public utility regulation under Title II is unnecessary for assuring continued Internet openness and would carry deeply harmful consequences. Internet infrastructure investment would be stifled at a time when we have a national goal of extending high-speed Internet service to 98 percent of Americans.
“A better way to preserve the open Internet, protect consumers and promote innovation is to encourage the private investment necessary to support the deployment of high-speed, next-generation broadband nationwide. I’m confident in Congress’ ability to secure a win for our nation with a bi-partisan legislative solution that empowers the FCC to re-promulgate the 2010 Open Internet Rule but precludes the imposition of onerous Title II regulations. This outcome would protect the Open Internet by remedying the D.C. Circuit’s objection that the Commission lacks the statutory authority to act and maintain the existing light-touch regulatory environment that is welcoming to high-speed broadband investment.”
From Larry Irving:
“Imposing Title II regulation on broadband Internet primarily will benefit lawyers. Endless litigation will create additional uncertainty in the market and impact Internet innovation and investment as companies and investors try to figure out what provisions do or do not apply in a new Title II world.
“Democrats primarily have driven the net neutrality debate, but today Republicans in Congress stand ready to work on a bipartisan basis on legislation aimed to ‘keep the Internet open.’ If an open Internet is the goal, why is the only acceptable mechanism for achieving that goal a centuries-old regulatory framework? Preserving the open Internet through bi-partisan legislation, achieving and declaring victory on an important issue, steering clear of interminable and disruptive litigation, and reducing consumer costs by veering away from antiquated Title II regulation would seem to be the better alternative.
“For more than two decades, from the earliest days of the Internet, I along with most Democrats involved in development of our nation’s Internet policy, have advocated a light regulatory touch for the Internet. I still believe that to be preferable to utility-style regulation for the fast-moving and constantly evolving Internet. But, as important, to craft the right solution for America, we need to end the partisan politics around the Open Internet issue and work towards and embrace bi-partisan solutions.”
Earlier today, our Co-Chairman Larry Irving appeared on The Morning Briefing to break down the current debate over net neutrality. Among Irving’s points: net neutrality can be ensured without Title II, Congress will surely need to act at some point, and the FCC’s current path could easily become mired in litigation for years. Check out Irving’s full interview below.
Our Co-Chairman Jamal Simmons has penned an op-ed for Forbes warning that reclassifying broadband under Title II would mean higher taxes for consumers. An excerpt:
A recent study by Progressive Policy Institute economists Robert Litan and Hal Singer is the first significant effort to quantify how much it could potentially cost consumers if broadband services are reclassified as “telecommunications services” under Title II of the Communications Act of 1934. By regulating broadband service under Title II, the Federal Communications Commission would essentially be required to treat this service under the same rules as the old telephone monopoly from decades ago. By switching from the current light-touch regime to Title II, broadband Internet services would be subjected to a panoply of requirements, such as for entry and exit. That also means broadband would likely become burdened with a host of new state and local taxes and fees, the kind we pay on our monthly home and/or wireless phone bills. These taxes and fees are normally passed on to consumers; when they rise, consumers end up paying more. Expect the same with broadband.
You can read Simmons’ full op-ed over at Forbes.
Today, AT&T (which, full disclosure, is one of IIA’s members) announced a new initiative aimed at bolstering the use of technology in America’s classrooms. The initiative, called the AT&T Aspire Accelerator, is calling on applicants to submit ideas and programs that are “game-changing solutions to real-world education problems.” From the press release announcing the program:
Unlike most other accelerators, the primary measure of success for the Aspire Accelerator is societal impact rather than monetary return. Participants will be selected based on their ability to drive students’ educational or career success. Special consideration will be given to solutions for students who are at-risk of dropping out of school.
“Technology is changing how teachers manage their classrooms, how students digest information, and how parents and administrators communicate,” said Charlene Lake, Chief Sustainability Officer, AT&T. “The AT&T Aspire Accelerator is designed to support and scale ed-tech ideas that make brighter futures—ideas from for-profits and non-profits that want to make a difference.”
More information on the AT&T Aspire Accelerator, including the application process, is available here.
Yesterday, the Washington Post published a must-read piece from Larry Downes breaking down why everyone who supports an open Internet should support the net neutrality bill making its way through Congress. An excerpt:
The proposed law is short and sweet. It grants the FCC authority to enforce tough new limits on how ISPs manage network traffic, directly addressing the kinds of practices both the agency and the White House have argued could, if implemented by ISPs in the future, threaten the continued success of the U.S. Internet.
At the same time, it would cleanly resolve the long-running conflict between the agency and the federal courts, who have rejected two earlier net neutrality efforts from the FCC on the ground that Congress never delegated oversight of broadband ISPs to the agency.
You can — and should — head on over to the Washington Post to read Downes’ full piece, but if you’re in a hurry we’ve put together an infographic highlighting the eight reasons he gives for supporting the bill.
Our Honorary Chairman Rick Boucher has taken to the pages of Roll Call to argue that Congress should act now to ensure net neutrality. An excerpt:
The coming month, before the FCC acts presents a timely opportunity for Congress to step in and resolve the debate on terms that would seemingly be agreeable to Democrats and Republicans, broadband providers and consumers seeking continued access to robust high-speed Internet services. The FCC promulgated its open Internet rule in 2010 against a backdrop of consensus that had been reached through lengthy discussions among the stakeholders. While not all of the parties were in agreement, a critical mass of consumer groups, broadband providers and policymakers created the consensus that resulted in the FCC’s open Internet framework. It’s notable that among broadband providers, AT&T publicly expressed support for the rule, and it was ultimately approved with the FCC’s Democratic members voting affirmatively. Even more noteworthy is that in the four years since the open Internet rule was adopted, broadband providers have integrated its requirements into daily operations, and high-speed Internet access service has expanded absent consumer complaints of violations.
Check out Boucher’s full op-ed over at Roll Call.